Report 13

Royalties for Regions – are benefits being realised?

Auditor General’s Overview

Royalties for Regions (RfR) was launched by the State Government in December 2008 with the broad aim of building sustainability in the regions by providing infrastructure and services, broadening their economic base and maximising job creation. Responsibility for managing this very important program rests with the Department of Regional Development.

The level of RfR investment has been considerable. At the time of our audit, $4.2 billion had been allocated to over 3 500 projects across regional areas. Where these funds are spent is a matter for government rather than audit. However, with this level of investment, there is understandable expectation on government to demonstrate that the funds have delivered benefits to regional communities in line with the RfR objectives.

In our two previous audits of RfR, we looked at the governance arrangements that were established for allocating the moneys and then whether local governments were spending the project moneys they received in accordance with funding arrangements. In this audit we evaluated 16 RfR projects to determine whether they delivered their intended outcomes.

While it is evident that RfR is delivering infrastructure and services to the regions, the outcomes and benefits these projects intended to deliver was not always clear. This leads me to believe that projects are still being funded for the delivery of a physical product which is not consistent with the Department’s own outcomes based approach to funding or with the program’s objectives.

Ultimate success of the program will be determined not only on whether individual projects and the program deliver tangible outputs, but also on whether RfR provided long lasting benefits to regional communities.

The audit also left us with some concerns about the extent that projects were funded without long term viability being a key consideration and that project evaluations were focusing on what had been done rather than on whether the desired outcomes were achieved.

While it is apparent that further work is needed before the public can have full confidence in the management of the RfR program, I was pleased to see ongoing improvements to the way the program is being managed. It goes without saying that I will continue to take a keen interest in the RfR program.

Page last updated: June 25, 2014

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