Emergency grants to NSW Councils after the 2022 floods have come under scrutiny by the state’s government oversight body.
And the verdict? The Office of Local Government (OLG), who administrated the funds, have been found to have not documented ‘fraud controls, nor processes, to manage conflicts of interests’, as well as not documenting ‘the reasons for all eligibility decisions’.
The findings were published in the NSW Audit Office’s performance audit for March 31.
Of note was that while mandatory requirements were met, ‘The OLG and the Reconstruction Authority (RA) have not defined their respective roles and responsibilities under the program’.
‘This has limited accountability for some aspects of grants administration and impacted timely Program delivery’, the report says.
There was also ‘no clear plan to finalise the program’.
‘The OLG has approved a detailed program of works for 37 councils. This is yet to occur for 9 councils. The OLG has not yet confirmed final reporting and acquittal processes for the program’.
Additionally, the Audit Office says some of the monitoring and reporting requirements were not implemented.
They say, ‘The OLG collects quarterly financial progress reports from councils. However, the OLG has not implemented Program Guideline requirements relating to the establishment of performance measures and monitoring of project outcomes by local councils’.
Long timeframes for assessing projects
‘Based on sample documentation, the OLG project eligibility assessment processing times are long, with most taking more than six months. Long processing times increase the risk of ineligible expenditure and councils being unable to complete projects by the Program completion date’.
‘The OLG has advised that factors contributing to the timeliness of its eligibility assessments include resourcing, the volume of projects needing to be assessed, the time taken to interpret eligibility requirements in consultation with the Reconstruction Authority, and council engagement’.
Recommendations
‘Three recommendations were made for the OLG to improve practices in line with the Grants Administration Guide. One recommendation was made for the OLG and the NSW Reconstruction Authority to improve clarity of roles and responsibilities’.
‘By June 2026, the Office of Local Government within the Department of Planning, Housing and Infrastructure should:
1. review conflicts of interest and fraud management processes for this and other grant programs to ensure that they are in line with the requirements of the Grants Administration Guide and departmental policies
2. develop and implement a plan to finalise the administration of funding under the Program, including monitoring and acquitting grants, in line with requirements of the Grants Administration Guide and the Program Guideline
3. apply lessons learned from evaluations of this Program to future grants programs.
By June 2026, the NSW Reconstruction Authority and the Office of Local Government within the Department of Planning, Housing and Infrastructure should:
4. agree and document respective roles and responsibilities for administering the Program, including responsibilities for monitoring and acquitting the Program’.
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