The objective of the audit was to assess the efficiency and effectiveness of the establishment, implementation and administration of the general component of the Local Jobs stream of the Jobs Fund, with a particular focus on the establishment of program objectives and the extent to which approved grants have demonstrably contributed to the cost-effective achievement of those objectives.

Summary

Introduction

1. As part of its response to the global financial crisis, on 17 March 2009 the Government agreed to the establishment of an integrated $650 million Jobs Fund, consisting of three streams. The $300 million Local Jobs (LJ) and $200 million Get Communities Working (GCW) streams reflected commitments made in the context of securing passage (on 13 February 2009) of the $42 billion Nation Building and Jobs Plan legislation. The LJ stream was to fund community infrastructure projects with a focus on the promotion of environment-friendly technology and heritage, and comprised a $200 million general component and two quarantined components ($60 million for heritage projects and $40 million for bike paths).1 In line with the stimulus objectives of the Jobs Fund, all three streams were to be completed by 30 June 2011.2

2. The Jobs Fund formed one of two major initiatives under the ‘local communities’ element of the Jobs and Training Compact announced by the Government in April 2009. The other major initiative was the engagement of Local Employment Coordinators in 20 Priority Employment Areas (PEAs). These had been identified based on analysis by the Department of Education, Employment and Workplace Relations (DEEWR) of a range of labour market indicators to identify those regions across Australia with labour markets likely to experience disadvantage and deterioration as a result of the global recession.

3. DEEWR was the lead agency for the Jobs Fund and was responsible for administering the GCW stream and the general component of the LJ stream. Ministers agreed to a DEEWR official undertaking the role of approver for both rounds of those Jobs Fund components. For the first round, DEEWR was also responsible for allocating applications to the most appropriate stream or component for assessment (including those administered by other departments).

First funding round

4. The Jobs Fund guidelines published in April 2009 stipulated that, to be considered under any of the three streams, projects needed to address at least one of four target areas3, and meet each of three gateway criteria that reflected the employment stimulus objective of the Fund. Specifically:

  • projects must be in areas experiencing high unemployment, a significant rise in unemployment or vulnerability;
  • projects must be viable and ready to start; and
  • funding would not extend past 30 June 2011.

5. On 18 April 2009, a total of $100 million was announced as being available under the first round of the LJ and GCW streams, which closed to applications on 22 May 2009.4 Of the more than 2600 applications received, over 1600 applications seeking nearly $1.5 billion were considered under the two DEEWR-administered components. Applications were assessed through a single process, and allocated between the two streams as part of that process. The selection process was completed in August 2009, with $132.3 million5 being approved in three tranches for 173 projects ($50.1 million for 64 LJ projects and $82.2 million for 109 GCW projects). By December 2009, three GCW projects had been withdrawn, with that funding being used by DEEWR to approve $1.75 million for eight bike path projects under the general component of the LJ stream in January 2010.6

Re-targeting of the Jobs Fund

6. In June 2009, the Government commenced development of a whole of government strategy to build on existing initiatives to support Australian jobs, entitled ‘Keep Australia Working’. On 30 September 2009, a number of measures identified through the development of the final Keep Australia Working report were agreed to by government. This included re-targeting of the remaining Jobs Fund funds, then identified as totalling $242.8 million.

7. The Government agreed to allocate a total of $93.3 million to a second public call for the Jobs Fund ($51.9 million under LJ and $41.4 million under GCW), and that tighter, separate guidelines would be developed for both streams. The remaining funding was re-allocated to a number of other targeted employment initiatives, and to support the Australian Government contribution to the Victorian bushfire recovery.

Second funding round

8. The second call for applications was announced on 5 November 2009. Revised program guidelines stated that, in the second round, the LJ stream would focus on the creation of green jobs, development of green skills, promotion of energy efficient infrastructure and development of skills in future green industries. The GCW stream was to focus on projects to build community capacity, improve community strength and amenity and provide opportunities for disadvantaged job seekers, thereby creating jobs and opportunities in communities affected by the global recession.

9. The second round was again heavily subscribed, with 970 applications seeking $890.6 million being received by the closing date of 11 December 2009 (365 LJ applications seeking $331.3 million and 605 GCW applications seeking $559.3 million). In February 2010, a further $11.5 million was re-allocated from the Jobs Fund for the Government’s Insulation Worker Adjustment package. The second round was completed in March 2010, with 53 projects (five per cent of applications) being approved for amounts totalling $39 million ($17.5 million for 21 LJ projects and $21.5 million for 32 GCW projects), representing a significant under-allocation compared to the available funding.

