Sport Australia’s claim in court that it provided final approval of $100m of grants in the sports rorts program has been undercut by evidence to the Senate inquiry that Bridget McKenzie overturned decisions and gave permission to vary grants.
Minutes from Sport Australia’s finance audit and risk committee revealed that in December 2018 it believed the then-sport minister had “overturned” its recommendations, a “variation in the approval process” that it noted as a risk.
But in the federal court, where it is defending the legality of the program against Beechworth Lawn Tennis Club, Sport Australia claimed it retained the final say on which applications would be approved for funding.
The inconsistency was revealed by the University of Sydney law school constitutional expert, Anne Twomey, in an article in the Canadian Journal of Comparative and Contemporary Law titled “Constitutional Risk”, Disrespect for the Rule of Law and Democratic Decay.
In its court defence, Sport Australia claimed the community sport infrastructure grant program guidelines stating the minister would “provide final approval” and the minister’s decision was “final in all matters” were incorrect. That was because sections had been copied from a finance department template, it said.
Sport Australia claimed that after McKenzie “selected” projects for funding, it nevertheless retained “full discretion” to withdraw the grant or vary its terms.
Sport Australia cited unspecified occasions where it had not entered “into grant agreements for all projects approved by the minister or for all grant amounts approved by the minister”.
But Twomey’s article noted that Sport Australia had first received permission from McKenzie to vary the scope or value of agreements, which she described to Guardian Australia as “inconsistent” with the pleadings.
In the ministerial submission regarding the final round of grants, signed and dated 4 April 2019, the health department asked McKenzie to “approve Sport Australia as delegate to make minor changes to the scope/amount of individual grants approved by you”.
The brief sought McKenzie’s approval for 245 grants recommended by Sport Australia, but was amended by hand to instead approve grants “approved by the minister”.
“It was the minister’s list that was given effect – not that recommended by [Sport Australia],” Twomey said.
Twomey argued that Sport Australia’s “own records show that it regarded the minister as the final decision-maker”.
She cited the 13 December 2018 minutes of the audit and risk committee, which were supplied to the Senate inquiry into the program.
Those minutes stated the minister had “overturned some of the recommendations that were put forward to her and endorsed others that were not part of the original recommendations”.
“Whilst this is not the ideal outcome, it was noted the Office for Sport had been engaged and the risks of the variation in the approval process had been comprehensively articulated,” the minutes said.
Twomey concluded that Sport Australia “did not independently exercise its powers, taking into account the minister’s views”.
“It acted at the dictation of the minister, despite expressing concern about the effect upon the ‘integrity of the assessment process’ and the risks involved,” she wrote.
Twomey told Guardian Australia that Sport Australia’s pleadings “seem to contradict the evidence given by the Department of Health and senator McKenzie to the Senate select committee”.
“Both of them asserted that senator McKenzie, as minister, was the decision-maker in relation to these grants.
“While Sport Australia is correct that it was the one that had the power to make the grants – not the minister – its actions suggest that it acted at the dictation of the minister.”
In January 2020, a scathing auditor general’s report found McKenzie and her office had skewed the program towards targeted and marginal seats. The report also said it was “not evident” what McKenzie’s legal authority was to give grants.
McKenzie resigned over her undisclosed membership of the Wangaratta Clay Target Club but has denied any wrongdoing in the administration of the wider program.
In May 2020, McKenzie told reporters in Canberra that money was properly appropriated through the budget and the program was “designed to give the minister final approval”.
When asked about the basis of her legal authority, McKenzie replied it was a “government decision … to run this program through Sport Australia”.
“If there was any issue around the legality of how this program was going to be run, then my expectation of the Australian public service would [be] that it would have raised it with me.”
Guardian Australia contacted Sport Australia for comment.
