A controversial $252m New South Wales government grant program “lacked integrity” and did not use any consistent guidelines in awarding more than 95% of the money to local councils in Coalition state seats.
A scathing report on the scandal-plagued Stronger Communities Fund, released by NSW auditor general, Margaret Crawford, on Tuesday revealed former premier Gladys Berejiklian and deputy premier John Barilaro personally chose projects for the fund with “little or no information about the basis” for their selections.
The auditor’s findings also confirmed the government had never published program guidelines and instead favoured local councils that had “worked constructively” with them in the past over council mergers.
On the same day that Crawford’s report was released, the Sydney Morning Herald reported that more than 75% of a separate $100m gambling revenue grant program was given to Coalition-held and battleground seats over a decade.
Responding to the Stronger Communities Fund grants made in 2019, in the leadup to the state election, the auditor general found a lack of formal systems in place “prevent(ed) accountability and transparency over the government’s approach to selecting councils for funding”.
“Councils and projects were instead identified by the former premier, deputy premier and minister for local government and communicated to (the Office of Local Government) with little or no information about the basis for the council or project selection,” the report read.
“There was no merit assessment of identified projects. This process resulted in 96 per cent of funds allocated to Coalition state seats.”
The report found the only records kept of the approved grants made to 22 councils were found in a series of emails from the staff of both Berejiklian and Barilaro.
That was interpreted in a briefing note to Berejiklian as councils that “did not take legal action against us”.
The audit found Berejiklian personally identified 41 projects for funding, valued at $142m while Barilaro selected 188 projects totalling $61m.
First announced in 2016, program guidelines for the Stronger Communities Fund, developed by the Office of Local Government, were found to be “deficient” in a number of areas, yet were still not used to guide funding selections, Crawford found. She pointed to $8m in funds which were earmarked before guidelines were approved.
“It is difficult to understand the merit of project funding decisions, and it is troubling that the Office of Local Government did not seek justification to support projects put forward with limited documentation by the staff of the then premier, deputy premier and minister for local government,” the auditor stated.
The auditor’s report comes after a NSW parliament inquiry last year found the fund had been deliberately designed to allow pork-barrelling, and to punish councils which had opposed the government’s controversial local council mergers.
Inner West mayor, Darcy Byrne, is calling for his council and others that missed out to be compensated.
“The Stronger Communities Fund was established to support forcibly amalgamated councils like the Inner West and Canterbury-Bankstown with local infrastructure, but we were improperly prevented from even applying for funds,” he said.
“We still desperately need financial assistance for infrastructure, and the premier should stand up today and commit to working with us on a compensation fund.
“It’s time now to act and show that he (Perrottet) is the premier for all of NSW not just blue-ribbon Liberal electorates.”
Shadow special minister of state, John Graham, called on the state government to tighten regulations for grants.
“This confirms all the worst fears that the public would have had about these schemes,” he said.
“Most concerningly, this could happen again.”
The auditor general’s report also examined the $100m Regional Cultural Fund, finding that while it was “robust and produced transparent and defensible recommendations” for the then arts minister, Don Harwin, he and Barilaro did not follow the recommendations in more than a fifth of cases.
“Reasons for these changes were not documented by Create NSW,” the report found.
Crawford found the “integrity of the approval process for funding allocations was compromised” because Harwin and Barilaro “did not follow the recommendations” in multiple cases and did not document the reason for the changes.
“The then minister for the arts, in consultation with the former deputy premier, did not follow the panel’s recommendations for 22 per cent, or more than one in five, of the applications assessed for funding,” the report stated.
“Thirty-four applications that were recommended by the independent panel did not receive any funding. In the second funding round, seven of the top 10 ranked applications were not funded.
“The minister for the arts approved funding for 22 applications that were not recommended by the independent panel. This resulted in around $9.3m being awarded to applicants that were not rated highest by the independent panel, including six applicants that received grants of $500,000 or more. Most did not meet one or more assessment criteria and received low ratings.”
On Tuesday, the Herald reported how about $75m of the $103m raised from poker machine taxes was then spent in Coalition electorates between 2013 and 2021.
In response to the revelations NSW premier, Dominic Perrottet, highlighted the positive impact of grants programs and said all ministers were aware of their responsibilities.
“Grants are important. People criticise grant programs - I’ve seen on my visits to regional NSW - a number of playgrounds and netball courts that never would have been built without grants,” he said.
“There is zero tolerance for pork barrelling. I’ve made it abundantly clear to every one of my ministers that they are responsible for those grant programs.”