Program closure

10. In the 2010–11 Budget, the Government announced that: ‘in light of revised growth forecasts for the national economy, the need for funding in the Local Jobs and the Get Communities Working streams has diminished.’ Funding for the Jobs Fund was reduced by $48.6 million over two years from 2009–10. Of the $193 million originally available under each of the Jobs Fund components administered by DEEWR, $69.3 million (36 per cent) was awarded under LJ, and $112.6 million (58 per cent) was awarded under GCW. The remainder was reallocated to other measures or returned to the Budget.

11. As noted, funding for Jobs Fund projects administered by DEEWR was originally budgeted to end on 30 June 2011. However, to allow certain projects that had experienced delays to receive funding in the 2011–12 financial year (including five of the 92 contracted LJ projects), the Jobs Fund guidelines were amended in March 2011 to extend the program end date to 30 June 2012.7

Audit objectives, scope and criteria

12. The objective of the audit was to assess the efficiency8 and effectiveness of the establishment, implementation and administration of the general component of the Local Jobs stream of the Jobs Fund, with a particular focus on the establishment of program objectives and the extent to which approved grants have demonstrably contributed to the cost-effective achievement of those objectives.

13. The focus of this audit is the two rounds of the general component of the LJ stream, including the administration of approved projects to achieve program objectives. However, reflecting the integrated approach taken by DEEWR to the selection processes for each round, the audit analysis necessarily includes reference to the concurrent conduct of the two rounds of the GCW stream. ANAO did not examine the establishment and operation of the Get Communities Working Advisory Council. The audit examined the program against relevant policy and legislative requirements for the expenditure of public money and the Commonwealth Grant Guidelines(CGGs).

Overall conclusion

14. The Jobs Fund was established to provide timely and targeted employment stimulus and opportunities in communities affected by the global recession and for disadvantaged job seekers. Consistent with this objective, DEEWR implemented the program in a short timeframe and the department was focussed on directing the available funding to those areas identified as being at greatest risk as a result of the economic downturn.9

15. Projects funded under the LJ stream contributed to the provision of employment and training opportunities in areas affected by the global economic downturn. Nevertheless, delays in establishing funding agreements for many of the first round projects and subsequent project implementation delays affected the rate of program expenditure and, consequently, the timeliness with which employment benefits were achieved.10 In addition, aspects of the methodology adopted for identifying the actual employment and training outcomes of each project reduced the reliability of DEEWR’s performance information as a measure of the employment stimulus directly generated.11

16. The approach taken by DEEWR to program implementation and administration was, in a number of important respects, considerably more robust that the approach taken in respect to other elements of the Jobs Fund audited by ANAO.12 For example, DEEWR: developed a comprehensive suite of internal documentation to govern program implementation; invested considerable resources in developing and implementing a methodology for scoring applications against the published selection criteria; included expected employment and training outcomes in the funding agreements for the contracted projects; and adopted a disciplined approach to managing these funding agreements. It was also evident that DEEWR adopted some important improvements to its approach for the second round compared with the first round.

17. An important focus for any competitive grant program is to select those applications that best represent value for public money in the context of the desired objectives and outcomes of the grant program. However, aspects of the approach taken by DEEWR diminished the capacity for the documented selection processes to demonstrate that the projects approved under each round were the most meritorious in terms of the program guidelines.13 In particular, the recorded assessment of the merits of competing applications in terms of the published criteria was not a strong indicator of the projects that would be selected for funding.14 In addition, despite the Jobs Fund being a nationally competitive grant program:

  • funding decisions were taken for the first round in respect to some projects before all applications had been considered (and in some cases assessed); and
  • for both rounds, the potential geographic distribution of funded projects, including in relation to the 20 defined PEAs, influenced the selection deliberations in a manner that had not been provided for in the published program guidelines.

18. Against this background, ANAO has made one recommendation relating to the design of the program guidelines and selection processes to be applied by DEEWR in future competitive grant programs.

