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Did the Audit Office Overreach?

In response to a request from Labor’s Shadow Attorney General, Mark Dreyfus, the Australian National Audit Office conducted an audit of a sports grants program conducted by the then sports minister Bridget McKenzie. The report made recommendations about the grants process, as conducted by Senator McKenzie, all of which were adopted by the Government.

The report also made some additional ‘scathing’ findings that the allocation of the grants was driven by political motives and favoured marginal seats that were held by the Coalition or were targets at the last election.

The Prime Minister asked the head of his department Mr Phil Gaetjens to establish whether Senator McKenzie had breached the ministerial code of conduct guidelines. Mr Gaetjens found that Senator McKenzie had indeed breached the guidelines by failing to disclose a conflict of interest but that there was no evidence of political bias. The Gaetjens report was designated as ‘cabinet in confidence’ so was not released to the public or the Parliament.

The failure to make the report public has caused political turmoil. Senator Jacqui Lambie has announced that she will hold up government legislation until it is released. Senator Rex Patrick claims that he will obtain copies of the report through a freedom of information request. In a ridiculous move the Labor leader, Senator Penny Wong, tried to have the Government leader in the Senate, Mathias Cormann, sent to the sin bin for failing to produce the report in the chamber.

In response to this kerfuffle, Mr Gaetjens has made a submission to the Senate inquiry into the sports rorts affair which sets out the salient points of his report.

He rejects the Audit-Generals claim that Senator McKenzie’s approach was based on the much talked about spreadsheet of November 2018 that was colour coded according to party, and says she told him she had never seen that spreadsheet (the Audit Office claims there were 18 versions of the spreadsheet).

“The ANAO Report … asserts that the Adviser’s spreadsheet is evidence that ‘the Minister’s Office had documented the approach that would be adopted to selecting successful applicants’ before funding decisions were made. However, there is persuasive data that backs up the conclusion that the Minister’s decisions to approve grants were not based on the Adviser’s spreadsheet,” Gaetjens writes.

The evidence included the significant length of time between the spreadsheet and the approvals. Also, 30% of the applications listed as successful on the adviser’s spreadsheet did not get funding approval .

“So, on the evidence available to me, there is a material divergence between actual outcomes of all funded projects and the approach identified in the Adviser’s spreadsheet. This does not accord with the ANAO Report”, which found funding reflected the political approach documented by McKenzie’s office.

Gaetjens says had McKenzie just followed Sport Australia’s initial list, 30 electorates would have got no grants. In the final wash up only five missed out (no applications had come from three of them).

“I did not find evidence that the separate funding approval process conducted in the Minister’s office was unduly influenced by reference to ‘marginal’ or ‘targeted’ electorates. Evidence provided to me indicated that the Adviser’s spreadsheet was developed by one member of staff in the Minister’s Office, using information provided by Sport Australia in September 2018, as a worksheet to support an increase in funding for the Program.

"Senator McKenzie advised me in response to a direct question that she had never seen the Adviser’s spreadsheet and that neither she nor her staff based their assessments on it.

"Her Chief of Staff also told the Department of the Prime Minster and Cabinet that the Adviser had categorically stated she had not shown the spreadsheet to the Minister.”

Rejecting the Audit Office conclusion of a bias to marginal and targeted seats, Gaetjens says “180 ‘marginal’ and ‘targeted’ projects were recommended by Sport Australia, and 229 were ultimately approved by the Minister, representing a 27 per cent increase. This is smaller than the percentage increase of projects recommended (325) to projects funded (451) in non-marginal or non-targeted seats which was 39 per cent.”

“The evidence I have reviewed does not support the suggestion that political considerations were the primary determining factor in the Minister’s decisions to approve the grants”. So he had concluded she did not breach the section of the ministerial standard requiring fairness, Gaetjens writes.

At the moment the audit office report is accepted as the ‘gospel truth’ however there are good reasons to believe the ANAO has over-reached in its allegations of political bias.

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