Environment, Water, Heritage and the Arts

Audit strategy overview

The Environment, Water, Heritage and the Arts portfolio was established in December 2007. Portfolio responsibilities include taking a lead role in protecting and conserving Australia’s environment and heritage, securing an efficient and sustainable use of water resources and nurturing a lively arts and culture sector. The total budget for the portfolio in 2009–10 was $7.7 billion. The Department of the Environment, Water, Heritage and the Arts (DEWHA), the lead portfolio agency, has undergone recent changes with its energy efficiency function being transferred to the Department of Climate Change and Energy Efficiency in March 2010. The department is implementing major new policy initiatives in the areas of climate change, water reform, environmental conservation and natural resource management. DEWHA reports to two Ministers; the Minister for Environment Protection, Heritage and the Arts, and the Minister for Climate Change, Energy Efficiency and Water.

In recent years, the ANAO’s performance audits have focused on energy efficiency programs such as the Home Insulation Program, which formed part of the Nation Building—Economic Stimulus Plan, and the Green Loans program, as well as climate change and environmental programs. Compliance with the Environment Protection and Biodiversity Conservation Act 1999 has also been reviewed.

The ANAO’s audit strategy for the coming years will focus on water reforms, natural resource management initiatives and the funding provided to support Australian art and films. This strategy reflects the scale and inherent challenges of these types of initiatives, the significant funding available and the widespread community interest in these topics. It also reinforces the importance of the department effectively implementing such initiatives.

Audits in progress at 1 July 2010

Green Loans

The Government announced the Green Loans program in the May 2009 Budget. The program, valued at $175 million, was designed to:

• provide 360 000 households with Home Sustainability Assessments conducted by registered assessors; and
• offer a maximum of 75 000 loans of up to $10 000 interest free for up to four years to eligible householders to purchase items recommended by the assessments.

The objective of the audit is to examine key aspects of the establishment and administration of the Green Loans program by the Department of the Environment, Water, Heritage and the Arts (DEWHA) and the program’s transition to the Department of Climate Change and Energy Efficiency. Particular emphasis is being given to the program’s three primary elements:  training and accreditation of assessors; scheduling and conduct of Home Sustainability Assessments; and the framework for the payment and acquittal of assessors’ work and the Green Loans subsidies.

The audit report is expected to be tabled in the Spring 2010 Parliamentary Sittings.

Home Insulation Program

The Energy Efficient Homes Package formed part of the package of measures under the Nation Building—Economic Stimulus Plan ($42 billion). The package was part of the Government’s response to the global economic crisis and was announced by the former Prime Minister on 3 February 2009. The Energy Efficient Homes Package included the:

• Home Insulation Program—incentives for householders and renters in private rental accommodation to install insulation ($3.3 billion); and
• Solar Hot Water Rebate Program—expansion of incentives for householders to install solar hot water heaters ($0.5 million).

The objective of the audit is to assess key aspects of the establishment and administration of the Home Insulation Program by the Department of the Environment, Water, Heritage and the Arts as well as the transition of the program to the Department of Climate Change and Energy Efficiency. Particular emphasis will be given to the: design and establishment of the program; governance arrangements supporting the program; registration and training of installers; financial management and payment of rebates; and compliance strategy underpinning the program.

The audit report is expected to be tabled in the Spring 2010 Parliamentary Sittings.

Restoring the Balance in the Murray-Darling Basin

The Restoring the Balance in the Murray–Darling Basin Water Purchase program aims to acquire water entitlements from willing sellers that represent value for money, and use the water allocated to them for the environment. The program is designed to improve the health of the basin’s rivers, wetlands and floodplains. Annual water entitlement purchases will be run for the next 10 years with the Government committing $50 million in the first year (2007–08) to purchase rights from both the northern and southern sections of the basin.

The objective of the audit is to assess: DEWHA’s administrative arrangements and water purchasing methods for the program; and the Commonwealth Environmental Water Holder’s arrangements for making effective use of available water.

The audit report is expected to be tabled in the Autumn 2011 Parliamentary Sittings.

Potential audits

Sustainable Rural Water Use and Infrastructure Program

The Sustainable Rural Water Use and Infrastructure program is a large grants program of some $5.6 billion focused on projects that are able to secure a long-term sustainable future for irrigation communities, in the context of climate change and reduced water availability into the future. Projects are expected to help support and drive regional investment and development, secure regional economies and support the local community. They are also required to demonstrate a long-term economic and environmental benefit that can be sustained over a 20‑year horizon. In addition, projects are to deliver substantial and lasting returns of water to the environment to secure real improvements in river health.

An audit would examine the administration of the Sustainable Rural Water Use and Infrastructure program.

