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Auditor-General Audit reports for 2012-13 No. 43 Performance audit Establishment, implementation and administration of the general component of the Local Jobs stream of the Jobs Fund: Department of Education, Employment and Workplace Relations


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T h e A u d i t o r - G e n e r a l

Audit Report No.43 2012-13 Performance Audit

Establishment, Implementation and Administration of the General Component of the Local Jobs Stream of the Jobs Fund

Department of Education, Employment and Workplace Relations

A u s t r a l i a n N a t i o n a l A u d i t O f f i c e

 

ANAO Audit Report No.43 2012-13 Establishment, Implementation and Administration of the General Component of the Local Jobs Stream of the Jobs Fund

2

   

© Commonwealth of Australia 2013 

ISSN 1036-7632 ISBN 0 642 81357 4 (Print)  ISBN 0 642 81358 2 (On‐line) 

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Australian National Audit Office for use under the terms of a

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Executive Director Corporate Management Branch Australian National Audit Office 19 National Circuit BARTON ACT 2600

Or via email: webmaster@anao.gov.au

 

   

 

ANAO Audit Report No.43 2012-13 Establishment, Implementation and Administration of the General Component of the Local Jobs Stream of the Jobs Fund

2

   

© Commonwealth of Australia 2013 

ISSN 1036-7632 ISBN 0 642 81357 4 (Print)  ISBN 0 642 81358 2 (On‐line) 

Except for the content in this document supplied by third parties, the Australian National Audit Office logo, the Commonwealth Coat of Arms, and any material protected by a trade mark, this document is licensed by the

Australian National Audit Office for use under the terms of a

Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 Australia licence. To view a copy of this licence, visit http://creativecommons.org/licenses/by-nc-nd/3.0/au/

You are free to copy and communicate the document in its current form for non-commercial purposes, as long as you attribute the document to the Australian National Audit Office and abide by the other licence terms. You may not alter or adapt the work in any way.

Permission to use material for which the copyright is owned by a third party must be sought from the relevant copyright owner. As far as practicable, such material will be clearly labelled.

For terms of use of the Commonwealth Coat of Arms, visit It’s an Honour at http://www.itsanhonour.gov.au/coat-arms/index.cfm.

Requests and inquiries concerning reproduction and rights should be addressed to:

Executive Director Corporate Management Branch Australian National Audit Office 19 National Circuit BARTON ACT 2600

Or via email: webmaster@anao.gov.au

 

   

 

ANAO Audit Report No.43 2012-13

Establishment, Implementation and Administration of the General Component of the Local Jobs Stream of the Jobs Fund

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Canberra ACT 12 June 2013

Dear Mr President Dear Madam Speaker

The Australian National Audit Office has undertaken an independent performance audit in the Department of Education, Employment and Workplace Relations in accordance with the authority contained in the Auditor-General Act 1997. Pursuant to Senate Standing Order 166 relating to the presentation of documents when the Senate is not sitting, I present the report of this audit to the Parliament. The report is titled Establishment, Implementation and Administration of the General Component of the Local Jobs Stream of the Jobs Fund.

Following its presentation and receipt, the report will be placed on the Australian National Audit Office’s Homepage—http://www.anao.gov.au.

Yours sincerely

Ian McPhee Auditor-General

The Honourable the President of the Senate The Honourable the Speaker of the House of Representatives Parliament House Canberra ACT

ANAO Audit Report No.43 2012-13 Establishment, Implementation and Administration of the General Component of the Local Jobs Stream of the Jobs Fund

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AUDITING FOR AUSTRALIA

The Auditor-General is head of the Australian National Audit Office (ANAO). The ANAO assists the Auditor-General to carry out his duties under the Auditor-General Act 1997 to undertake performance audits, financial statement audits and assurance reviews of Commonwealth public sector bodies and to provide independent reports and advice for the Parliament, the Australian Government and the community. The aim is to improve Commonwealth public sector administration and accountability.

For further information contact: The Publications Manager Australian National Audit Office GPO Box 707 Canberra ACT 2601

Telephone: (02) 6203 7505 Fax: (02) 6203 7519

Email: webmaster@anao.gov.au

ANAO audit reports and information about the ANAO are available at our internet address:

http://www.anao.gov.au

Audit Team Tina Long Amanda Ronald Brian Boyd

 

   

ANAO Audit Report No.43 2012-13

Establishment, Implementation and Administration of the General Component of the Local Jobs Stream of the Jobs Fund

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Contents Abbreviations .................................................................................................................. 7 

Summary and Recommendations .............................................................................. 9 

Summary ...................................................................................................................... 10 

Introduction ............................................................................................................. 10 

Audit objectives, scope and criteria ........................................................................ 13 

Overall conclusion ................................................................................................... 13 

Key findings by chapter ........................................................................................... 16 

Agency response to the proposed audit report ....................................................... 24 

Recommendations ....................................................................................................... 26 

Audit Findings ............................................................................................................ 27 

1.  Introduction ............................................................................................................. 28 

Background ............................................................................................................. 28 

Administering agencies ........................................................................................... 30 

Program implementation ......................................................................................... 30 

Audit objective, scope and criteria .......................................................................... 35 

2.  Program Establishment ........................................................................................... 37 

Introduction ............................................................................................................. 37 

Establishing procedural documentation .................................................................. 37 

Clarity of roles and responsibilities ......................................................................... 40 

Receiving applications to the first funding round .................................................... 45 

Receiving applications to the second funding round .............................................. 52 

Conclusion .............................................................................................................. 55 

3.  First Round Selection Processes ............................................................................ 58 

Introduction ............................................................................................................. 58 

Assessing proposals against published selection criteria ....................................... 58 

Consideration of competing applications in tranches ............................................. 65 

Demonstrating projects’ overall relative merit ......................................................... 71 

Supplementary assessment processes .................................................................. 83 

Conclusion .............................................................................................................. 89 

4.  Second Round Selection Processes ....................................................................... 93 

Introduction ............................................................................................................. 93 

Assessing proposals against published selection criteria ....................................... 93 

ARC deliberations ................................................................................................... 99 

Consideration of geographical distribution ............................................................ 110 

Value for money deliberations .............................................................................. 117 

Supplementary approval of projects by the delegate ............................................ 121 

Conclusion ............................................................................................................ 124 

5.  Program Outcomes ............................................................................................... 127 

ANAO Audit Report No.43 2012-13 Establishment, Implementation and Administration of the General Component of the Local Jobs Stream of the Jobs Fund

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AUDITING FOR AUSTRALIA

The Auditor-General is head of the Australian National Audit Office (ANAO). The ANAO assists the Auditor-General to carry out his duties under the Auditor-General Act 1997 to undertake performance audits, financial statement audits and assurance reviews of Commonwealth public sector bodies and to provide independent reports and advice for the Parliament, the Australian Government and the community. The aim is to improve Commonwealth public sector administration and accountability.

For further information contact: The Publications Manager Australian National Audit Office GPO Box 707 Canberra ACT 2601

Telephone: (02) 6203 7505 Fax: (02) 6203 7519

Email: webmaster@anao.gov.au

ANAO audit reports and information about the ANAO are available at our internet address:

http://www.anao.gov.au

Audit Team Tina Long Amanda Ronald Brian Boyd

 

   

ANAO Audit Report No.43 2012-13 Establishment, Implementation and Administration of the General Component of the Local Jobs Stream of the Jobs Fund

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Introduction ........................................................................................................... 127 

Delivery of financial stimulus ................................................................................. 127 

Evaluation of program outcomes .......................................................................... 136 

Employment and training outcomes ...................................................................... 141 

Conclusion ............................................................................................................ 148 

Appendices ............................................................................................................... 151 

Appendix 1:  Program funding for the Jobs Fund streams administered by DEEWR ............................................................................................ 152 

Appendix 2:  Employment outcomes reporting required of DEEWR Jobs Fund funding recipients ............................................................................. 153 

Index ........................................................................................................................... 154 

Series Titles ................................................................................................................ 155 

Current Better Practice Guides .................................................................................. 160 

Tables

Table 3.1 Scoring methodology applied in the first funding round ..................... 59  Table 3.2 Preferred project characteristics listed in Round 1 Jobs Fund guidelines ........................................................................................... 60 

Table 3.3 Final scores allocated to projects assessed in first round as meeting all criteria to at least a minimum level and associated rates of approval ................................................................................. 74 

Table 3.4 Final eligible scores and rates of approval: in priority employment areas and non-priority employment areas ..................... 81  Table 4.1 Scoring methodology applied in the second funding round ............... 94  Table 4.2 Projects with a ‘pass’ assessment outcome and associated rates

of recommendation for approval ....................................................... 109 

Table 4.3 Examples of ARC reversal of earlier decisions to recommend projects ............................................................................................. 118 

Figures

Figure 1.1 Location of Priority Employment Areas .............................................. 29 

Figure 2.1 ARC Terms of Reference—Jobs Fund Round 1 ................................ 43 

Figure 5.1 Comparison of total contracted and actual quarterly payments for Local Jobs stream projects up to budgeted program end-date of June 2011 ..................................................................................... 131 

   

ANAO Audit Report No.43 2012-13 Establishment, Implementation and Administration of the General Component of the Local Jobs Stream of the Jobs Fund

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Introduction ........................................................................................................... 127 

Delivery of financial stimulus ................................................................................. 127 

Evaluation of program outcomes .......................................................................... 136 

Employment and training outcomes ...................................................................... 141 

Conclusion ............................................................................................................ 148 

Appendices ............................................................................................................... 151 

Appendix 1:  Program funding for the Jobs Fund streams administered by DEEWR ............................................................................................ 152 

Appendix 2:  Employment outcomes reporting required of DEEWR Jobs Fund funding recipients ............................................................................. 153 

Index ........................................................................................................................... 154 

Series Titles ................................................................................................................ 155 

Current Better Practice Guides .................................................................................. 160 

Tables

Table 3.1 Scoring methodology applied in the first funding round ..................... 59  Table 3.2 Preferred project characteristics listed in Round 1 Jobs Fund guidelines ........................................................................................... 60 

Table 3.3 Final scores allocated to projects assessed in first round as meeting all criteria to at least a minimum level and associated rates of approval ................................................................................. 74 

Table 3.4 Final eligible scores and rates of approval: in priority employment areas and non-priority employment areas ..................... 81  Table 4.1 Scoring methodology applied in the second funding round ............... 94  Table 4.2 Projects with a ‘pass’ assessment outcome and associated rates

of recommendation for approval ....................................................... 109 

Table 4.3 Examples of ARC reversal of earlier decisions to recommend projects ............................................................................................. 118 

Figures

Figure 1.1 Location of Priority Employment Areas .............................................. 29 

Figure 2.1 ARC Terms of Reference—Jobs Fund Round 1 ................................ 43 

Figure 5.1 Comparison of total contracted and actual quarterly payments for Local Jobs stream projects up to budgeted program end-date of June 2011 ..................................................................................... 131 

   

ANAO Audit Report No.43 2012-13

Establishment, Implementation and Administration of the General Component of the Local Jobs Stream of the Jobs Fund

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Abbreviations

ANAO  Australian National Audit Office 

ARC  Assessment Review Committee 

Bike path  component 

$40  million  of  Local  Jobs  stream  funding  that  was  quarantined for bike path projects.  

