The Auditor-General responded on 20 April 2018 to correspondence from the Hon. Dr Mike Kelly MP dated 6 April 2018, requesting an audit of the administration of the Regional Jobs and Investment Packages (RJIP) program, specifically as it relates to the allocation of grant funding between electorates. The Acting Auditor-General followed-up on 23 January 2019 to advise Dr Kelly that an audit of the Regional Jobs and Investment Packages has now commenced.

Acting Auditor-General's follow-up

23 January 2019

The Hon Dr Mike Kelly AM MP
Federal Member for Eden-Monaro
PO Box 6022
Parliament House
CANBERRA ACT 2600

By email:   mike.kelly.mp@aph.gov.au

Dear Dr Kelly

Following on from your original letter of 6 April 2018 to the Auditor-General and his reply of 20 April 2018, regarding the administration of the Regional Jobs and Investment Program, this letter is to advise that I have decided to commence an audit titled ‘Award of Funding under the Regional Jobs and Investment Packages‘.  This audit commenced on 21 January 2019.

This audit will assess whether the award of funding under the Regional Jobs and Investment Packages program was informed by appropriate departmental advice and through processes that complied with the grants administration framework.  The audit is currently forecast to table in Parliament in November 2019.

If you would like to provide any input to the audit or subscribe to the audit to receive updates, this can be done through the following link: https://www.anao.gov.au/work-program/in-progress.

Yours sincerely

Rona Mellor PSM
Acting Auditor-General

Auditor-General's response

20 April 2018

Dear Dr Kelly

I am writing in response to your letter of 6 April 2018 requesting an audit of the administration of the Regional Jobs and Investment Packages (RJIP) program, specifically as it relates to the allocation of grant funding between electorates.

My office is currently progressing work on the annual audit work program (work program).  The work program is designed to inform the Parliament, the public and government entities of planned audit coverage in 2018–19. Section 10 of the Auditor-General Act 1997 sets out that, in performing my functions and powers, I must have regard to the audit priorities of the Parliament as determined by the Joint Committee of Public Accounts and Audit (JCPAA).  I have recently written to the JCPAA seeking comments on the draft work program. In addition to consulting with Parliament, I also consider it important to seek feedback from Australian Government entities and have therefore also written to the relevant accountable authorities that are the subject of proposed performance audit coverage. The Australian National Audit Office (ANAO) will also be inviting comment from the public on the draft program through the ANAO website over the period of 26 April to 10 May 2018.

The ANAO continues to have a focus on promoting transparency on the effective use of taxpayers money through audits of procurement processes, contract management and grants management.  It is with this in mind that I have noted your concerns in relation to the RJIP program and have included a proposed audit topic on RJIP in the draft 2018-19 work program. The scope of the audit would cover the Department of Infrastructure, Regional Development and Cities (which has overall responsibility for the program), as well as the Department of Industry, Innovation and Science (whose Business Grants Hub plays an important role in the delivery of the RJIP) and include the application, assessment and decision-making processes.

Following receipt and consideration of all feedback, the work program will be published in early July 2018. The work program will include around 100 potential performance audit and assurance review topics, and provides details about our in-progress performance audit and assurance work. Throughout the year, a decision is made as to which audits will commence, based on information such as identified audit priorities, recent developments in the public sector, requests for audit, and resourcing.

Yours sincerely

Grant Hehir

Correspondence from the Hon. Dr Mike Kelly MP

Transcript of letter from the Hon. Dr Mike Kelly MP

Australian National Audit Office
GPO Box 707
Canberra ACT 2601
AUSTRALIA


To whom it may concern


I am writing to bring to your attention discrepancies in the awarding of Commonwealth Government grants under the Regional Jobs and Infrastructure Package (RJIP) South Coast New South Wales.

The RJIP South Coast region covers two Federal Electorates, Gilmore held by a Liberal Party representative and Eden-Monaro held by a Labor representative. The funding available to the RJIP South Coast region was $20 million through three grant funding streams.

The funding allocation split between the two electorates was 18.5 million dollars to the electorate of Gilmore and 1.5 million dollars to the electorate of Eden-Monaro.

The heavy weighting towards the Liberal held seat of Gilmore in awarding these grants appears to be inconsistent with the Commonwealth Grant Guidelines, specifically those outlined in section 13.9

The ANAO has put an emphasis on the geographic distribution of grant activities as a measure of equitable distribution and as an indicator of party-political bias in the distribution of grants. The ANAO has emphasised that those involved in grants administration should, therefore, be aware that the geographic and political distribution of grants may be seen as indicators of the general equity of a grant opportunity.
https://www.finance.gov.au/sites/default/files/commonwealth-grants-rules...

Such a large inconsistency in the funding allocation between two electorates leads to questions being raised about the implementation of all the funding allocated through the RJIP across all the trial sites in Australia.

I would appreciate the assistance of the Australian National Audit Office to investigate if the RJI P adheres to the Commonwealth Grant Guidelines. Taking into account the differences in RJIP funding that are apparent between the funding allocated to Eden-Monaro and Gilmore, and investigating if there were equitable allocations of funding to all trial sites in Australia.

I look forward to your response.

Mike Kelly MP
Federal Member for Eden-Monaro
6 April 2018