19. In response to the global financial crisis, a series of stimulus measures were announced by the Government in late 2008 and early 2009 with the objective of providing a timely, targeted and temporary boost to economic activity. The experience with the LJ stream, the other elements of the Jobs Fund audited by ANAO and audits of other economic stimulus programs has highlighted that, although funding infrastructure projects that were not already proceeding can offer long-term community benefits, for economic stimulus purposes there are challenges which are commonly underestimated in having infrastructure projects delivered in the desired timeframe15 with clearly identifiable employment benefits. In this context, the audits by the ANAO, and other reviews of the implementation of particular economic stimulus programs, should provide useful lessons in future circumstances where fiscal stimulus is being considered to support employment and promote economic activity.

Key findings by chapter

Program establishment (chapter 2)

20. For both rounds of the Jobs Fund, DEEWR developed a comprehensive suite of internal documentation. However, particularly in the first round, the originally documented procedures were not fully implemented. Revised program documentation to reflect the actual processes applied was developed during, and subsequent to, the selection process. In that respect, the departmental procedural guides were not established and maintained in a manner that enabled the date of effect of the original version, and of any subsequent revisions to authorised procedures, to be readily identified. The accountability of DEEWR’s administration of future grant programs would be enhanced if:

  • the roles and procedures actually undertaken reflected the procedural guides established to govern the conduct of the selection process; and
  • the date of effect of any revisions to the documented procedures was clearly identifiable such that the actions taken are able to be compared to the approved procedures at the relevant point in time.

21. The significant response to the first call for proposals gave rise to a number of challenges for DEEWR in maintaining an orderly process for receipting and registering applications, and allocating projects to the most appropriate Jobs Fund component for assessment. The request that applications be submitted via both email and in hard copy increased the volume of material to be handled and the complexity of identifying the population of compliant applications that were to be assessed. Various aspects of the approach taken to completing the register of proposals diminished its capacity to provide an accurate and complete record of applications received. In addition, the originally documented procedures for registering and assessing proposals were not fully implemented, particularly for those received via email.

22. In this respect, it had been anticipated from the outset that there would be more than one funding round under the Jobs Fund. The program guidelines had also stated that proposals could be submitted at any time from 1 July 2009, suggesting an open-ended submission process. That advice was contradictory to the closed round approach identified in the public announcement of the first round and subsequently applied in the selection process. However, it influenced the approach DEEWR adopted to administering some proposals, in that the department operated on an expectation that projects not considered in the first round selection process could be considered in a subsequent round.

23. As a result of these various factors, a number of errors and anomalies arose that impacted upon whether certain applications submitted in response to the first call for applications were considered through the same processes (and at the same time) as other projects competing for the available funding. Specifically, more than 260 applications (some 10 per cent) were not assessed until after the outcome of the competitive selection processes for the relevant Jobs Fund components had been finalised. This situation significantly impacted upon the capacity for those applications to receive funding consideration in the same manner afforded other applications submitted in response to the first call for proposals.16

24. For the second round, DEEWR adopted various measures to address issues that had arisen in the application process for the first round and to provide enhanced transparency and accountability over the management of late and non-conforming proposals. Collectively, these measures significantly improved the accuracy, efficiency and effectiveness of the application process and helped to largely eliminate the anomalies that had arisen in relation to the first round. One area in which the equity and effectiveness of the application process could have been further improved was in relation to the format in which applications were able to be submitted. In this respect, applicants were limited to submitting applications in a specific spreadsheet format, via email. This resulted in some applicants experiencing difficulties in completing and lodging applications by the required date and time.

First round selection processes (chapter 3)

25. The targeted stimulus objective of the Jobs Fund was reflected in the three gateway criteria and four target areas set out in the program guidelines as the criteria on which projects would be selected (see paragraph 4). Projects would also be subject to due diligence and risk assessment, including that applications would need to demonstrate that the project represented value for money for the Australian Government. The program guidelines stated that each proposal would be assessed on its merits, and in comparison to other proposals submitted at the same time or previously.

26. Projects were assessed and scored against the gateway criteria and target areas. To be eligible for funding consideration, a project needed to achieve at least the minimum identified pass score against each of the three gateway criteria and at least one of the four target areas. However, the selection methodology did not seek to encapsulate within the assessment scores all factors that would be taken into account in selecting projects for approval. In particular, there was no provision for an assessment of the value for money factors identified in the published program guidelines to be incorporated into the scores assigned to each project. These aspects were to be considered as part of the deliberations of the Assessment Review Committee (ARC) (a committee of senior DEEWR officials established to provide funding recommendations to the departmental approval delegate). As it eventuated, 173 (43 per cent) of the 405 projects that achieved eligible scores were approved (64 under LJ stream and 109 under GCW).