CGGs  Commonwealth Grant Guidelines 

Compact  Jobs and Training Compact 

DEEWR  Department  of  Education,  Employment  and  Workplace  Relations 

Delegate  Departmental official authorised by the relevant Minister to  perform the role of approver for the DEEWR‐administered  components of the Jobs Fund. 

DEWHA  The  former  Department  of  the  Environment,  Water,  Heritage and the Arts. In September 2010, this department  became  the  Department  of  Sustainability,  Environment,  Water,  Population  and  Communities  which  retained  responsibility  for  administering  approved  heritage  component projects. 

DITRDLG  The  former  Department  of  Infrastructure,  Transport,  Regional  Development  and  Local  Government.  Under  the  machinery  of  government  changes  that  took  effect  on  14 September 2010, this department became the Department  of Infrastructure and Transport (Infrastructure). 

FAQ  Jobs  Fund  Frequently  Asked  Questions  document 

published by DEEWR 

FMA  Regulations 

Financial Management and Accountability Regulations 1997 

FTE  Full time equivalent measure of employment. 

ANAO Audit Report No.43 2012-13 Establishment, Implementation and Administration of the General Component of the Local Jobs Stream of the Jobs Fund

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GCW  Get Communities Working stream of the Jobs Fund 

Heritage  component 

$60 million  of  Local  Jobs  stream  funding  that  was  quarantined for heritage projects. 

HIP  Home Insulation Program 

IEP  Infrastructure Employment Projects stream of the Jobs Fund 

JSA  Jobs Services Australia 

LEC  Local Employment Coordinator 

LJ  Local Jobs stream of the Jobs Fund 

PEA  Priority  Employment  Area:  20  priority  employment  areas  were  identified  between  April  and  July  2009  based  on  analysis undertaken by DEEWR of a range of labour market  indicators  in  order  to  identify  and  provide  assistance  to  those regions across Australia with labour markets likely to  experience disadvantage and deterioration as a result of the  global recession. 

SPBC  Strategic Priorities and Budget Committee of Cabinet 

 

ANAO Audit Report No.43 2012-13

Establishment, Implementation and Administration of the General Component of the Local Jobs Stream of the Jobs Fund

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Summary and Recommendations

ANAO Audit Report No.43 2012-13

Establishment, Implementation and Administration of the General Component of the Local Jobs Stream of the Jobs Fund

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Summary and Recommendations

ANAO Audit Report No.43 2012-13 Establishment, Implementation and Administration of the General Component of the Local Jobs Stream of the Jobs Fund

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Summary

Introduction 1. As part of its response to the global financial crisis, on 17 March 2009  the Government agreed to the establishment of an integrated $650 million Jobs  Fund,  consisting  of  three  streams.  The  $300 million  Local  Jobs  (LJ)  and  $200 million  Get  Communities  Working  (GCW)  streams  reflected  commitments made in the context of securing passage (on 13 February 2009) of  the $42 billion Nation Building and Jobs Plan legislation. The LJ stream was to  fund  community  infrastructure  projects  with  a  focus  on  the  promotion  of  environment‐friendly technology and heritage, and comprised a $200 million  general component and two quarantined components ($60 million for heritage  projects and $40 million for bike paths).1 In line with the stimulus objectives of  the Jobs Fund, all three streams were to be completed by 30 June 2011.2 

2. The  Jobs  Fund  formed  one  of  two  major  initiatives  under  the  ‘local  communities’ element of the Jobs and Training Compact announced by the  Government in April 2009. The other major initiative was the engagement of  Local  Employment  Coordinators  in  20 Priority  Employment  Areas  (PEAs).  These had been identified based on analysis by the Department of Education,  Employment and Workplace Relations (DEEWR) of a range of labo ur market  indicators to identify those regions across Australia with labour markets likely  to experience disadvantage and deterioration as a result of the global recession. 

3. DEEWR was the lead agency for the Jobs Fund and was responsible for  administering the GCW stream and the general component of the LJ stream.  Ministers  agreed  to  a  DEEWR  official  undertaking  the  role  of  approver  for  both rounds of those Jobs Fund components. For the first round, DEEWR was  also responsible for allocating applications to the most appropriate stream or  component  for  assessment  (including  those  administered  by  other  departments). 

                                                       1 The GCW stream was for self-sustaining projects which created jobs and provided activities and services to improve community amenity. Projects under the $150 million Infrastructure Employment Projects (IEP) stream were to be

initiated by the Australian Government. 2 The quarantined components of the LJ stream were to be completed by 30 June 2010.

ANAO Audit Report No.43 2012-13 Establishment, Implementation and Administration of the General Component of the Local Jobs Stream of the Jobs Fund

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Summary

Introduction 1. As part of its response to the global financial crisis, on 17 March 2009  the Government agreed to the establishment of an integrated $650 million Jobs  Fund,  consisting  of  three  streams.  The  $300 million  Local  Jobs  (LJ)  and  $200 million  Get  Communities  Working  (GCW)  streams  reflected  commitments made in the context of securing passage (on 13 February 2009) of  the $42 billion Nation Building and Jobs Plan legislation. The LJ stream was to  fund  community  infrastructure  projects  with  a  focus  on  the  promotion  of  environment‐friendly technology and heritage, and comprised a $200 million  general component and two quarantined components ($60 million for heritage  projects and $40 million for bike paths).1 In line with the stimulus objectives of  the Jobs Fund, all three streams were to be completed by 30 June 2011.2 

2. The  Jobs  Fund  formed  one  of  two  major  initiatives  under  the  ‘local  communities’ element of the Jobs and Training Compact announced by the  Government in April 2009. The other major initiative was the engagement of  Local  Employment  Coordinators  in  20 Priority  Employment  Areas  (PEAs).  These had been identified based o n analysis by the Department of Education,  Employment and Workplace Relations (DEEWR) of a range of labour market  indicators to identify those regions across Australia with labour markets likely  to experience disadvantage and deterioration as a result of the global recession. 

3. DEEWR was the lead agency for the Jobs Fund and was responsible for  administering the GCW stream and the general component of the LJ stream.  Ministers  agreed  to  a  DEEWR  official  undertaking  the  role  of  approver  for  both rounds of those Jobs Fund components. For the first round, DEEWR was  also responsible for allocating applications to the most appropriate stream or  component  for  assessment  (including  those  administered  by  other  departments). 

                                                       1 The GCW stream was for self-sustaining projects which created jobs and provided activities and services to improve community amenity. Projects under the $150 million Infrastructure Employment Projects (IEP) stream were to be

initiated by the Australian Government. 2 The quarantined components of the LJ stream were to be completed by 30 June 2010.

Summary

ANAO Audit Report No.43 2012-13

Establishment, Implementation and Administration of the General Component of the Local Jobs Stream of the Jobs Fund

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First funding round

4. The Jobs Fund guidelines published in April 2009 stipulated that, to be  considered under any of the three streams, projects needed to address at least  one of four target areas3, and meet each of three gateway criteria that reflected  the employment stimulus objective of the Fund. Specifically: 

 projects  must  be  in  areas  experiencing  high  unemployment,  a significant rise in unemployment or vulnerability; 

 projects must be viable and ready to start; and 

 funding would not extend past 30 June 2011. 

5. On  18  April  2009,  a  total  of  $100 million  was  announced  as  being  available under the first round of the LJ and GCW streams, which closed to  applications on 22 May 2009.4 Of the more than 2600 applications received,  over 1600 applications seeking nearly $1.5 billion were considered under the  two DEEWR‐administered components. Applications were assessed through a  single process, and allocated between the two streams as part of that process.  The  selection  process  was  completed  in  August  2009,  with  $132.3 million5  being  approved  in  three  tranches  for  173  projects  ($50.1 million  for  64 LJ projects  and  $8 2.2 million  for  109 GCW  projects).  By  December  2009,  three GCW projects had been withdrawn, with that funding being used by  DEEWR to approve $1.75 million for eight bike path projects under the general  component of the LJ stream in January 2010.6 

Re-targeting of the Jobs Fund

6. In June 2009, the Government commenced development of a whole of  government strategy to build on existing initiatives to support Australian jobs,  entitled  ‘Keep  Australia  Working’.  On  30  September  2009,  a  number  of  measures  identified  through  the  development  of  the  final  Keep  Australia  Working report were agreed to by government. This included re‐targeting of  the remaining Jobs Fund funds, then identified as totalling $242.8 million. 

                                                       3 The four target areas were: create jobs or retain people in jobs at risk due to the downturn; build skills for the future; build community infrastructure or improve community amenity which generates local jobs; and provide seed funding for

social enterprises to start up, maintain or expand services, generating jobs and improving community services. 4 A further $100 million relating to the two quarantined components of the LJ stream was also allocated through the first round, and $11 million of GCW stream funding was allocated for Temporary Financial Assistance grants that were also

able to be applied for under the first call for proposals. 5 In August 2009, first round funding was increased to up to $140 million (see paragraphs 3.35 to 3.38). 6

This issue is discussed further at paragraphs 2.30 to 2.34 and 3.75 to 3.83.

ANAO Audit Report No.43 2012-13 Establishment, Implementation and Administration of the General Component of the Local Jobs Stream of the Jobs Fund

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7. The Government agreed to allocate a total of $93.3 million to a second  public call for the Jobs Fund ($51.9 million under LJ and $41.4 million under  GCW),  and  that  tighter,  separate  guidelines  would  be  developed  for  both  streams. The remaining funding was re‐allocated to a number of other targeted  employment  initiatives,  and  to  support  the  Australian  Government  contribution to the Victorian bushfire recovery. 

Second funding round

8. The second call for applications was announced on 5 November 2009.  Revised program guidelines stated that, in the second round, the LJ stream  would  focus  on  the  creation  of  green  jobs,  development  of  green  skills,  promotion  of  energy  efficient  infrastructure  and  development  of  skills  in  future green industries. The GCW stream was to focus on projects to build  community capacity, improve community strength and amenity and provide  opportunities  for  disadvantaged  job  seekers,  thereby  creating  jobs  and  opportunities in communities affected by the global recession. 

