A government-dominated parliamentary committee has called on Sport Australia to clarify the legality of grants made during the sports rorts imbroglio and noted aspects of the administration of the scheme “did not satisfy public and community expectations”.
Parliament’s joint committee of public accounts and audit committee (JCPAA) examined the controversial awarding of funding under the community sport infrastructure grant (CSIG) program after the Australian National Audit Office (ANAO) excoriated the Coalition’s administration of the program in January.
The JCPAA, chaired by Liberal MP Lucy Wicks, on Monday acknowledged “the question raised by the auditor general regarding the legal basis for decision making”.
The committee recommended Sport Australia “seek legal advice to clarify the authority, duty and roles of the minister for sport and the Australia Sports Commission and report back to the committee the basis on which office holders in those roles can make decisions in future grants programs”.
The ANAO triggered a political storm at the beginning of the year by finding the government awarded $100m in sport grants that were not assessed on their merits in order to favour their “targeted” seats at the May 2019 election.
In its scathing assessment, the ANAO also sent up a flare about the legality of the grant making, noting it was “not evident to the ANAO what the legal authority was” for the former sports minister Bridget McKenzie to approve grants.
Independent legal experts have identified a number of legal issues with the CSIG program, including that there may be no constitutional power for the federal government to give sports grants and that McKenzie failed to formally direct Sport Australia to substitute her decisions for its own.
Lawyers for a tennis club denied a grant under the $100m program have launched a legal challenge against Sport Australia and McKenzie’s administration of the scheme, arguing that Sport Australia “took direction” from the government and as a result grants “were not made on merit” but rather “nakedly political grounds”.
The JCPAA made a number of other recommendations other than calling for clarity around legal authority. It recommended the finance department review current record keeping requirements “with a view to addressing probity issues, including a requirement for all parties involved in grant administration to disclose and record any conflicts of interest”.
It said changes should be made to ensure records were kept of the reasoning for decisions of a relevant minister or ministers to approve or reject grant applications and recommendations, including ministerial panels, and this was “particularly important where a minister approves a grant that a relevant official/entity has recommended be rejected or assessed as ineligible”.
The committee recommended that the Commonwealth Grants Rules and Guidelines be amended to include a new principle called “adherence to published guidelines” to “uphold the expectations of the parliament and other stakeholders and provide transparency to applicants when published criteria is amended”.
It said the guidelines should “emphasise the importance of ensuring that all relevant entities involved in grants administration receive and complete sufficient training, with documented processes to ensure the ongoing quality assurance of assessments”.
It recommended the finance department review the established reporting and compliance system and approach “to improve assurance that commonwealth grant program guidelines are adhered to at all points of grant administration for all applicable entities and decision makers”.
It has asked the department to report back to the committee on the outcome of the review within six months of the tabling of this report.
A separate Senate inquiry into the controversy has accused the government of “obstruction” after McKenzie refused to appear and her successor blocked the release of advice about the legality of the $100m program.
The Senate committee’s interim report said the former sports minister “has so far yet to accept an invitation” to explain aspects of the program including “how the final list of grant recipients in round three was changed without her knowledge or approval”.
The JCPAA on Monday also released a separate report into the management of major defence projects. It recommended that the defence department commission a performance review or an independent external audit of the government’s strife-torn helicopter acquisition program “in advance of upcoming helicopter acquisitions by navy and army”.