Caring for Our Country Program

The goal of the Caring for Our Country program is for Australians to enjoy an environment that is healthy, well-protected, well-managed, resilient, and that provides essential ecosystem services in a changing climate. The program aims to deliver funding to local communities through a regional funding model. In its initial five years (from 1 July 2008 to June 2013), the program will provide around $2 billion in funding for natural resource management. The program also includes two Indigenous-specific programs: Indigenous Protected Areas ($50 million over five years) and Working on Country ($90 million over five years).

An audit, or series of audits, would examine the administration of the Caring for Our Country program and whether the objectives of the program are being met. This audit would also involve the Department of Agriculture, Fisheries and Forestry as the program is jointly administered.

The Environment Protection and Biodiversity Conservation Act 1999—Follow on

Australia is home to more than one million species of plants and animals, many of which are found nowhere else on Earth. The State of the Environment Report (2006) noted that, while Australia’s biodiversity is of incalculable value, biodiversity continues to decline and faces ongoing pressures. The Environment Protection and Biodiversity Conservation Act 1999 (the EPBC Act) is the Government’s ‘flagship’ legislation to protect Australia’s biodiversity. The Act was designed to provide a legal framework for the conservation and sustainable use of Australia’s biodiversity. The Act requires the Minister to complete a list of threatened species and ecological communities and then develop recovery plans or conservation actions for these. It also outlines a range of requirements to regulate any interaction or possible threat to the survival of listed threatened species and ecological communities. As such, the Act is demanding in terms of the administrative support required to ensure the legislative provisions are met.

This audit would assess compliance with the EPBC Act and would follow on from previous ANAO audits into EPBC Act compliance and performance: Audit Report No.38 2002–03 Referrals, Assessment and Approvals under the Environment Protection and Biodiversity Conservation Act 1999 and Audit Report No.31 2006–07 The Conservation and Protection of National Threatened Species and Ecological Communities.

Australia Council

The Australia Council for the Arts is the Australian Government’s arts funding and advisory body. The council supports Australian art through funding, strengthening and developing the arts sector. It also collaborates to build new audiences, foster philanthropic support and deepen understanding of the arts through research. In 2008–09 $175.3 million in grant funding was provided to artists and arts organisations.

An audit would examine the Australia Council’s administration of its grants programs.

Screen Australia

Screen Australia was created under the Screen Australia Act 2008 and, from 1 July 2008, took over the functions and appropriations of its predecessor agencies: the Australian Film Commission, the Film Finance Corporation Australia and Film Australia Limited. Screen Australia supports the development, production, promotion and distribution of Australian screen content. Its functions are to support and promote the development of a highly creative, innovative and commercially sustainable Australian screen production industry. In the 2009–10 budget, Screen Australia’s resources were approximately $102 million.

An audit would examine the administration of Screen Australia’s grants programs.

The Establishment, Implementation and Administration of the Jobs Fund

On 5 April 2009, the Government announced further stimulus initiatives as part of the Jobs and Training Compact, with the former Prime Minister stating that the Compact was with Australians affected by the global recession and was promising training, support and local initiatives to help them get back to work. The Jobs and Training Compact was to have three elements, the largest being a $650 million Jobs Fund to help support local jobs and training through community projects in regions hardest hit by the economic downturn.

Two audits of the Jobs Fund are planned. The first audit would relate to the establishment, implementation and administration of the Infrastructure Employment Projects stream. This stream has been announced as involving $150 million for the construction of local infrastructure that would create immediate jobs in communities affected by the global recession. It is administered by the Department of Infrastructure, Transport, Regional Development and Local Government. The Department of the Prime Minister and Cabinet also plays a role in the initiation of projects for funding through this stream of the Fund with the Department of the Treasury involved in the making of payments for approved projects. In addition, the published guidelines for the Infrastructure Employment Projects stream state that projects initiated by the Australian Government will be referred to a joint departmental committee.

The second audit would examine the establishment, implementation and administration of the Local Jobs stream of the Jobs Fund. Through the Local Jobs stream, $300 million was to be available for community infrastructure projects with a focus on the promotion of environment-friendly technology and heritage. Of the funding available under this stream, $60 million was specifically set aside for heritage-related projects and $40 million was for the construction of bike paths (with the $100 million in quarantined funding not to extend past 30 June 2010). This stream, including the two quarantined sub-streams, related to commitments made by the Government in negotiations with the Australian Greens in the context of securing passage of the legislation relating to the Nation Building and Jobs Plan.

The audit scope would include all elements of the Local Jobs stream, the administration of which involves the Department of Education, Employment and Workplace Relations in respect to the general components of the Local Jobs stream, the Department of Environment, Water, Heritage and the Arts in respect to the quarantined heritage component and the Department of Infrastructure, Transport, Regional Development and Local Government in respect to the quarantined bike path component.

 

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