9. The second round was again heavily subscribed, with 970 applications  seeking $890.6 million being received by the closing date of 11 December 2009  (365 LJ applications seeking $331.3 million and 605 GCW applications  seeking  $559.3 million). In February 2010, a further $11.5 million was re‐allocated from  the Jobs Fund for the Government’s Insulation Worker Adjustment package.  The second round was completed in March 2010, with 53 projects (five per cent  of  applications)  being  approved  for  amounts  totalling  $39 million  ($17.5 million  for  21 LJ  projects  and  $21.5 million  for  32 GCW  projects),  representing a significant under‐allocation compared to the available funding. 

Program closure

10. In  the  2010-11  Budget,  the  Government  announced  that:  ‘in  light  of  revised growth forecasts for the national economy, the need for funding in the  Local  Jobs  and  the  Get  Communities  Working  streams  has  diminished.’  Funding for the Jobs Fund was reduced by $48.6 million over two years from  2009-10. Of the $193 million originally available under each of the Jobs Fund  components administered by DEEWR, $69.3 million (36 per cent) was awarded  under  LJ,  and  $112.6 million  (58 per  cent)  was  awarded  under  GCW.  The remainder was reallocated to other measures or returned to the Budget. 

11. As noted, funding for Jobs Fund projects administered by DEEWR was  originally budgeted to end on 30 June 2011. However, to allow certain projects  that had experienced delays to receive fu nding in the 2011-12 financial year 

Summary

ANAO Audit Report No.43 2012-13

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(including five of the 92 contracted LJ projects), the Jobs Fund guidelines were  amended in March 2011 to extend the program end date to 30 June 2012.7 

Audit objectives, scope and criteria 12. The objective of the audit was to assess the efficiency8 and effectiveness  of  the  establishment,  implementation  and  administration  of  the  general  component of the Local Jobs stream of the Jobs Fund, with a particular focus  on the establishment of program objectives and the extent to which approved  grants  have  demonstrably  contributed  to  the  cost‐effective  achievement  of  those objectives. 

13. The focus of this audit is the two rounds of the general component of  the LJ stream, including the administration of approved projects to achieve  program  objectives.  However,  reflecting  the  integrated  approach  taken  by  DEEWR  to  the  selection  processes  for  each  round,  the  audit  analysis  necessarily includes reference to the concurrent conduct of the two rounds of  the GCW stream. ANAO did not examine the establishment and operation of  the  Get  Communities  Working  Advisory  Council.  The  audit  examined  the  program  against  relevant  policy  and  legislative  requirements  for  the  expenditure  of  public  money  and  the  Commonwealth  Grant  G uidelines  (CGGs). 

Overall conclusion 14. The  Jobs  Fund  was  established  to  provide  timely  and  targeted  employment stimulus and opportunities in communities affected by the global  recession  and  for  disadvantaged  job  seekers.  Consistent  with  this  objective,  DEEWR implemented the program in a short timeframe and the department  was focussed on directing the available funding to those areas identified as  being at greatest risk as a result of the economic downturn.9  

                                                       7 In this respect, none of the Jobs Fund components were completed by the originally budgeted end dates. An amendment to the program guidelines to extend the IEP stream to 30 June 2012 took effect on 5 July 2010. The two

quarantined components budgeted to end in June 2010 were both extended to June 2011 due to project delays, with this being done through the movement of funds only. 8 As an economic stimulus program, efficiency was assessed with particular attention to whether the selection and

funding agreement processes were undertaken in a timely manner. This emphasis was consistent with the criterion adopted by the Government for the design of the stimulus packages established in response to the global financial crisis (see further at paragraph 5.1). 9

In total, 68 (74 per cent) of the 92 LJ projects were located in one of the 20 PEAs. A further five projects (five per cent) were located in the Victorian bushfire areas also prioritised by DEEWR. Collectively, those projects accounted for 81 per cent of contracted positions, and 86 per cent of reported actual positions.

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7. The Government agreed to allocate a total of $93.3 million to a second  public call for the Jobs Fund ($51.9 million under LJ and $41.4 million under  GCW),  and  that  tighter,  separate  guidelines  would  be  developed  for  both  streams. The remaining funding was re‐allocated to a number of other targeted  employment  initiatives,  and  to  support  the  Australian  Government  contribution to the Victorian bushfire recovery. 

Second funding round

8. The second call for applications was announced on 5 November 2009.  Revised program guidelines stated that, in the second round, the LJ stream  would  focus  on  the  creation  of  green  jobs,  development  of  green  skills,  promotion  of  energy  efficient  infrastructure  and  development  of  skills  in  future green industries. The GCW stream was to focus on projects to build  community capacity, improve community strength and amenity and provide  opportunities  for  disadvantaged  job  seekers,  thereby  creating  jobs  and  opportunities in communities affected by the global recession. 

9. The second round was again heavily subscribed, with 970 applications  seeking $890.6 million being received by the closing date of 11 December 2009  (365 LJ applications seeking $331.3 million and 605 GCW applications  seeking  $559.3 million). In February 2010, a further $11.5 million was re‐allocated from  the Jobs Fund for the Government’s Insulation Worker Adjustment package.  The second round was completed in March 2010, with 53 projects (five per cent  of  applications)  being  approved  for  amounts  totalling  $39 million  ($17.5 million  for  21 LJ  projects  and  $21.5 million  for  32 GCW  projects),  representing a significant under‐allocation compared to the available funding. 

Program closure

10. In  the  2010-11  Budget,  the  Government  announced  that:  ‘in  light  of  revised growth forecasts for the national economy, the need for funding in the  Local  Jobs  and  the  Get  Communities  Working  streams  has  diminished.’  Funding for the Jobs Fund was reduced by $48.6 million over two years from  2009-10. Of the $193 million originally available under each of the Jobs Fund  components administered by DEEWR, $69.3 million (36 per cent) was awarded  under  LJ,  and  $112.6 million  (58 per  cent)  was  awarded  under  GCW.  The remainder was reallocated to other measures or returned to the Budget. 

11. As noted, funding for Jobs Fund projects administered by DEEWR was  originally budgeted to end on 30 June 2011. However, to allow certain projects  that had experienced delays to receive fu nding in the 2011-12 financial year 

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(including five of the 92 contracted LJ projects), the Jobs Fund guidelines were  amended in March 2011 to extend the program end date to 30 June 2012.7 

Audit objectives, scope and criteria 12. The objective of the audit was to assess the efficiency8 and effectiveness  of  the  establishment,  implementation  and  administration  of  the  general  component of the Local Jobs stream of the Jobs Fund, with a particular focus  on the establishment of program objectives and the extent to which approved  grants  have  demonstrably  contributed  to  the  cost‐effective  achievement  of  those objectives. 

13. The focus of this audit is the two rounds of the general component of  the LJ stream, including the administration of approved projects to achieve  program  objectives.  However,  reflecting  the  integrated  approach  taken  by  DEEWR  to  the  selection  processes  for  each  round,  the  audit  analysis  necessarily includes reference to the concurrent conduct of the two rounds of  the GCW stream. ANAO did not examine the establishment and operation of  the  Get  Communities  Working  Advisory  Council.  The  audit  examined  the  program  against  relevant  policy  and  legislative  requirements  for  the  expenditure  of  public  money  and  the  Commonwealth  Grant  G uidelines  (CGGs). 

Overall conclusion 14. The  Jobs  Fund  was  established  to  provide  timely  and  targeted  employment stimulus and opportunities in communities affected by the global  recession  and  for  disadvantaged  job  seekers.  Consistent  with  this  objective,  DEEWR implemented the program in a short timeframe and the department  was focussed on directing the available funding to those areas identified as  being at greatest risk as a result of the economic downturn.9  

                                                       7 In this respect, none of the Jobs Fund components were completed by the originally budgeted end dates. An amendment to the program guidelines to extend the IEP stream to 30 June 2012 took effect on 5 July 2010. The two

quarantined components budgeted to end in June 2010 were both extended to June 2011 due to project delays, with this being done through the movement of funds only. 8 As an economic stimulus program, efficiency was assessed with particular attention to whether the selection and

funding agreement processes were undertaken in a timely manner. This emphasis was consistent with the criterion adopted by the Government for the design of the stimulus packages established in response to the global financial crisis (see further at paragraph 5.1). 9

In total, 68 (74 per cent) of the 92 LJ projects were located in one of the 20 PEAs. A further five projects (five per cent) were located in the Victorian bushfire areas also prioritised by DEEWR. Collectively, those projects accounted for 81 per cent of contracted positions, and 86 per cent of reported actual positions.

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15. Projects  funded  under  the  LJ  stream  contributed  to  the  provision  of  employment  and  training  opportunities  in  areas  affected  by  the  global  economic downturn. Nevertheless, delays in establishing funding agreements  for many of the first round projects and subsequent project implementation  delays  affected  the  rate  of  program  expenditure  and,  consequently,  the  timeliness  with  which  employment  benefits  were  achieved.10  In  addition,  aspects  of  the  methodology  adopted  for  identifying  the  actual  employment  and  training  outcomes  of  each  project  reduced  the  reliability  of  DEEWR’s  performance information as a measure of the employment stimulus directly  generated.11 

16. The  approach  taken  by  DEEWR  to  program  implementation  and  administration  was,  in  a  number  of  important  respects,  considerably  more  robust that the approach taken in respect to other elements of the Jobs Fund  audited by ANAO.12 For example, DEEWR: developed a comprehensive suite  of  internal  documentation  to  govern  program  implementation;  invested  considerable  resources  in  developing  and  implementing  a  methodology  for  scoring applications against the published selection criteria; included expected  employment  and  training  outcomes  in  the  funding  agreements  for  the  contracted  projects;  and  adopted  a  disciplined  approach  to  managing  these  funding agreements. It was also evident that DEEWR adopted some important  improvements to its ap proach for the second round compared with the first  round. 

17. An important focus for any competitive grant program is to select those  applications that best represent value for public money in the context of the  desired objectives and outcomes of the grant program. However, aspects of the  approach  taken  by  DEEWR  diminished  the  capacity  for  the  documented  selection  processes  to  demonstrate  that  the  projects  approved  under  each  round  were  the  most  meritorious  in  terms  of  the  program  guidelines.13 

                                                       10 Less than a third (29 per cent) of positions had been reported to DEEWR as achieved by the end of the first year of the Jobs Fund on 30 June 2010. 11

This particularly relates to the comparability of the bases on which expected and actual outcomes were measured, and the extent to which reported positions reflect a contribution to general economic activity rather than direct employment outcomes. 12

See ANAO Audit Report No.7 2011-12, Establishment, Implementation and Administration of the Infrastructure Employment Projects Stream of the Jobs Fund, Canberra, 22 September 2011; ANAO Audit Report No.27 2011-12, Establishment, Implementation and Administration of the Bike Paths Component of the Local Jobs Stream of the Jobs Fund, Canberra, 20 March 2012; and ANAO Audit Report No.11 2012-13, Establishment, Implementation and Administration of the Quarantined Heritage Component of the Local Jobs Stream of the Jobs Fund, Canberra, 27 November 2012. 13

See further at paragraph 36 in respect to the approach taken by the Assessment Review Committee.