27. The ARC deliberative process involved a significant resource commitment at a senior level and was generally well documented. The committee members exhibited awareness of the need to consider overall merit in making decisions in relation to individual projects. However, aspects of the approach taken diminished the capacity for the documented selection process to demonstrate that the 173 approved projects were the most meritorious (in terms of the published program guidelines) of the more than 1600 applications considered. This included that, despite the Jobs Fund being conducted as a nationally competitive grant program:

  • the applications received were not considered as a single, ranked population based on their respective scores against the selection criteria. The deliberative process involved 25 meetings over seven weeks, with decisions being taken on a project by project basis (with projects being considered in groups based upon the PEA in which they were located). That process did not seek to explicitly demonstrate, prior to decisions being taken, the merits of each proposal relative to all competing proposals. A mechanism for incorporating the ARC’s conclusions regarding each project’s claims against the program guidelines, including in relation to value for money, into a final score or rating was not established. Eligible projects were not ranked on a national basis (either overall or within each stream) at the conclusion of the ARC process; and
  • projects were approved in three tranches, with some being approved before all competing applications had been considered (or, in some cases, assessed). The first two tranches were based entirely on projects that were located in the 20 PEAs and Victorian bushfire area to the exclusion of other projects, regardless of their respective selection criteria scores. A first tranche of 13 projects in four areas prioritised for consideration due to upcoming Jobs Expos was approved on 10 July 2009, at which time the ARC had considered only 15 per cent of applications. On 31 July 2009, $107.61 million was approved for 125 projects located in a PEA, including the 13 first tranche projects. This more than exhausted the available funding, such that the merits of non-PEA projects had not been considered. The then Minister for Employment Participation subsequently agreed to allocate up to a further $40 million to the first round, with the Minister asking for projects to be re-assessed on a national basis. The ARC then considered the merits of 120 projects not located in a PEA, more than a third of which (41, 34 per cent) were approved on 14 August 2009. A further seven PEA projects were also approved, resulting in a final first round outcome of 173 projects approved for funding totalling $132.3 million.

28. Subsequent to the conclusion of the first round of the LJ and GCW streams, assessment processes were applied by DEEWR in respect to at least 226 projects incorrectly excluded from the competitive selection process as a result of various errors and anomalies (as discussed in chapter 2 of this report). Similar to the approach taken in respect to the substantive first round selection process, DEEWR did not seek to establish, through a consistent assessment and deliberative process, the merit of each of those projects relative to the overall population of proposals received in response to the first call for applications. In particular, DEEWR considered those additional proposals in separate tranches, including a final tranche involving 33 bike path projects that had not been appropriately referred to the quarantined bike path component prior to that component’s funding being exhausted. In agreeing to apply funds that had become available from previously approved GCW and LJ projects to approve (under the general component of the LJ stream) all eight of those bike path projects that achieved at least the minimum scores required for funding consideration, DEEWR did not seek to establish whether those projects were the most meritorious of all of the as yet unfunded first round applications in terms the program objectives and guidelines.

29. Having regard for the context in which the Jobs Fund was established, the department’s focus on ensuring funding was directed to the areas identified as being at greatest risk as a result of the economic downturn (that is, the PEAs) was reasonable. Indeed, the selection approach adopted by DEEWR had considerably greater regard for this key aspect of the program than did the selection processes undertaken in respect to the other Jobs Fund components that have been examined by ANAO.17

30. However, care needed to be taken to ensure the implementation of that policy intention remained consistent with the principles of sound grants administration. In particular, it is inconsistent with the effective conduct of a nationally competitive grant program to take funding decisions before all applications have been assessed. The guidelines also made no reference to the defined PEAs, instead including as the first gateway criterion the broader requirement for projects to be in an area experiencing high or increasing unemployment or vulnerability (with a project being located in a PEA representing one way this criterion could be assessed as being met). An assessment of the extent to which that criterion had been met also involved consideration of the nature of the employment stimulus that would be generated in the relevant area of disadvantage. Based on the assessment methodology adopted by DEEWR, the extent to which each project satisfied the program priorities relative to other projects should have been reflected in the scored assessments.

