Background

State government agencies provide hundreds of millions of dollars in grant funding to various organisations each year. A grant is a financial assistance arrangement or contribution provided to either a non-government organisation, another public authority or an individual for discrete purpose and period, by either instalment or lump sum.

Good grant administration ensures that grants are awarded equitably, expended for the intended purposes and contribute to the intended program outcomes. Agencies need to demonstrate that assessment and approval of applications is in accordance with approved policies and processes, and grant programs are monitored and results evaluated.

Our last detailed report on the administration of grants (Public Sector Performance Report, June 2007) examined the grants program at 2 agencies. That report found both agencies were adequately administering their grant programs, though there was room for improvement.

What we did

The focus of this audit was to assess whether 8 agencies (listed at Table 1) had controls and procedures in place to ensure compliance with requirements at the various stages of the grant process, including awarding and approval of grants, monitoring of grant milestones and acquittal of grants.

We assessed practices at the 8 agencies using the following lines of inquiry:

1. Do agencies have suitable policies and procedures for managing grant expenditure?
2. Are applications assessed and approved in a transparent and equitable manner?
3. Are funded projects and activities appropriately monitored and acquitted to confirm that grant moneys were used in accordance with agreed terms for agreed purposes?
4. Has management assessed the effectiveness of its grants programs?
5. We conducted this across government benchmarking audit (AGBA) under section 18 of the Auditor General Act 2006 and in accordance with Australian Auditing and Assurance Standards. AGBAs assess and benchmark agencies against common business practices to identify good practices, and control weaknesses and exposures so that agencies, including those not audited, can compare their own performance.