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15. Projects  funded  under  the  LJ  stream  contributed  to  the  provision  of  employment  and  training  opportunities  in  areas  affected  by  the  global  economic downturn. Nevertheless, delays in establishing funding agreements  for many of the first round projects and subsequent project implementation  delays  affected  the  rate  of  program  expenditure  and,  consequently,  the  timeliness  with  which  employment  benefits  were  achieved.10  In  addition,  aspects  of  the  methodology  adopted  for  identifying  the  actual  employment  and  training  outcomes  of  each  project  reduced  the  reliability  of  DEEWR’s  performance information as a measure of the employment stimulus directly  generated.11 

16. The  approach  taken  by  DEEWR  to  program  implementation  and  administration  was,  in  a  number  of  important  respects,  considerably  more  robust that the approach taken in respect to other elements of the Jobs Fund  audited by ANAO.12 For example, DEEWR: developed a comprehensive suite  of  internal  documentation  to  govern  program  implementation;  invested  considerable  resources  in  developing  and  implementing  a  methodology  for  scoring applications against the published selection criteria; included expected  employment  and  training  outcomes  in  the  funding  agreements  for  the  contracted  projects;  and  adopted  a  disciplined  approach  to  managing  these  funding agreements. It was also evident that DEEWR adopted some important  improvements to its ap proach for the second round compared with the first  round. 

17. An important focus for any competitive grant program is to select those  applications that best represent value for public money in the context of the  desired objectives and outcomes of the grant program. However, aspects of the  approach  taken  by  DEEWR  diminished  the  capacity  for  the  documented  selection  processes  to  demonstrate  that  the  projects  approved  under  each  round  were  the  most  meritorious  in  terms  of  the  program  guidelines.13 

                                                       10 Less than a third (29 per cent) of positions had been reported to DEEWR as achieved by the end of the first year of the Jobs Fund on 30 June 2010. 11

This particularly relates to the comparability of the bases on which expected and actual outcomes were measured, and the extent to which reported positions reflect a contribution to general economic activity rather than direct employment outcomes. 12

See ANAO Audit Report No.7 2011-12, Establishment, Implementation and Administration of the Infrastructure Employment Projects Stream of the Jobs Fund, Canberra, 22 September 2011; ANAO Audit Report No.27 2011-12, Establishment, Implementation and Administration of the Bike Paths Component of the Local Jobs Stream of the Jobs Fund, Canberra, 20 March 2012; and ANAO Audit Report No.11 2012-13, Establishment, Implementation and Administration of the Quarantined Heritage Component of the Local Jobs Stream of the Jobs Fund, Canberra, 27 November 2012. 13

See further at paragraph 36 in respect to the approach taken by the Assessment Review Committee.

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In particular, the recorded assessment of the merits of competing applications  in terms of the published criteria was not a strong indicator of the projects that  would  be  selected  for  funding.14  In addition,  despite  the  Jobs  Fund  being  a  nationally competitive grant program: 

 funding  decisions  were  taken  for  the  first  round  in  respect  to  some  projects before all applications had been considered (and in some cases  assessed); and 

 for  both  rounds,  the  potential  geographic  distribution  of  funded  projects, including in relation to the 20 defined PEAs, influenced the  selection deliberations in a manner that had not been provided for in  the published program guidelines. 

18. Against  this  background,  ANAO  has  made  one  recommendation  relating to the design of the program guidelines and selection processes to be  applied by DEEWR in future competitive grant programs. 

19. In response to the global financial crisis, a series of stimulus measures  were  announced  by  the  Government  in  late  2008  and  early  2009  with  the  objective  of  providing  a  timely,  targeted  and  temporary  boost  to  economic  activity. The experience with the LJ stream, the other elements of the Jobs Fund  audited  by  ANAO  and  audits  of  other  economic  stimulus  programs  h as  highlighted  that,  although  funding  infrastructure  projects  that  were  not  already  proceeding  can  offer  long‐term  community  benefits,  for  economic  stimulus purposes there are challenges which are commonly underestimated  in  having  infrastructure  projects  delivered  in  the  desired  timeframe15  with  clearly  identifiable  employment  benefits.  In  this  context,  the  audits  by  the  ANAO,  and  other  reviews  of  the  implementation  of  particular  economic  stimulus  programs,  should  provide  useful  lessons  in  future  circumstances  where fiscal stimulus is being considered to support employment and promote  economic activity. 

                                                       14 Subsequent conclusions reached by the Assessment Review Committee in relation to each project were determinative as to whether each project was recommended for funding, rather than the moderated and quality assured scored

assessments against the published criteria being relied upon as the basis for identifying a project’s relative merit. 15 This relates to both projects commencing on time (for example, for the LJ stream, payments by March 2010 fell 45 per

cent short of the amount contracted to have been paid) and projects progressing as planned (for the LJ stream, reflecting project delays, less than a third of positions reported to DEEWR as being achieved had been delivered by the end of the first year of the planned two year duration of the Jobs Fund). This situation was reflected in funding being redirected (see Appendix 1) as well as the program funding allocated through the second round being significantly less than was available (as the need for stimulus had reduced, as outlined in Chapter 4 of this report).

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Key findings by chapter

Program establishment (chapter 2)

20. For both rounds of the Jobs Fund, DEEWR developed a comprehensive  suite of internal documentation. However, particularly in the first round, the  originally  documented  procedures  were  not  fully  implemented.  Revised program  documentation  to  reflect  the  actual  processes  applied  was  developed during, and subsequent to, the selection process. In that respect, the  departmental  procedural  guides  were  not  established  and  maintained  in  a  manner  that  enabled  the  date  of  effect  of  the  original  version,  and  of  any  subsequent  revisions  to  authorised  procedures,  to  be  readily  identified.  The accountability  of  DEEWR’s  administration  of  future  grant  programs  would be enhanced if: 

 the roles and procedures actually undertaken reflected the procedural  guides established to govern the conduct of the selection process; and  

 the date of effect of any revisions to the documented procedures was  clearly identifiable such that the actions taken are able to be compared  to the approved procedures at the relevant point in time. 

21. The significant response to the first call for proposals gave rise to a  number  of  challenges  for  DEEWR  in  maintaining  an  orderly  process  for  receipting  and  registerin g  applications,  and  allocating  projects  to  the  most  appropriate  Jobs  Fund  component  for  assessment.  The  request  that  applications  be  submitted  via  both  email  and  in  hard  copy  increased  the  volume  of  material  to  be  handled  and  the  complexity  of  identifying  the  population of compliant applications that were to be assessed. Various aspects  of the approach taken to completing the register of proposals diminished its  capacity to provide an accurate and complete record of applications received.  In  addition,  the  originally  documented  procedures  for  registering  and  assessing  proposals  were  not  fully  implemented,  particularly  for  those  received via email.  

22. In this respect, it had been anticipated from the outset that there would  be more than one funding round under the Jobs Fund. The program guidelines  had also stated that proposals could be submitted at any time from 1 July 2009,  suggesting an open‐ended submission process. That advice was contradictory  to the closed round approach identified in the public announcement of the first  round  and  subsequently  applied  in  the  selection  process.  However,  it  influenced the approach DEEWR adopted to administering some proposals, in 

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Key findings by chapter

Program establishment (chapter 2)

20. For both rounds of the Jobs Fund, DEEWR developed a comprehensive  suite of internal documentation. However, particularly in the first round, the  originally  documented  procedures  were  not  fully  implemented.  Revised program  documentation  to  reflect  the  actual  processes  applied  was  developed during, and subsequent to, the selection process. In that respect, the  departmental  procedural  guides  were  not  established  and  maintained  in  a  manner  that  enabled  the  date  of  effect  of  the  original  version,  and  of  any  subsequent  revisions  to  authorised  procedures,  to  be  readily  identified.  The accountability  of  DEEWR’s  administration  of  future  grant  programs  would be enhanced if: 

 the roles and procedures actually undertaken reflected the procedural  guides established to govern the conduct of the selection process; and  

 the date of effect of any revisions to the documented procedures was  clearly identifiable such that the actions taken are able to be compared  to the approved procedures at the relevant point in time. 

21. The significant response to the first call for proposals gave rise to a  number  of  challenges  for  DEEWR  in  maintaining  an  orderly  process  for  receipting  and  registerin g  applications,  and  allocating  projects  to  the  most  appropriate  Jobs  Fund  component  for  assessment.  The  request  that  applications  be  submitted  via  both  email  and  in  hard  copy  increased  the  volume  of  material  to  be  handled  and  the  complexity  of  identifying  the  population of compliant applications that were to be assessed. Various aspects  of the approach taken to completing the register of proposals diminished its  capacity to provide an accurate and complete record of applications received.  In  addition,  the  originally  documented  procedures  for  registering  and  assessing  proposals  were  not  fully  implemented,  particularly  for  those  received via email.  

22. In this respect, it had been anticipated from the outset that there would  be more than one funding round under the Jobs Fund. The program guidelines  had also stated that proposals could be submitted at any time from 1 July 2009,  suggesting an open‐ended submission process. That advice was contradictory  to the closed round approach identified in the public announcement of the first  round  and  subsequently  applied  in  the  selection  process.  However,  it  influenced the approach DEEWR adopted to administering some proposals, in 

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that the department operated on an expectation that projects not considered in  the first round selection process could be considered in a subsequent round.  

23. As a result of these various factors, a number of errors and anomalies  arose that impacted upon whether certain applications submitted in response  to the first call for applications were considered through the same processes  (and at the same time) as other projects competing for the available funding.  Specifically, more than 260 applications (some 10 per cent) were not assessed  until after the outcome of the competitive selection processes for the relevant  Jobs  Fund  components  had  been  finalised.  This  situation  significantly  impacted  upon  the  capacity  for  those  applications  to  receive  funding  consideration  in  the  same  manner  afforded  other  applications  submitted  in  response to the first call for proposals.16 

24. For the second round, DEEWR adopted various measures to address  issues  that  had  arisen  in  the  application  process  for  the  first  round  and  to  provide enhanced transparency and accountability over the management of  late and non‐conforming proposals. Collectively, these measures significantly  improved the accuracy, efficiency and effectiveness of the application process  and helped

 to largely eliminate the anomalies that had arisen in relation to the  first round. One area in which the equity and effectiveness of the application  process could have been further  improved was in relation to the format in  which applications were able to be submitted. In this respect, applicants were  limited to submitting applications in a specific spreadsheet format, via email.  This resulted in some applicants experiencing difficulties in completing and  lodging applications by the required date and time. 