31. In that context, despite the processes applied by DEEWR to promote the quality and consistency of the scored assessment process, the final scores assigned to competing projects did not prove to be a strong indicator of the projects that would be selected. The inclusion of a mechanism to establish a final merit ranking of all competing projects incorporating relevant ARC deliberations would have significantly enhanced the capacity to demonstrate that the funded projects represented the most meritorious in terms of the published program guidelines. It would also have provided a means of reconciling the assessment criteria scores allocated to each project with the selection process outcome in a manner that the brief qualitative comments recorded by the ARC in relation to individual projects had a limited capacity to do. In that respect, at the conclusion of the selection process, there were nearly the same number of unapproved projects with eligible gateway scores of 10 or more out of the maximum score of 15 (144 projects), as there were approved projects with the minimum pass score of nine (145 projects).18

Second round selection processes (chapter 4)

32. The approach initially adopted for presenting applications for ARC consideration in the second rounds of the LJ and GCW streams of the Jobs Fund represented a significant improvement over that taken in the first round. Specifically, the assessment of applications against the selection criteria was largely completed prior to the ARC commencing its deliberations. Projects needed to achieve the minimum identified pass score for each of the five selection criteria to be eligible for funding consideration. Based on the scores allocated, a national merit ranking and recommended funding cut off score for each stream was prepared, having regard for the funding available.

33. However, proposals were not considered by the ARC in the order of their respective national ranking, but rather on a state by state basis. In that context, the available evidence is that some projects under both streams that had scores below the relevant funding cut-off score first came to be specifically considered by the ARC having regard for the potential geographic distribution of recommended projects in terms of both jurisdictions and PEAs. Such an approach had not been provided for in the program guidelines.

34. Following consideration of comments from the departmental approval delegate on 65 projects identified as recommended or possible across the two streams, the ARC recommended 50 projects for approval. Those projects were approved by the delegate on 18 March 2010. Some days later, the delegate approved a further three projects, taking total approved funding to $39 million. This represented a significant under-allocation compared to the $81 million available, with the approved projects representing just five per cent of applications received. In that context, it is reasonable to expect there to be a high degree of correlation between the projects that had achieved the highest scores against the selection criteria and those that were recommended for approval. However, this was not the case.

35. The conclusions by the ARC as to whether a project represented ‘value for money’ were determinative as to whether it was successful. Many highly scored projects were not funded despite the significant under-allocation of available funding, while other lower scored projects were approved. In that context, the documented ARC process reflected the department’s awareness of the need to direct funding to projects that would provide value for money and minimise risk. It is apparent that ARC members went to considerable effort in their deliberations and made a range of appropriate inquiries in order to satisfy themselves that recommended projects would not represent an undue risk in terms of the public money involved. However, as with the first round, those deliberations were not undertaken within a framework that sought to reconcile the range of scores achieved by each of the eligibly scored projects with the committee’s reasons for deciding whether they respectively merited funding. Instead, the judgements brought to bear by the ARC were expressed in qualitative terms.

36. The transparency of the ARC decision-making process would have greatly benefited from the committee directly relating its decisions as to whether each project was suitable for funding to the selection criteria set out in the program guidelines, and the relative merits of competing projects. However, the ARC did not seek to recalibrate the national ranking in order to provide an objective measure of the final assessed relative merits of competing projects within each stream. This significantly diminished the utility of applying a robust quantitative ranking methodology.

Program outcomes (chapter 5)

37. Through financial stimulus, the primary objective of the Jobs Fund was to support and create jobs and employment opportunities in communities affected by the global recession and for disadvantaged job seekers. For the LJ stream, this was to be achieved through projects focussed on also providing community and environmental benefits. In this respect, expected employment and training outcomes were included in funding agreements as milestone requirements to be achieved in order for the funding recipient to receive the associated payment. This was a significant improvement over the approach adopted in relation to the other components of the Local Jobs stream.19

38. DEEWR’s administration of the 92 contracted LJ stream projects was effective in terms of aligning the payment of grant funds with the demonstrated achievement of project milestones and outcomes. This included a prudent risk management approach to structuring contracted grant payments. DEEWR actively monitored project progress and, where projects experienced significant delays, generally took proactive steps to develop remedial strategies that would assist in maximising the delivery of the project within the required timeframe, while appropriately managing risk.

