Government grants set for a little more rigour from July

New rules are scheduled for Commonwealth grants from 1 July 2009, including-this is new?- an obligation on ministers and officials to record why a particular grant is an efficient and effective use of public money. Would be interesting to know the level of compliance with the other new requirement since 1 January to publish details of grants on each agency website- but no-one asked in Estimates last week. And to see what is released as a result of a request for -wait for it- the Grant report on grants.The following from Senate Estimates (Finance and Public Administration 27/5/2009) at 91-93 examination of the Department of Finance and Deregulation

Senator COONAN—Can someone at the table please give me an overview of the new Commonwealth grants framework that will replace the current discretionary grants framework?

Ms Campbell—The Department of Finance and Deregulation is working with a number of agencies across the Commonwealth to finalise and implement a comprehensive policy framework for grants from 1 July 2009. The framework will require that ministers and officials record the basis on which they are satisfied that approving particular grants is an efficient and effective use of public money. From 1 January 2009, agencies have been required to publish on their website, within seven working days after a funding agreement has been signed by both parties, the details of the grant. Also, ministers that are members of the House of
Representatives are to advise the minister for finance when they have approved individual grants to organisations within their own electorate. The new guidelines are going to be underpinned by changes to the Financial Management and Accountability Regulations. They will be amended by 1 July 2009 to ensure, particularly, that the basis of grant approval needs to be recorded.

Senator COONAN—Who has been consulted in relation to the guidelines? Has a draft been released?

Mr Suur—There has been a working group that involves various departments and agencies working on the draft guidelines now for some months. A second iteration of the guidelines went out this week for agency comment, and we hope to have that comment by the end of this week.

Senator COONAN—As I understand it from the answers that have been given, ministers will still be able to approve individual grants to organisations in their own electorates. Is that right?

Ms Campbell—That is correct. Those ministers will be required to notify the minister for finance.

Mr Suur—In fact, that arrangement has been in place since December 2007. It was an early decision of this government.

Ms Campbell—It gets published on the website...As Mr Suur said, some of these measures have been in place since 2007.

Senator COONAN—Which ones?

Ms Campbell—The minister of finance being notified of ministers approving grants. Initially there were requirements for seeking agreement, I think.

Mr Suur—Yes.

Ms Campbell—That has probably been overtaken by this additional transparency, where it is on the website as well as the minister being notified.

Senator COONAN—So there was initially a requirement that there would need to be agreement before the grant was made; is that right? Is that what you just said?

Ms Campbell—At first when the government was looking at the changes that it wanted to make to the grants framework to ensure a level of transparency and accountability I think there was a requirement that a committee consider such a grant. Since that time, there has been a review of the grants framework. There was a strategic review conducted about the best way to ensure the efficient effects were given ethical use of Commonwealth resources in a way that instilled the transparency and accountability that was required.

Senator COONAN—Who undertook the strategic review?

Ms Campbell—The review was undertaken by Mr Peter Grant.... He was assisted by an academic to have a look at the grants programs that have been put in place.

Senator COONAN—Has Mr Grant prepared a report?

Ms Campbell—Yes, he did.

Senator COONAN—Can we have a look at the report?

Ms Campbell—The report was generally advice to government, but—

Dr Watt—We will see what we can do. It is not a public report; we will see what we can do. We can perhaps give you some of it, which might help.

Senator COONAN—This is very interesting. Who was on the committee?

Ms Campbell—I am not aware of that. We will have to take that on notice and get back to you.

Dr Watt—We will take that on notice.

Senator COONAN—Was the committee made up of finance or other people? Who?

Dr Watt—It was a ministerial committee. There are a few things we need to clarify and we will before we go down that road.

Senator COONAN—You could appreciate that it sounds very like there was initially a requirement that grants were made in consultation with the minister for finance or that there had to be approval as opposed to simply notifying the minister of grants. That is what I want to know: was there ever an initial arrangement that was resiled from as a result of this review?

Ms Campbell—We will take that on notice, Senator.

Senator COONAN—You do not actually know that, is that right?

Ms Campbell—I think the initial arrangements that were put in place were pending the outcomes of the review. Once the review was finalised we had to look at the workability of this, at the actual administration of how government would continue to operate in a functional manner when there were a number of grants programs. We did not want to delay getting this funding to the people who would be given the grants.

Senator COONAN—It would be too difficult to. It would have to get a tick-off from the minister.

Dr Watt—It does complicate decision making.

Ms Campbell—The review found that this enhanced level of transparency, where it goes on the website within seven days and the minister was notified, would provide that level of accountability.