First round selection processes (chapter 3)

25. The targeted stimulus objective of the Jobs Fund was reflected in the  three gateway criteria and four target areas set out in the program guidelines  as  the  criteria  on  which  projects  would  be  selected  (see  paragraph  4).  Projects would also be subject to due diligence and risk assessment, including  that applications would need to demonstrate that the project represented value  for money for the Australian Government. The program guidelines stated that  each proposal would be assessed on its merits, and in comparison to other  proposals submitted at the same time or previously. 

                                                       16 This issue is discussed further at paragraphs 28 and 3.63 to 3.83.

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26. Projects  were  assessed  and  scored  against  the  gateway  criteria  and  target  areas.  To  be  eligible  for  funding  consideration,  a  project  needed  to  achieve at least the minimum identified pass score against each of the three  gateway  criteria  and  at  least  one  of  the  four  target  areas.  However,  the  selection  methodology  did  not  seek  to  encapsulate  within  the  assessment  scores  all  factors  that  would  be  taken  into  account  in  selecting  projects  for  approval. In particular, there was no provision for an assessment of the value  for  money  factors  identified  in  the  published  program  guidelines  to  be  incorporated into the scores assigned to each project. These aspects were to be  considered as part of the deliberations of the Assessment Review Committee  (ARC) (a committee of senior DEEWR officials established to provide funding  recommendations to the departmental approval delegate). As it eventuated,  173 (43 per cent) of the 405 projects that achieved eligible scores were approved  (64 under LJ stream and 109 under GCW). 

27. The  ARC  deliberative  process  involved  a  significant  resource  commitment  at  a  senior  level  and  was  generally  well  documented.  The committee members exhibited awareness of the need to consider overall  merit in making decisions in relation to individ ual projects. However, aspects  of the approach taken diminished the capacity for the documented selection  process  to  demonstrate  that  the  173 approved  projects  were  the  most  meritorious (in terms of the published program guidelines) of the more than  1600 applications considered. This included that, despite the Jobs Fund being  conducted as a nationally competitive grant program: 

 the  applications  received  were  not  considered  as  a  single,  ranked  population  based  on  their  respective  scores  against  the  selection  criteria.  The  deliberative  process  involved  25  meetings  over  seven  weeks, with decisions being taken on a project by project basis (with  projects being considered in groups based upon the PEA in which they  were located). That process did not seek to explicitly demonstrate, prior  to  decisions  being  taken,  the  merits  of  each  proposal  relative  to  all  competing  proposals.  A mechanism  for  incorporating  the  ARC’s  conclusions  regarding  each  project’s  claims  against  the  program  guidelines, including in relation to value for money, into a final score or  rating  was  not  established.  Eligible  projects  were  not  ranked  on  a  national basis (either overall or within each stream) at the conclusion of  the ARC process; and 

 projects were approved in three tranches, with some being approved  before  all  competi ng  applications  had  been  considered  (or,  in  some 

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26. Projects  were  assessed  and  scored  against  the  gateway  criteria  and  target  areas.  To  be  eligible  for  funding  consideration,  a  project  needed  to  achieve at least the minimum identified pass score against each of the three  gateway  criteria  and  at  least  one  of  the  four  target  areas.  However,  the  selection  methodology  did  not  seek  to  encapsulate  within  the  assessment  scores  all  factors  that  would  be  taken  into  account  in  selecting  projects  for  approval. In particular, there was no provision for an assessment of the value  for  money  factors  identified  in  the  published  program  guidelines  to  be  incorporated into the scores assigned to each project. These aspects were to be  considered as part of the deliberations of the Assessment Review Committee  (ARC) (a committee of senior DEEWR officials established to provide funding  recommendations to the departmental approval delegate). As it eventuated,  173 (43 per cent) of the 405 projects that achieved eligible scores were approved  (64 under LJ stream and 109 under GCW). 

27. The  ARC  deliberative  process  involved  a  significant  resource  commitment  at  a  senior  level  and  was  generally  well  documented.  The committee members exhibited awareness of the need to consider overall  merit in making decisions in relation to individ ual projects. However, aspects  of the approach taken diminished the capacity for the documented selection  process  to  demonstrate  that  the  173 approved  projects  were  the  most  meritorious (in terms of the published program guidelines) of the more than  1600 applications considered. This included that, despite the Jobs Fund being  conducted as a nationally competitive grant program: 

 the  applications  received  were  not  considered  as  a  single,  ranked  population  based  on  their  respective  scores  against  the  selection  criteria.  The  deliberative  process  involved  25  meetings  over  seven  weeks, with decisions being taken on a project by project basis (with  projects being considered in groups based upon the PEA in which they  were located). That process did not seek to explicitly demonstrate, prior  to  decisions  being  taken,  the  merits  of  each  proposal  relative  to  all  competing  proposals.  A mechanism  for  incorporating  the  ARC’s  conclusions  regarding  each  project’s  claims  against  the  program  guidelines, including in relation to value for money, into a final score or  rating  was  not  established.  Eligible  projects  were  not  ranked  on  a  national basis (either overall or within each stream) at the conclusion of  the ARC process; and 

 projects were approved in three tranches, with some being approved  before  all  competi ng  applications  had  been  considered  (or,  in  some 

Summary

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cases, assessed). The first two tranches were based entirely on projects  that were  located  in  the  20  PEAs  and  Victorian  bushfire  area  to  the  exclusion  of  other  projects,  regardless  of  their  respective  selection  criteria scores. A first tranche of 13 projects in four areas prioritised for  consideration due to upcoming Jobs Expos was approved on 10 July  2009,  at  which  time  the  ARC  had  considered  only  15  per  cent  of  applications.  On  31 July  2009,  $107.61 million  was  approved  for  125 projects  located  in  a  PEA,  including  the  13 first  tranche  projects.  This more than exhausted the available funding, such that the merits of  non‐PEA  projects  had  not  been  considered.  The  then  Minister  for  Employment  Participation  subsequently  agreed  to  allocate  up  to  a  further  $40  million  to  the  first  round,  with  the  Minister  asking  for  projects to be re‐assessed on a national basis. The ARC then considered  the merits of 120 projects not located in a PEA, more than a third of  which (41, 34 per cent) were approved on 14 August 2009. A further  seven PEA projects were also approved, resulting in a final first round  outcome of 173 projects approved for funding totalling $132.3 million. 

28. Subsequent  to  the  conclusion  of  the

  first  round  of  the  LJ  and 

GCW streams, assessment processes were applied by DEEWR in respect to at  least 226 projects incorrectly excluded from the competitive selection process  as a result of various errors and anomalies (as discussed in chapter 2 of this  report). Similar to the approach taken in respect to the substantive first round  selection  process,  DEEWR  did  not  seek  to  establish,  through  a  consistent  assessment and deliberative process, the merit of each of those projects relative  to the overall population of proposals received in response to the first call for  applications. In particular, DEEWR considered those additional proposals in  separate tranches, including a final tranche involving 33 bike path projects that  had not been appropriately referred to the quarantined bike path component  prior to that component’s funding being exhausted. In agreeing to apply funds  that had become available from previously approved GCW and LJ projects to  approve (under the general component of the LJ stream) all eight of those bike  path projects that achieved at least the minimum scores required for funding  consideration, DEEWR did not seek to establish whether those projects were  the most meritorious of all of the  as yet unfunded first round applications in  terms the program objectives and guidelines. 

29. Having regard for the context in which the Jobs Fund was established,  the  department’s  focus  on  ensuring  funding  was  directed  to  the  areas  identified as being at greatest risk as a result of the economic downturn (that 

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is,  the  PEAs)  was  reasonable.  Indeed,  the  selection  approach  adopted  by  DEEWR had considerably greater regard for this key aspect of the program  than did the selection processes undertaken in respect to the other Jobs Fund  components that have been examined by ANAO.17  

30. However, care needed to be taken to ensure the implementation of that  policy  intention  remained  consistent  with  the  principles  of  sound  grants  administration. In particular, it is inconsistent with the effective conduct of a  nationally  competitive  grant  program  to  take  funding  decisions  before  all  applications have been assessed. The guidelines also made no reference to the  defined  PEAs,  instead  including  as  the  first  gateway  criterion  the  broader  requirement  for  projects  to  be  in  an  area  experiencing  high  or  increasing  unemployment  or  vulnerability  (with  a  project  being  located  in  a  PEA  representing  one  way  this  criterion  could  be  assessed  as  being  met).  An assessment of the extent to which that criterion had been met also involved  consideration  of  the  nature  of  the  employment  stimulus  that  would  be  generated  in  the  relevant  area  of  disadvantage.  Based  on  the  assessment  methodology adopted by DEEWR, the extent to which each project satisfied  the program priorities relative to other projects  should have been reflected in  the scored assessments. 

31. In that context, despite the processes applied by DEEWR to promote  the quality and consistency of the scored assessment process, the final scores  assigned to competing projects did not prove to be a strong indicator of the  projects that would be selected. The inclusion of a mechanism to establish a  final  merit  ranking  of  all  competing  projects  incorporating  relevant  ARC  deliberations would have significantly enhanced the capacity to demonstrate  that  the  funded  projects  represented  the  most  meritorious  in  terms  of  the  published  program  guidelines.  It  would  also  have  provided  a  means  of  reconciling  the  assessment  criteria  scores  allocated  to  each  project  with  the  selection  process  outcome  in  a  manner  that  the  brief  qualitative  comments  recorded by the ARC in relation to individual projects had a limited capacity to  do. In that respect, at the conclusion of the selection process, there were nearly  the same number of unapproved projects with eligible gateway scores of 10 or 

                                                       17 Specifically, ANAO’s audits of the IEP stream and the quarantined bike path and heritage components of the LJ stream identified that, in each case, the selection processes adopted had not resulted in funding being appropriately targeted at

projects that had demonstrably satisfied the requirement to be in an area of high or increasing unemployment or vulnerability (see ANAO Audit Report No. 7 2011-12, op. cit.; ANAO Audit Report No.27 2011-12, op. cit.; and ANAO Audit Report No.11 2012-13, op. cit).

