Audit Office misses the point on RLCIP

The Australian National Audit Office (ANAO) released its audit of the Strategic Projects Component of the Regional and Local community Infrastructure Program (RLCIP) on 27 July.

The report raises some procedural issues around how the ‘strategic projects’ funding stream of the project was allocated to councils by the Federal Department of Infrastructure, Transport, Regional Development and Local Government.

The total value of grants under this element of the RLCIP was $550 million, with 137 projects from 484 applications funded.

The Audit examined the process of obtaining bids from councils, their assessment and advice to the Minister, and the administration of approved projects by both the Department and councils receiving the grants.

While the Department has agreed to all five recommendations on how the administrative processes could be improved, it has reacted strongly to the Report, noting that in its view the Audit Office findings were not a balanced perspective of the Program.

According to the Department, the findings did not examine the community benefits of the projects, nor did they take into account the context of the Global Economic Crisis and that the Program was part of an immediate economic stimulus package.

The part of the Audit report that attracted the media’s attention related to ANAO’s analysis of the distribution of the funds by electorate.

The ANAO analysis found that:

  • the ALP with 55 per cent of electorates received 57 per cent of the funding
  • the Coalition with 43 per cent of electorates received 37 per cent of funding
  • Independents with two per cent of electorates received six per cent of funding.

The ANAO analysis of applications for project funding found that 55 per cent of applications came from Coalition electorates, of which, 18.4 per cent were approved, while just under 60 per cent of applications from ALP electorates were approved.

The Department’s response to this was that it did not take into account “clear Government decisions to give preference to larger, more capable councils serving larger populations. The final selection of projects represents an equitable distribution across jurisdictions and electorates, and provides funding to 137 councils which cover more than 12 million Australians”.

President of the Australian Local Government Association (ALGA), Councillor Geoff Lake, has expressed his dismay at the lack of balance and objectivity in the report.

“We don’t feel that the Audit Office has properly grasped or understood the environment in which councils operate,” Councillor Lake said. “They have been quick to reach opinions about the performance of councils and the management of the program, which we don’t think are fair or reasonably based.

“This is an important national program that has delivered thousands of projects to local communities across Australia and has helped to sustain local employment through the Global Financial Crisis.

“It is fundamentally wrong to suggest or insinuate that funds have been misused, politically directed or wasted.

“We’re disappointed that the report concentrated on fairly semantic process detail, while ignoring any consideration of the wider economic benefits flowing from the program’s investment at the local level throughout the country.

“Every single day, Australia’s 565 councils are doing great things with limited funding to deliver key services to local communities.

“The RLCIP was a great initiative to boost community infrastructure at the local level, while providing important stimulus through an uncertain period for Australia.”