‘Significant fraud’ surrounds govt grants

Report finds Ballina one of three electorates to miss out on bushfire funding

The Ballina electorate (encompassing Byron Shire) is among three electorates that were denied bushfire recovery funds, despite suffering damage of $4.2m, according to a committee report released on Friday.

The final report into Government Grants by the NSW Parliament’s Public Accountability Committee also made extraordinary claims of ‘significant fraud’ around the process that allocates funds to electorates.

Chair of the commiteee, David Shoebridge (Greens) said, ‘The NSW coalition government has repeatedly used public money for political gain and the system remains open to widespread abuse in the leadup to next year’s election’.

Greens MP and Member for Ballina Tamara Smith said, ‘Communities on the North Coast were left reeling after bushfires destroyed homes, businesses and livelihoods, it is impossible to understand how politics got in the way of help’.

‘This report shines a spotlight on the way the Liberal-National government is willing to use public money, even in an emergency, for their own ends.

‘The people of Ballina deserve so much more from their government. 

‘I am committed to making these reforms law so that those members of our community still struggling can get the help they desperately need, regardless of their politics’, Ms Smith said.

Service NSW replies

Service NSW, who say  they have so far administered $12.5 billion in financial support for disasters, including the 2019-2020 bushfires, NSW floods and the COVID-19 pandemic, were singled out as having inadequate checks and balances in place.

On page 38 of the report, the committee says, ‘[There is] no sense of a competent or capable fraud detection ability in Service NSW and very little confidence that the scale of fraud that has been announced by the government to date truly reflects what happened’.

A recommendation in the report suggests that ‘the current level of fraud, both paid and unpaid, is thoroughly investigated and money recovered’; and that, ‘capable and resilient fraud control measures and identification systems are put in place to detect fraud on future grant programs and retrospectively as a matter of urgency’.

The Echo asked Service NSW whether they will undertake the recommendations as described in the report.

A spokesperson for Service NSW replied, ‘Financial support needed to be delivered quickly to help protect jobs and businesses across NSW which were at risk of closing owing to economic hardship.

‘The work that Service NSW has done to improve its management of grants has addressed the Committee’s recommendations’.

‘This work is ongoing, with further improvements planned throughout 2022. 

‘Service NSW takes fraud seriously and has fraud teams dedicated to assessing fraud risk and building fraud prevention measures into grants products’.

Fraud control staffed by one person

Remarkably, the report found that the ‘only fraud control in place was one employee with an Excel spreadsheet trying to identify connections for millions of dollars in payments made under these grants programs’.

‘Even more surprising is that the recommendations made by the company, who was brought in to assist with assessing the fraud exposure… were not taken up’.

Additionally, the criteria or guidelines for councils applying for grants were inadequate, the report says.

‘Some local councils were at an advantage as they had previously submitted projects through Regional Growth Fund programs, and were in close contact with departments through regional recovery committees. Other councils, such as Blue Mountains and the Central Coast, were disadvantaged as they did not have the same level of support and ultimately did not receive funding.

‘Despite not informing councils of eligibility criteria, the Department of Regional NSW applied its own internal criteria to narrow down the list of potential projects. The internal criteria were then applied inconsistently.

‘A few projects were simply cherry-picked for funding. This meant many worthy projects in areas heavily-impacted by bushfires, like the Blue Mountains, were not funded, while other projects that were not supported by local communities, were’.

Former NSW Nationals leader, John Barilaro, was vocal in his support of ‘pork barrelling’ electorates for political gains. The Guardian reported last week he has since taken a job with a wealthy property developer.