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is,  the  PEAs)  was  reasonable.  Indeed,  the  selection  approach  adopted  by  DEEWR had considerably greater regard for this key aspect of the program  than did the selection processes undertaken in respect to the other Jobs Fund  components that have been examined by ANAO.17  

30. However, care needed to be taken to ensure the implementation of that  policy  intention  remained  consistent  with  the  principles  of  sound  grants  administration. In particular, it is inconsistent with the effective conduct of a  nationally  competitive  grant  program  to  take  funding  decisions  before  all  applications have been assessed. The guidelines also made no reference to the  defined  PEAs,  instead  including  as  the  first  gateway  criterion  the  broader  requirement  for  projects  to  be  in  an  area  experiencing  high  or  increasing  unemployment  or  vulnerability  (with  a  project  being  located  in  a  PEA  representing  one  way  this  criterion  could  be  assessed  as  being  met).  An assessment of the extent to which that criterion had been met also involved  consideration  of  the  nature  of  the  employment  stimulus  that  would  be  generated  in  the  relevant  area  of  disadvantage.  Based  on  the  assessment  methodology adopted by DEEWR, the extent to which each project satisfied  the program priorities relative to other projects  should have been reflected in  the scored assessments. 

31. In that context, despite the processes applied by DEEWR to promote  the quality and consistency of the scored assessment process, the final scores  assigned to competing projects did not prove to be a strong indicator of the  projects that would be selected. The inclusion of a mechanism to establish a  final  merit  ranking  of  all  competing  projects  incorporating  relevant  ARC  deliberations would have significantly enhanced the capacity to demonstrate  that  the  funded  projects  represented  the  most  meritorious  in  terms  of  the  published  program  guidelines.  It  would  also  have  provided  a  means  of  reconciling  the  assessment  criteria  scores  allocated  to  each  project  with  the  selection  process  outcome  in  a  manner  that  the  brief  qualitative  comments  recorded by the ARC in relation to individual projects had a limited capacity to  do. In that respect, at the conclusion of the selection process, there were nearly  the same number of unapproved projects with eligible gateway scores of 10 or 

                                                       17 Specifically, ANAO’s audits of the IEP stream and the quarantined bike path and heritage components of the LJ stream identified that, in each case, the selection processes adopted had not resulted in funding being appropriately targeted at

projects that had demonstrably satisfied the requirement to be in an area of high or increasing unemployment or vulnerability (see ANAO Audit Report No. 7 2011-12, op. cit.; ANAO Audit Report No.27 2011-12, op. cit.; and ANAO Audit Report No.11 2012-13, op. cit).

Summary

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more out of the maximum score of 15 (144 projects), as there were approved  projects with the minimum pass score of nine (145 projects).18 

Second round selection processes (chapter 4)

32. The  approach  initially  adopted  for  presenting  applications  for  ARC consideration in the second rounds of the LJ and GCW streams of the  Jobs Fund represented a significant improvement over that taken in the first  round. Specifically, the assessment of applications against the selection criteria  was largely completed prior to the ARC commencing its deliberations. Projects  needed  to  achieve  the  minimum  identified  pass  score  for  each  of  the  five  selection criteria to be eligible for funding consideration. Based on the scores  allocated, a national merit ranking and recommended funding cut off score for  each stream was prepared, having regard for the funding available. 

33. However, proposals were not considered by the ARC in the order of  their respective national ranking, but rather on a state by state basis. In that  context, the available evidence is that some projects under both streams that  had scores below the relevant funding cut‐off score first came to be specifically  considered by the ARC having regard for the potential geographic distribution  of  recommended  projects  in  terms  of  both   jurisdictions  and  PEAs.  Such  an  approach had not been provided for in the program guidelines. 

34. Following consideration of comments from the departmental approval  delegate on 65 projects identified as recommended or possible across the two  streams, the ARC recommended 50 projects for approval. Those projects were  approved  by  the  delegate  on 18 March  2010.  Some  days  later,  the delegate  approved  a  further  three  projects,  taking  total  approved  funding  to  $39 million. This represented a significant under‐allocation compared to the  $81 million available, with the approved projects representing just five per cent  of applications received. In that context, it is reasonable to expect there to be a  high degree of correlation between the projects that had achieved the highest  scores  against  the  selection  criteria  and  those  that  were  recommended  for  approval. However, this was not the case. 

35. The conclusions by the ARC as to whether a project represented ‘value  for money’ were determinative as to whether it was successful. Many highly  scored  projects  were  not  funded  despite  the  significant  under‐allocation  of 

                                                       18 See further in Table 3.4.

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available funding, while other lower scored projects were approved. In that  context, the documented ARC process reflected the department’s awareness of  the need to direct funding to projects that would provide value for money and  minimise risk. It is apparent that ARC members went to considerable effort in  their  deliberations  and  made  a  range  of  appropriate  inquiries  in  order  to  satisfy themselves that recommended projects would not represent an undue  risk in terms of the public money involved. However, as with the first round,  those deliberations were not undertaken within a framework that sought to  reconcile the range of scores achieved by each of the eligibly scored projects  with the committee’s reasons for deciding whether they respectively merited  funding. Instead, the judgements brought to bear by the ARC were expressed  in qualitative terms. 

36. The  transparency  of  the  ARC  decision‐making  process  would  have  greatly  benefited  from  the  committee  directly  relating  its  decisions  as  to  whether each project was suitable for funding to the selection criteria set out in  the  program  guidelines,  and  the  relative  merits  of  competing  projects.  However, the ARC did not seek to recalibrate the national ranking in order to  provide an objective measure of the  final assessed relative merits of competing  projects  within  each  stream.  This  significantly  diminished  the  utility  of  applying a robust quantitative ranking methodology.  

Program outcomes (chapter 5)

37. Through financial stimulus, the primary objective of the Jobs Fund was  to  support  and  create  jobs  and  employment  opportunities  in  communities  affected  by  the  global  recession  and  for  disadvantaged  job  seekers.  For  the  LJ stream, this was to be achieved through projects focussed on also providing  community and environmental benefits. In this respect, expected employment  and  training  outcomes  were  included  in  funding  agreements  as  milestone  requirements to be achieved in order for the funding recipient to receive the  associated payment. This was a significant improvement over the approach  adopted in relation to the other components of the Local Jobs stream.19 

                                                       19 Neither of the departments responsible for administering the quarantined components included employment outcomes within the contracted project outcomes or milestone requirements (see ANAO Audit Report No.27 2011-12, op. cit., pp.

143-145 and ANAO Audit Report No.11 2012-13, op. cit., p.153).

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available funding, while other lower scored projects were approved. In that  context, the documented ARC process reflected the department’s awareness of  the need to direct funding to projects that would provide value for money and  minimise risk. It is apparent that ARC members went to considerable effort in  their  deliberations  and  made  a  range  of  appropriate  inquiries  in  order  to  satisfy themselves that recommended projects would not represent an undue  risk in terms of the public money involved. However, as with the first round,  those deliberations were not undertaken within a framework that sought to  reconcile the range of scores achieved by each of the eligibly scored projects  with the committee’s reasons for deciding whether they respectively merited  funding. Instead, the judgements brought to bear by the ARC were expressed  in qualitative terms. 

36. The  transparency  of  the  ARC  decision‐making  process  would  have  greatly  benefited  from  the  committee  directly  relating  its  decisions  as  to  whether each project was suitable for funding to the selection criteria set out in  the  program  guidelines,  and  the  relative  merits  of  competing  projects.  However, the ARC did not seek to recalibrate the national ranking in order to  provide an objective measure of the  final assessed relative merits of competing  projects  within  each  stream.  This  significantly  diminished  the  utility  of  applying a robust quantitative ranking methodology.  

Program outcomes (chapter 5)

37. Through financial stimulus, the primary objective of the Jobs Fund was  to  support  and  create  jobs  and  employment  opportunities  in  communities  affected  by  the  global  recession  and  for  disadvantaged  job  seekers.  For  the  LJ stream, this was to be achieved through projects focussed on also providing  community and environmental benefits. In this respect, expected employment  and  training  outcomes  were  included  in  funding  agreements  as  milestone  requirements to be achieved in order for the funding recipient to receive the  associated payment. This was a significant improvement over the approach  adopted in relation to the other components of the Local Jobs stream.19 

                                                       19 Neither of the departments responsible for administering the quarantined components included employment outcomes within the contracted project outcomes or milestone requirements (see ANAO Audit Report No.27 2011-12, op. cit., pp.

143-145 and ANAO Audit Report No.11 2012-13, op. cit., p.153).

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38. DEEWR’s administration of the 92 contracted LJ stream projects was  effective  in  terms  of  aligning  the  payment  of  grant  funds  with  the  demonstrated achievement of project milestones and outcomes. This included  a  prudent  risk  management  approach  to  structuring  contracted  grant  payments.  DEEWR  actively  monitored  project  progress  and,  where  projects  experienced  significant  delays,  generally  took  proactive  steps  to  develop  remedial strategies that would assist in maximising the delivery of the project  within the required timeframe, while appropriately managing risk. 

39. The establishment of funding agreements for a number of the 64 first  round  projects  approved  in  August  2009  and  the  seven  bike  path  projects  approved  in  January  2010  that  were  ultimately  contracted  was  somewhat  delayed. Further, as a consequence of projects’ inability to progress at the rate  anticipated  (despite  having  been  approved  on  the  basis  they  met  the  requirement to be ready to start), program expenditure was delayed compared  to the expectations established by the 92 funding agreements. By the end of  March  2010  (12 months  after  the  Jobs  Fund  was  agreed  to  as  a  measure  to  provide immediate employment stimulus, and more than seven months after  the first round selection process had been completed), actual payments totalled  $12.

2 million.  This  fell  $9.8 million  (45 per  cent)  short  of  the  $22 million  contracted to have been paid from September 2009 (when funding agreements  were first signed) to 31 March 2010.  

40. A  number  of  projects  subsequently  experienced  further  delays  in  meeting contracted project milestones, with this being reflected in the rate at  which further payments were able to be made. There was a strong focus on the  need to effectively manage outstanding projects in the lead up to the budgeted  program end‐date of 30 June 2011, which was largely successful in enabling  projects to be finalised to the department’s satisfaction by that time. However,  in March 2011, the end‐date for the Jobs Fund was extended from 30 June 2011  to 30 June 2012 to allow for completion of projects disrupted by floods and  other delays, in order to enable the expected community benefits to come to  fruition. Funding of $14.5 million was moved into the 2011-12 financial year,  including  $1.43 million  for  five  LJ projects  (five  per  cent  of  contracted  LJ projects). The last payment for those five projects was made in June 2012. 