39. The establishment of funding agreements for a number of the 64 first round projects approved in August 2009 and the seven bike path projects approved in January 2010 that were ultimately contracted was somewhat delayed. Further, as a consequence of projects’ inability to progress at the rate anticipated (despite having been approved on the basis they met the requirement to be ready to start), program expenditure was delayed compared to the expectations established by the 92 funding agreements. By the end of March 2010 (12 months after the Jobs Fund was agreed to as a measure to provide immediate employment stimulus, and more than seven months after the first round selection process had been completed), actual payments totalled $12.2 million. This fell $9.8 million (45 per cent) short of the $22 million contracted to have been paid from September 2009 (when funding agreements were first signed) to 31 March 2010.

40. A number of projects subsequently experienced further delays in meeting contracted project milestones, with this being reflected in the rate at which further payments were able to be made. There was a strong focus on the need to effectively manage outstanding projects in the lead up to the budgeted program end-date of 30 June 2011, which was largely successful in enabling projects to be finalised to the department’s satisfaction by that time. However, in March 2011, the end-date for the Jobs Fund was extended from 30 June 2011 to 30 June 2012 to allow for completion of projects disrupted by floods and other delays, in order to enable the expected community benefits to come to fruition. Funding of $14.5 million was moved into the 2011–12 financial year, including $1.43 million for five LJ projects (five per cent of contracted LJ projects). The last payment for those five projects was made in June 2012.

41. DEEWR has undertaken a range of evaluation activities in relation to the Jobs Fund and the broader Jobs and Training Compact. In this context, in terms of employment stimulus, more than half (51 projects, 55 per cent) of the 92 LJ projects reported that they had achieved paid employment outcomes greater than those originally contracted; and 72 (78 per cent) reported over‑achievement in terms of unpaid work experience positions. However, reflecting the project delays that affected the rate of program expenditure, less than a third (29 per cent) of positions had been reported to DEEWR as achieved by the end of the first year of the Jobs Fund on 30 June 2010.

42. In addition, aspects of the methodology adopted for identifying the actual employment and training outcomes of each project indicate that DEEWR’s performance information for individual projects, and the program as a whole, needs to be treated with some caution as a reliable measure of the employment stimulus directly generated by funded projects. This particularly relates to the comparability of the bases on which expected and actual outcomes were measured, and the extent to which reported positions reflect a contribution to general economic activity rather than direct employment outcomes. In terms of the achievement of targeted employment stimulus, 68 (74 per cent) of the 92 LJ projects were located in one of the 20 identified PEAs. A further five projects (five per cent) were located in the Victorian bushfire areas also prioritised by DEEWR. Collectively, those projects accounted for 81 per cent of contracted positions, and 86 per cent of reported actual positions. However, there is not a reliable measure of the extent to which the participants engaged in the reported positions had been drawn from the targeted areas and groups of job seekers.

Agency response to the proposed audit report

43. DEEWR’s response to the proposed audit report is provided below.

The Auditor-General’s report acknowledges that projects funded under the general component of the Local Jobs Stream administered by the Department of Education, Employment and Workplace Relations made a substantial contribution to the provision of employment and training opportunities in areas affected by the global economic downturn.

The Jobs Fund was set up to create jobs, and to develop skilled workers through projects that build community and social infrastructure. It was established to help communities most affected by the global economic downturn. It supported the building of community facilities, improvements to training and community amenities and establishment of social enterprises, creating almost 10 500 jobs, more than 2800 traineeships and over 5600 work experience positions.

Reflecting its economic stimulus objective, the Jobs Fund was implemented within a relatively short timeframe for a competitive grant program, and the report notes the continued improvements implemented by the Department during the assessment process, with the approach adapted in the second round for the approval of applications a significant improvement over the first round. The Auditor-General’s report also notes DEEWR’s administration of the Local Jobs Stream was effective in terms of aligning payments of grant funds with demonstrated achievement of project milestones and outcomes.

Recommendations

Recommendation No.1

Para 4.94

ANAO recommends that, for future competitive grant programs, the Department of Education, Employment and Workplace Relations incorporates within the design of the program guidelines and selection methodology:

(a) criteria and an associated scoring or rating approach that encapsulates all matters considered relevant to identifying the most meritorious projects, having regard for the program objectives and the obligations applying to decisions to approve grants of public money; and

(b) the process by which the final score or rating assigned to each project will reflect the matters considered in the selection deliberations and be used to drive the compilation of the merit list of eligible applications.

DEEWR response: Agreed.

