Report from Secretary to Prime Minister's Department rejects Audit Office finding that sports grant program targeted marginal electorates

A report into the Federal Government’s controversial Community Sport Infrastructure Grant Program, conducted by Phil Gaetjens, Secretary to the Department of the Prime Minister and Cabinet, has rejected the Australian National Audit Office’s conclusion it was targeted at marginal and target seats.

In a submission delivered yesterday to the Senate inquiry into the sports grants saga, Gaetjens advised that while there were some “significant shortcomings” with respect to former Federal Sport Minister Bridget McKenzie’s handling of the grant program, her office’s separate approval processes were not unduly influenced by reference to “marginal” or “targeted” seats.

However, the report on which Gaetjens comments were made, conducted for Prime Minister Scott Morrison, has not been made been public.

The submission was Gaetjens’ first intervention in his own words since he was tasked with reporting on Senator McKenzie’s adherence to ministerial standards.

His report triggered Senator McKenzie’s resignation from her then role of Federal Agricultural Minister and Nationals deputy leader on 2nd February over a conflict of interest in one grant, but the government has blocked its release on the basis it is a confidential cabinet document.

In the submission, Gaetjens said McKenzie had “wide discretion” about the “other factors” she could consider and that she had “acted within the remit of the guidelines” when approving grants.

Gaetjens agreed with the Australian National Audit Office that there were “significant shortcomings” with her decision-making role, agreeing that Senator McKenzie’s office had undertaken “a separate and non-transparent process in addition to the assessment by Sport Australia”.

He advised “key among these were the lack of transparency for applicants around the other factors being considered, and the disconnect between the assessment process run by Sport Australia and the assessment and decision-making process in the minister’s office.

“This lack of transparency, coupled with the significant divergences between projects recommended by Sport Australia and those approved by the minister have given rise to concerns about the funding decision-making.”

Gaetjens cast doubt on the conclusion that a spreadsheet generated in November 2018 that was colour-coded by electorate and party was the basis of Senator McKenzie’s decisions, noting that decisions were made months later in three rounds in December 2018, February 2019 and April 2019, and that 30% of projects labelled “successful” on that sheet were not funded.

He said this evidence “does not accord” with the ANAO’s conclusion that Senator McKenzie’s office had focused on marginal and target electorates, adding “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.”

On Thursday, ANAO officials told the first sports grants inquiry hearing that Senator McKenzie was not interviewed and did not formally respond to its draft report when asked for comment.

Gaetjens said 32% of proposed projects in marginal or target seats were ultimately approved, compared with 36% in other electorates. He noted that 180 marginal or targeted projects were recommended by Sport Australia, and 229 were ultimately approved by the minister, representing a 27% increase, but the number of projects funded in non-marginal non-target seats also increased from 325 to 451, or 39%.

Prime Minister Scott Morrison had previously advised on more than a dozen occasions said all the grants were eligible, but the Senate inquiry heard this week from the auditor general that 43% were not.

Images: Phil Gaetjens, Secretary to the Department of the Prime Minister and Cabinet (top) and the Vaucluse Amateur 12" Sailing Club received $50,000 from the Community Sport Infrastructure Grant Program (below, Vaucluse Amateur Sailing Club/Facebook).