Minister defied agency to give grants to marginal seats, audit found

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The federal government used grants from a sports infrastructure program to target key electorates in the months leading up to the election, the Australian National Audit Office has found.

The audit report released on Wednesday noted 684 grants totalling $100 million were awarded by then-sports minister — now agriculture minister — Bridget McKenzie in three rounds between December 2018 and April 2019.

Auditor-general Grant Hehir concluded the award of funding was not informed by the appropriate assessment process or advice from Sport Australia, and noted potentially dodgy intentions.

“There was evidence of distribution bias in the award of grant funding,” the report stated.

“The award of funding reflected the approach documented by the minister’s office of focusing on ‘marginal’ electorates held by the coalition as well as those electorates held by other parties or independent members that were to be ‘targeted’ by the coalition at the 2019 election.

“Applications from projects located in those electorates were more successful in being awarded funding than if funding was allocated on the basis of merit assessed against the published program guidelines.”

In doing its job, Commonwealth agency Sport Australia recommended hundreds of grants for funding, but they were rejected by McKenzie.

Projects in her office’s target electorates had only applied for 36% of the funding, the report noted, but received 47% of the amount in the first round. Further, 73% of projects given money in the third round had not been recommended by Sport Australia.

In September 2019, McKenzie’s then-chief of staff told the ANAO the program’s success “relied on the support across parliament so needed to make sure the spread of projects reflected the statistics and could be seen as fair”.

“Equally we were sensitive to the accusations of pork barreling so we were very conscious of projects for the Nationals, as the National Party deputy leader, for Victoria as senator for Victoria or with Independents as her electorate office was in Indi so we made sure that we were not over-represented in these areas,” the staffer said.

However, ANAO noted McKenzie’s office went against formal guidelines and Sport Australia’s process, highlighting that it was “not evident to the ANAO what the legal authority was” for the minister to approve funding.

Hehir also found reasons for funding “were not clearly documented”.

ANAO made three recommendations to Sport Australia, to which it agreed. The audit office called on Sport Australia to “identify strategies to manage the expected level of demand for the amount of funding that is being made available” when designing applications-based grant programs.

The agency should also require employees involved in the design and oversight of funding programs to declare conflicts of interest, and it should better record the reasons for the assessment scores that are awarded, ANAO recommended.

In its response, Sport Australia argued a short time frame to administer the Community Sport Infrastructure Grant Program had exacerbated problems.

“Timing and resourcing pressures contributed to the process issues identified by the auditor-general,” it said.

The agency noted its “record of best practice in public grants administration has been sound for many years”, and it was already taking steps to address the issues outlined in the report.

In an additional statement released yesterday, Sport Australia said the grant program “has been delivering positive outcomes for hundreds of grassroots sporting organisations and local communities around the country, supporting construction and upgrades at sporting facilities to help increase participation and get more Australians moving”.