Footnotes

[1] The GCW stream was for self-sustaining projects which created jobs and provided activities and services to improve community amenity. Projects under the $150 million Infrastructure Employment Projects (IEP) stream were to be initiated by the Australian Government.

[2] The quarantined components of the LJ stream were to be completed by 30 June 2010.

[3] The four target areas were: create jobs or retain people in jobs at risk due to the downturn; build skills for the future; build community infrastructure or improve community amenity which generates local jobs; and provide seed funding for social enterprises to start up, maintain or expand services, generating jobs and improving community services.

[4] A further $100 million relating to the two quarantined components of the LJ stream was also allocated through the first round, and $11 million of GCW stream funding was allocated for Temporary Financial Assistance grants that were also able to be applied for under the first call for proposals.

[5] In August 2009, first round funding was increased to up to $140 million (see paragraphs 3.35 to 3.38).

[6] This issue is discussed further at paragraphs 2.30 to 2.34 and 3.75 to 3.83.

[7] In this respect, none of the Jobs Fund components were completed by the originally budgeted end dates. An amendment to the program guidelines to extend the IEP stream to 30 June 2012 took effect on 5 July 2010. The two quarantined components budgeted to end in June 2010 were both extended to June 2011 due to project delays, with this being done through the movement of funds only.

[8] As an economic stimulus program, efficiency was assessed with particular attention to whether the selection and funding agreement processes were undertaken in a timely manner. This emphasis was consistent with the criterion adopted by the Government for the design of the stimulus packages established in response to the global financial crisis (see further at paragraph 5.1).

[9] In total, 68 (74 per cent) of the 92 LJ projects were located in one of the 20 PEAs. A further five projects (five per cent) were located in the Victorian bushfire areas also prioritised by DEEWR. Collectively, those projects accounted for 81 per cent of contracted positions, and 86 per cent of reported actual positions.

[10] Less than a third (29 per cent) of positions had been reported to DEEWR as achieved by the end of the first year of the Jobs Fund on 30 June 2010.

[11] This particularly relates to the comparability of the bases on which expected and actual outcomes were measured, and the extent to which reported positions reflect a contribution to general economic activity rather than direct employment outcomes.

[12] See ANAO Audit Report No.7 2011–12, Establishment, Implementation and Administration of the Infrastructure Employment Projects Stream of the Jobs Fund, Canberra, 22 September 2011; ANAO Audit Report No.27 2011–12, Establishment, Implementation and Administration of the Bike Paths Component of the Local Jobs Stream of the Jobs Fund, Canberra, 20 March 2012; and ANAO Audit Report No.11 2012–13, Establishment, Implementation and Administration of the Quarantined Heritage Component of the Local Jobs Stream of the Jobs Fund, Canberra, 27 November 2012.

[13] See further at paragraph 36 in respect to the approach taken by the Assessment Review Committee.

[14] Subsequent conclusions reached by the Assessment Review Committee in relation to each project were determinative as to whether each project was recommended for funding, rather than the moderated and quality assured scored assessments against the published criteria being relied upon as the basis for identifying a project’s relative merit.

[15] This relates to both projects commencing on time (for example, for the LJ stream, payments by March 2010 fell 45 per cent short of the amount contracted to have been paid) and projects progressing as planned (for the LJ stream, reflecting project delays, less than a third of positions reported to DEEWR as being achieved had been delivered by the end of the first year of the planned two year duration of the Jobs Fund). This situation was reflected in funding being redirected (see Appendix 1) as well as the program funding allocated through the second round being significantly less than was available (as the need for stimulus had reduced, as outlined in Chapter 4 of this report).

[16] This issue is discussed further at paragraphs 28 and 3.63 to 3.83.

[17] Specifically, ANAO’s audits of the IEP stream and the quarantined bike path and heritage components of the LJ stream identified that, in each case, the selection processes adopted had not resulted in funding being appropriately targeted at projects that had demonstrably satisfied the requirement to be in an area of high or increasing unemployment or vulnerability (see ANAO Audit Report No. 7 2011–12, op. cit.; ANAO Audit Report No.27 2011–12, op. cit.; and ANAO Audit Report No.11 2012–13, op. cit).

[18] See further in Table 3.4.

[19] Neither of the departments responsible for administering the quarantined components included employment outcomes within the contracted project outcomes or milestone requirements (see ANAO Audit Report No.27 2011–12, op. cit., pp. 143–145 and ANAO Audit Report No.11 2012–13, op. cit., p.153).