41. DEEWR has undertaken a range of evaluation activities in relation to  the  Jobs Fund and the broader Jobs and Training Compact. In this context, in  terms of employment stimulus, more than half (51 projects, 55 per cent) of the  92 LJ projects  reported  that  they  had  achieved  paid  employment  outcomes  greater  than  those  originally  contracted;  and  72 (78 per cent)  reported 

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over‐achievement  in  terms  of  unpaid  work  experience  positions.  However,  reflecting the project delays that affected the rate of program expenditure, less  than  a  third  (29 per  cent)  of  positions  had  been  reported  to  DEEWR  as  achieved by the end of the first year of the Jobs Fund on 30 June 2010. 

42. In  addition,  aspects  of  the  methodology  adopted  for  identifying  the  actual  employment  and  training  outcomes  of  each  project  indicate  that  DEEWR’s performance information for individual projects, and the program as  a whole, needs to be treated with some caution as a reliable measure of the  employment stimulus directly generated by funded projects. This particularly  relates  to  the  comparability  of  the  bases  on  which  expected  and  actual  outcomes were measured, and the extent to which reported positions reflect a  contribution  to  general  economic  activity  rather  than  direct  employment  outcomes.  In  terms  of  the  achievement  of  targeted  employment  stimulus,  68 (74 per cent) of the 92 LJ projects were located in one of the 20 identified  PEAs.  A  further  five  projects  (five  per  cent)  were  located  in  the  Victorian  bushfire  areas  also  prioritised  by  DEEWR.  Collecti vely,  those  projects  accounted for 81 per cent of contracted positions, and 86 per cent of reported  actual  positions.  However,  there  is  not  a  reliable  measure  of  the  extent  to  which the participants engaged in the reported positions had been drawn from  the targeted areas and groups of job seekers. 

Agency response to the proposed audit report 43. DEEWR’s response to the proposed audit report is provided below. 

The  Auditor‐General’s  report  acknowledges  that  projects  funded  under  the  general component of the Local Jobs Stream administered by the Department  of  Education,  Employment  and  Workplace  Relations  made  a  substantial  contribution  to  the  provision  of  employment  and  training  opportunities  in  areas affected by the global economic downturn. 

The  Jobs  Fund  was  set  up  to  create  jobs,  and  to  develop  skilled  workers  through  projects  that  build  community  and  social  infrastructure.  It  was  established  to  help  communities  most  affected  by  the  global  economic  downturn. It supported the building of community facilities, improvements to  training  and  community  amenities  and  establishment  of  social  enterprises,  creating almost 10 500 jobs, more than 2800 traineeships and over 5600 work  experience positions. 

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over‐achievement  in  terms  of  unpaid  work  experience  positions.  However,  reflecting the project delays that affected the rate of program expenditure, less  than  a  third  (29 per  cent)  of  positions  had  been  reported  to  DEEWR  as  achieved by the end of the first year of the Jobs Fund on 30 June 2010. 

42. In  addition,  aspects  of  the  methodology  adopted  for  identifying  the  actual  employment  and  training  outcomes  of  each  project  indicate  that  DEEWR’s performance information for individual projects, and the program as  a whole, needs to be treated with some caution as a reliable measure of the  employment stimulus directly generated by funded projects. This particularly  relates  to  the  comparability  of  the  bases  on  which  expected  and  actual  outcomes were measured, and the extent to which reported positions reflect a  contribution  to  general  economic  activity  rather  than  direct  employment  outcomes.  In  terms  of  the  achievement  of  targeted  employment  stimulus,  68 (74 per cent) of the 92 LJ projects were located in one of the 20 identified  PEAs.  A  further  five  projects  (five  per  cent)  were  located  in  the  Victorian  bushfire  areas  also  prioritised  by  DEEWR.  Collecti vely,  those  projects  accounted for 81 per cent of contracted positions, and 86 per cent of reported  actual  positions.  However,  there  is  not  a  reliable  measure  of  the  extent  to  which the participants engaged in the reported positions had been drawn from  the targeted areas and groups of job seekers. 

Agency response to the proposed audit report 43. DEEWR’s response to the proposed audit report is provided below. 

The  Auditor‐General’s  report  acknowledges  that  projects  funded  under  the  general component of the Local Jobs Stream administered by the Department  of  Education,  Employment  and  Workplace  Relations  made  a  substantial  contribution  to  the  provision  of  employment  and  training  opportunities  in  areas affected by the global economic downturn. 

The  Jobs  Fund  was  set  up  to  create  jobs,  and  to  develop  skilled  workers  through  projects  that  build  community  and  social  infrastructure.  It  was  established  to  help  communities  most  affected  by  the  global  economic  downturn. It supported the building of community facilities, improvements to  training  and  community  amenities  and  establishment  of  social  enterprises,  creating almost 10 500 jobs, more than 2800 traineeships and over 5600 work  experience positions. 

Summary

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Reflecting its economic stimulus objective, the Jobs Fund was implemented  within a relatively short timeframe for a competitive grant program, and the  report  notes  the  continued  improvements  implemented  by  the  Department  during  the  assessment  process,  with  the  approach  adapted  in  the  second  round for the approval of applications a significant improvement over the first  round. The Auditor‐General’s report also notes DEEWR’s administration of  the Local Jobs Stream was effective in terms of aligning payments of grant  funds with demonstrated achievement of project milestones and outcomes. 

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Recommendations

 

Recommendation No.1

Para 4.94

ANAO  recommends  that,  for  future  competitive  grant  programs,  the  Department  of  Education,  Employment  and Workplace Relations incorporates within the design  of the program guidelines and selection methodology: 

(a) criteria  and  an  associated  scoring  or  rating  approach  that  encapsulates  all  matters  considered  relevant  to  identifying  the  most  meritorious  projects,  having  regard  for  the  program objectives and the obligations applying  to decisions to approve grants of public money;  and 

(b) the  process  by  which  the  final  score  or  rating  assigned to each project will reflect the matters  considered in the selection deliberations and be  used to drive the compilation of the merit list of  eligible applications. 

DEEWR response: Agreed. 

 

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Recommendations

 

Recommendation No.1

Para 4.94

ANAO  recommends  that,  for  future  competitive  grant  programs,  the  Department  of  Education,  Employment  and Workplace Relations incorporates within the design  of the program guidelines and selection methodology: 

(a) criteria  and  an  associated  scoring  or  rating  approach  that  encapsulates  all  matters  considered  relevant  to  identifying  the  most  meritorious  projects,  having  regard  for  the  program objectives and the obligations applying  to decisions to approve grants of public money;  and 

(b) the  process  by  which  the  final  score  or  rating  assigned to each project will reflect the matters  considered in the selection deliberations and be  used to drive the compilation of the merit list of  eligible applications. 

DEEWR response: Agreed. 

 

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Audit Findings

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1. Introduction

This chapter provides an overview of the Jobs Fund as an economic stimulus measure.  It also outlines the audit objective, scope and criteria. 

Background 1.1 As part of the Australian Government’s response to the global financial  crisis, on 17 March 2009 the Strategic Priorities and Budget Committee (SPBC)  of Cabinet agreed to the establishment of an integrated $650 million Jobs Fund  that would operate for two years (from 1 July 2009 to 30 June 2011), and be  targeted to areas of high unemployment and projects that were ready to start  immediately. The Jobs Fund was to give priority to: supporting and creating  jobs; building skills for the future; building sustainable infrastructure for the  future; and new and existing social enterprises, and was comprised of the: 

 $150 million Infrastructure Employment Projects (IEP) stream; 

 $200 million Get Communities Working (GCW) stream; and 

 $300 million Local Jobs (LJ) stream. 

1.2 The  LJ  stream  related to  the  delivery  of  a  commitment made  to  the  Australian Greens in the context of securing passage (on 13 February 2009) of  the  $42 billion  Nation  Building  and  Jobs  Plan  legislation.20  Specifically,  the  Government had agreed to establish a $300 million fund to provide one‐off  grants for p

rojects that provided:  

 employment  opportunities  for  local  unemployed  or  under‐employed  people through innovative social projects such as recycling and home  maintenance programs;  

 directly  generated  local  jobs  for  people  suffering  labour  market  disadvantage  through  the  construction  of  local  infrastructure  which  improved community amenity; and  

 helped  to  seed  not‐for‐profit  labour  hire  and  other  initiatives  which  provided opportunities for people with severe barriers to participation,  including the homeless.  

                                                       20 The GCW stream similarly related to commitments made to the then Family First Senator for Victoria.

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1. Introduction

This chapter provides an overview of the Jobs Fund as an economic stimulus measure.  It also outlines the audit objective, scope and criteria. 

Background 1.1 As part of the Australian Government’s response to the global financial  crisis, on 17 March 2009 the Strategic Priorities and Budget Committee (SPBC)  of Cabinet agreed to the establishment of an integrated $650 million Jobs Fund  that would operate for two years (from 1 July 2009 to 30 June 2011), and be  targeted to areas of high unemployment and projects that were ready to start  immediately. The Jobs Fund was to give priority to: supporting and creating  jobs; building skills for the future; building sustainable infrastructure for the  future; and new and existing social enterprises, and was comprised of the: 

 $150 million Infrastructure Employment Projects (IEP) stream; 

 $200 million Get Communities Working (GCW) stream; and 

 $300 million Local Jobs (LJ) stream. 

1.2 The  LJ  stream  related to  the  delivery  of  a  commitment made  to  the  Australian Greens in the context of securing passage (on 13 February 2009) of  the  $42 billion  Nation  Building  and  Jobs  Plan  legislation.20  Specifically,  the  Government had agreed to establish a $300 million fund to provide one‐off  grants for projects that provided:  

 employment  opportunities  for  local  unemployed  or  under‐employed  people through innovative social projects such as recycling and home  maintenance programs;  

 directly  generated  local  jobs  for  people  suffering  labour  market  disadvantage  through  the  construction  of  local  infrastructure  which  improved community amenity; and  

 helped  to  seed  not‐for‐profit  labour  hire  and  other  initiatives  which  provided opportunities for people with severe barriers to participation,  including the homeless.  

                                                       20 The GCW stream similarly related to commitments made to the then Family First Senator for Victoria.

Introduction

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1.3 Reflecting  specific  elements  of  that  commitment,  $100 million  of  the  LJ stream was to be quarantined—$60 million for heritage‐related projects and  $40 million for the construction of bike paths. The remaining $200 million was  to be available through a general component of the LJ stream.  

