A review of grants administration in NSW has recommended establishing a whole-of-government website that provides publicly available information about grants to improve accountability and transparency.

It also says the state’s auditor general should be given wider powers to investigate non-government entities in relation to the expenditure of government funds.

The review, led by Productivity commissioner Peter Achterstraat, was ordered last November amid a series of inquiries into the administration of the state government’s Stronger Community Grants.

Mr Achterstraat’s review, which makes 19 recommendations, was handed to the Premier Dominic Perrottet last month and made public over the weekend.

The report says the NSW Government normally spends about $4 billion each year on grants but this had recently blown out to $10 billion in response to COVID-19 and natural disasters.

However, “there is currently no publicly accessible, whole-of-government database of grants expenditure in NSW,” it found, and “it was not possible to definitively determine even a lower bound on grants expenditure in NSW from publicly available information”.

The report also notes that previous inquiries had found gaps in monitoring whether funds were achieving their intended goals.

“The varied nature and scale of NSW Government grants creates challenges to ensuring best practice grants administration,” Mr Achterstraat says.  

“Community expectations for timely and easy access to financial support must be balanced against requirements for accountability, probity, and transparency. “

A whole-of-government-database

The report found information about grants varies considerably across government programs and agencies, with big variations in how much and what type of data is published.

It recommends developing a whole-of-government database, possibly modelled on the Commonwealth’s GrantConnect website,  that includes up to date information on upcoming grants, awarded grants, ministerial decisions and grant program evaluations.

Moving to a central, web-based portal with proactive disclosure requirements will ensure that end-to-end grants data is universally accessible, transparent, and meets customer needs.

Reivew of grants administration in NSW report, April 2022

“Moving to a central, web-based portal with proactive disclosure requirements will ensure that end-to-end grants data is universally accessible, transparent, and meets customer needs,” the report says.

It says The Department of Regional NSW is developing an internal whole-of-government grants database that will eventually integrate with the Grants and Funding Finder, which is intended to eventually become a “comprehensive NSW Government solution” for grants information.

“Until such time as this database becomes available, this Review recommends the Grants and Funding Finder be further developed as soon as practicable to provide information on all available, upcoming, and awarded NSW Government grants, as well the use of ministerial discretion and the results of all grant program evaluations,” the report says.

“All agencies not yet supplying their grant information to the Grant and Funding Finder should take steps to do so. Until agencies can publish their grant opportunities on this site, they should publish the information  on their agency website.”

More power to the Auditor general

The report recommends handing more ‘follow the dollar’ powers to Auditor General, which would enable her to audit the expenditure of government funds regardless of where or by whom those funds are spent.

Currently, the NSW Auditor-General can’t audit public funds in the hands of nongovernment entities, such as a grantee.

“This Review has concluded that further consideration of the value of implementing ‘follow the dollar’ powers is required,” Mr Achterstraadt says.

“These powers have the potential to improve the end-to-end integrity of NSW Government grants administration.”

Pork barrelling

The report does not, however, recommend that pork-barrelling should be made an offence, saying there are already measures for unlawful condut arising from it.

It also says there’s no need to include the definition of pork barreling under the definition of ‘corrupt conduct’ in the ICAC Act.

“The ICAC Act already includes an extensive definition of what constitutes ‘corrupt conduct’ and the ICAC would have jurisdiction under the ICAC Act to investigate corrupt conduct associated with pork-barrelling,” it says.

The report doesn’t suggest removing the ability of Ministers and MPs to make suggestions for grant funding in their electorates, but says officials must document all input from MPs throughout the process.

The review recommends the creation of a new, binding grants administration, and includes a draft version as part of the report.

Premier Dominic Perrottet has welcomed the report and says the government will provide a full response in coming weeks.

“Grants are a significant part of the way the government supports communities and individuals – from COVID responses, to sports fields, to flood recovery, to small business assistance – it is an important way we work to deliver outcomes for the people of NSW,” he said in a statement.

“But all grants are ultimately funded by public money, and so it’s critical we also make sure they are administered fairly, effectively and transparently.”