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Independent News For The Australian Public Service
Edition Number 406. Updated Tuesday, 22 April 2014

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Cracks in building regional cities program

Management of a grants program to supply affordable housing to low-income households in regional areas has failed an audit investigation.

In his report Management of the Building Better Regional Cities Program, Auditor-General, Ian McPhee found the program had been implemented in a way that gave insufficient attention to its objective, its key performance target or its guidelines and had not achieved value for money for the taxpayer.

The audit assessed the effectiveness of the design and conduct of the funding round for BBRC, reflecting policy and legislative requirements, including the Commonwealth Grant Guidelines (CGGs) and the Better Practice Guide.

The Auditor found the Program performed poorly in terms of delivering the benefits envisaged when the Program was announced, "both in relation to the amount of new affordable housing being delivered and the extent of benefits being passed onto purchasers".

Some 17 grants totalling $113.8 million were awarded, of which three did not proceed to contract or were no longer under contract, and were replaced by two other projects.

Audit finds lack of value for money

Five applications not recommended by the Department of Social Services but approved by the Minister had been assessed as offering 'marginal' value for money and had also been assessed as not adequately meeting at least two (and in one instance, each) of the five merit criteria.

All but four of the approved applications were assessed "to have not adequately met at least one of the published merit criteria", Mr McPhee said.

Implementation gave insufficient attention to the Program's objective, the related key performance target, the Program guidelines and the importance of achieving value for money, he said.

"Rather, emphasis was given to spending the Program's $100 million budget," Mr McPhee said.

This situation was compounded when it was decided to apply unpublished eligibility criteria which denied funding to some of the better credentialed applications.

Also, there had been project delays with only eight of the contracted projects on track to deliver by the original Program deadline of 31 March 2014, Mr McPhee said.

The 16 projects currently contracted under the Program are required to deliver nearly 3000 subsidised lots/dwellings in 15 regional cities, across four States.

Announced in July 2010, the Program aimed to "help build up to 15,000 more affordable homes in regional cities over three years" by investing in local infrastructure projects.

Its funding was halved in the May 2011 Budget, reducing the target to 8,000 homes.

Both of the ANAO's recommendations relate to the Department of Social Services increasing its focus on pursuing value for money outcomes.

The audit team was Michelle Mant, Amanda Ronald and Brian Boyd.

The full report can be accessed at this PS News link.

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