Former NSW deputy premier John Barilaro's office effectively excluded Labor electorates from urgent bushfire recovery funding in an "inconsistent and poorly documented" Black Summer grants program.
A report by the NSW Auditor-General Margaret Crawford revealed that though there was no designated role for the then National Party leader in handing out the grants, his office implemented a $1 million threshold for bushfire recovery projects, denying funding for anything less than that amount.
The Department of Regional NSW gave the then deputy premier's office a list of 35 projects to be funded in a fast-tracked first round in 2020, listing their electorates, but the threshold ruled out projects in areas held by the Labor Party, the audit found.
The report said it was unclear why the department listed the electorates as they did not form part of the selection process and that Mr Barilaro's office's role in implementing a threshold "deviated from the guidelines".
The $541.8 million Bushfire Local Economic Recovery program was jointly funded by the state and federal governments and administered by NSW to pay for projects in bushfire-ravaged communities to help create jobs and protect against future disasters.
The report described the fast-tracked first round of the economic recovery program as having "significant gaps".
"The administration process lacked integrity, given it did not have sufficiently detailed guidelines, and the assessment process for projects lacked transparency and consistency," said the report, tabled in NSW parliament on Thursday.
The report noted that most of the heavily-impacted regions were held by Coalition MPs, but badly-ravaged regions including the Blue Mountains and Tenterfield were among those excluded from the urgent funding.
The department told the auditor-general's office projects in some of those rejected regions were funded either in later rounds of the economic recovery program or by the Commonwealth.
"It is also noted that the overwhelming majority of bushfire impact was in government-held electorates and therefore the majority of funding in early fast-tracked rounds would flow to those communities," department secretary Rebecca Fox told the auditor-general.
That aligned with the national Local Economic Recovery Fund criteria of "balance and need", Ms Fox said.
The auditor-general's report said other rounds of bushfire grants largely aligned with guidelines and were supported by documentation but could have been strengthened by more detail on cost-benefit analysis.