1.4 The Jobs Fund was announced on 5 April 2009 as part of a Jobs and  Training  Compact  (the  Compact)  with  Australians  affected  by  the  global  recession that promised training, support and local initiatives to help them get  back to work. The Compact was announced as representing the next step in the  Governmentʹs  response  to  the  global  recession  and  had  three  elements,  including a compact with local communities. The Jobs Fund formed one of two  major initiatives under the compact with local communities. The other major  initiative was the engagement of Local Employment Coordinators (LECs) in  20 Priority Employment Areas (PEA) (see Figure 1.1).  

Figure 1.1

Location of Priority Employment Areas

 

Source: Department of Education, Employment and Workplace Relations.

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1.5 The first seven PEAs were announced on 5 April 2009. A further two  were  announced  on  28  May  2009,  with  the  remainder  being  announced  on  8 July 2009. The PEAs were identified based on analysis undertaken by the  Department of Education, Employment and Workplace Relations (DEEWR) of  a range of labour market indicators to identify those regions across Australia  with labour markets likely to experience disadvantage and deterioration as a  result of the global recession. 

Administering agencies 1.6 Administration of the Jobs Fund was shared across agencies. DEEWR  was  the  lead  agency  and  was  also  responsible  for  administering  the  GCW stream and general component of the LJ stream. At the time selection  processes were conducted for both rounds of the Jobs Fund, the other agencies  were:  

 for the heritage component, the then Department of the Environment,  Water, Heritage and the Arts (DEWHA); and 

 for the bike paths component and the IEP stream, the then Department  of  Infrastructure,  Transport,  Regional  Development  and  Local  Government (DITRDLG).  

1.7 For the first round of the Jobs Fund, DEEWR was the central point for  the submission of applications and was  responsible for allocating applications  to the appropriate component for assessment by the responsible department.  The second round only applied to the components administered by DEEWR. 

1.8 Following  the  announcement  of  the  $650 million  Jobs  Fund,  it  was  decided that departmental costs to administer the program would be met from  the  total  funding  allocation.  Of  the  $400 million  initially  allocated  to  the  components  DEEWR  was  to  administer,  $14.1 million  (3.5 per  cent)  was  set  aside for departmental costs. The remaining $385.9 million was available over  two years to 30 June 2011 to fund projects through the general component of  the  LJ stream  and  the  GCW  stream,  with  that  funding  being  evenly  split  between the two streams. 

Program implementation 1.9 There were two public calls for applications to the Jobs Fund. The first  opened on April 2009 and closed on 22 May 2009, with funding decisions for  the  components  administered  by  DEEWR  being  completed  in  August  2009.  The second round opened on 5 November 2009 and closed on 11 December 

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1.5 The first seven PEAs were announced on 5 April 2009. A further two  were  announced  on  28  May  2009,  with  the  remainder  being  announced  on  8 July 2009. The PEAs were identified based on analysis undertaken by the  Department of Education, Employment and Workplace Relations (DEEWR) of  a range of labour market indicators to identify those regions across Australia  with labour markets likely to experience disadvantage and deterioration as a  result of the global recession. 

Administering agencies 1.6 Administration of the Jobs Fund was shared across agencies. DEEWR  was  the  lead  agency  and  was  also  responsible  for  administering  the  GCW stream and general component of the LJ stream. At the time selection  processes were conducted for both rounds of the Jobs Fund, the other agencies  were:  

 for the heritage component, the then Department of the Environment,  Water, Heritage and the Arts (DEWHA); and 

 for the bike paths component and the IEP stream, the then Department  of  Infrastructure,  Transport,  Regional  Development  and  Local  Government (DITRDLG).  

1.7 For the first round of the Jobs Fund, DEEWR was the central point for  the submission of applications and was  responsible for allocating applications  to the appropriate component for assessment by the responsible department.  The second round only applied to the components administered by DEEWR. 

1.8 Following  the  announcement  of  the  $650 million  Jobs  Fund,  it  was  decided that departmental costs to administer the program would be met from  the  total  funding  allocation.  Of  the  $400 million  initially  allocated  to  the  components  DEEWR  was  to  administer,  $14.1 million  (3.5 per  cent)  was  set  aside for departmental costs. The remaining $385.9 million was available over  two years to 30 June 2011 to fund projects through the general component of  the  LJ stream  and  the  GCW  stream,  with  that  funding  being  evenly  split  between the two streams. 

Program implementation 1.9 There were two public calls for applications to the Jobs Fund. The first  opened on April 2009 and closed on 22 May 2009, with funding decisions for  the  components  administered  by  DEEWR  being  completed  in  August  2009.  The second round opened on 5 November 2009 and closed on 11 December 

Introduction

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2009, with funding decisions being finalised in March 2010. Ministers agreed to  a DEEWR official undertaking the role of approver for both rounds of the Jobs  Fund components administered by that department.  

First funding round

1.10 Although the three streams of the Jobs Fund had their own particular  focus, in each case the primary objective was supporting and creating jobs and  employment opportunities in communities affected by the global recession and  for disadvantaged job seekers. This was reflected in one initial set of program  guidelines  encapsulating  all  three  streams  being  published  in  April  2009,  which identified a common program objective as follows: 

The Jobs Fund will support and create jobs and skill development through  projects  that  build  community  infrastructure  and  social  capital  in  local  communities ... The  aim  of  the  Jobs  Fund  is  to  produce  long‐term  improvements in communities affected by the economic downturn. 

1.11 A  total  of  $100 million  was  announced  as  being  available  under  the  LJ and GCW streams in the first round. Separate funding amounts were not  identified  for  each  stream.  Although  not  identified  in  the  relevant  public  announcements,  the  $100 million  announced  as  available  through  the   first  round did not include the $60 million heritage component and $40 million bike  paths component, both of which were also allocated through the first round. 

1.12 There was a significant response to the first call for proposals, with over  1600 applications seeking nearly $1.5 billion being considered under the two  DEEWR‐administered  components.  Applications  were  assessed  through  a  single process, and allocated between the two streams by DEEWR as part of  that process. The selection process was completed on 14 August 2009, with a  total  of  $132.3 million21  being  approved  for  173  projects,  comprising  $50.1 million for 64 LJ projects and $82.2 million for 109 GCW projects.  

1.13 By  December  2009,  three  of  the  projects  approved  under  GCW  had  been withdrawn. In January 2010, the funding that had become available as a  result  of  these  processes  was  used  by  DEEWR  to  approve  eight  additional  projects under the LJ stream for a total of $1.75 million.22 

                                                       21 In August 2009, funding for the first round was increased to $140 million (see paragraphs 3.35 to 3.38). 22

This issue is discussed further at paragraphs 2.30 to 2.45 and 3.75 to 3.83.

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Re-targeting of the Jobs Fund

1.14 On  14  June  2009,  the  then  Deputy  Prime  Minister  asked  the  then  Minister for Employment Participation and the then Parliamentary Secretary  for  Employment  to  develop  a  whole  of  government  strategy  to  build  on  existing initiatives to support Australian jobs. The strategy was entitled ‘Keep  Australia Working’. An interim report released in July 2009 made a number of  recommendations  to  enhance  government  action  in  the  areas  of  greatest  immediate need, including considering how in the future to best focus the Jobs  Fund on projects in PEAs that would produce jobs for local people, training  and apprenticeships and pathways to long‐term employment. 

Allocation of remaining Jobs Fund funding

1.15 On 30 September 2009, the SPBC agreed to a number of measures that  had  been  identified  through  the  development  of  the  final  Keep  Australia  Working  report  in  order  to  maximise  local  jobs  and  training  opportunities.  This  included  re‐targeting  the  remaining  uncommitted  Jobs  Fund  funds,  identified at that time as totalling $242.8 million. The SPBC was advised that  the  first  round  had  attracted  a  large  number  of  proposals  that  were  not  competitive or well focussed and that there was a need for tighter guidelines to  be developed for future rounds of both streams. The SPBC  agreed that a total  of $93.3 million would be allocated to a second public call, as follows: 

 $51.9 million  of  the  $142.9 million  remaining  under  LJ  for  a  second  round  focussed  more  specifically  on  the  creation  of  jobs  and  skills,  especially in green jobs; and 

 $41.4 million of the $99.9 million remaining under GCW stream for a  second  round  with  a  strong  focus  on  intermediate  labour  market  models of social enterprise in disadvantaged areas.  

1.16 The SPBC also agreed to re‐allocate the remaining funding under both  streams to a number of targeted employment initiatives, as follows: 

 $10 million from LJ to support the building or redevelopment of five  youth  focused  arts,  business  and  community  centres  in  priority  employment regions as part of the Strategy for Young Australians; 

 $20 million  from  GCW  as  seed  funding  for  a  social  enterprise  development and investment fund; 

 $4.1 million from GCW to enable Centrelink to stage additional Jobs  Expos in priority regions; and 

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Re-targeting of the Jobs Fund

1.14 On  14  June  2009,  the  then  Deputy  Prime  Minister  asked  the  then  Minister for Employment Participation and the then Parliamentary Secretary  for  Employment  to  develop  a  whole  of  government  strategy  to  build  on  existing initiatives to support Australian jobs. The strategy was entitled ‘Keep 

Australia Working’. An interim report released in July 2009 made a number of  recommendations  to  enhance  government  action  in  the  areas  of  greatest  immediate need, including considering how in the future to best focus the Jobs  Fund on projects in PEAs that would produce jobs for local people, training  and apprenticeships and pathways to long‐term employment. 

Allocation of remaining Jobs Fund funding

1.15 On 30 September 2009, the SPBC agreed to a number of measures that  had  been  identified  through  the  development  of  the  final  Keep  Australia  Working  report  in  order  to  maximise  local  jobs  and  training  opportunities.  This  included  re‐targeting  the  remaining  uncommitted  Jobs  Fund  funds,  identified at that time as totalling $242.8 million. The SPBC was advised that  the  first  round  had  attracted  a  large  number  of  proposals  that  were  not  competitive or well focussed and that there was a need for tighter guidelines to  be developed for future rounds of both streams. The SPBC  agreed that a total  of $93.3 million would be allocated to a second public call, as follows: 

 $51.9 million  of  the  $142.9 million  remaining  under  LJ  for  a  second  round  focussed  more  specifically  on  the  creation  of  jobs  and  skills,  especially in green jobs; and 

 $41.4 million of the $99.9 million remaining under GCW stream for a  second  round  with  a  strong  focus  on  intermediate  labour  market  models of social enterprise in disadvantaged areas.  

1.16 The SPBC also agreed to re‐allocate the remaining funding under both  streams to a number of targeted employment initiatives, as follows: 

 $10 million from LJ to support the building or redevelopment of five  youth  focused  arts,  business  and  community  centres  in  priority  employment regions as part of the Strategy for Young Australians; 

 $20 million  from  GCW  as  seed  funding  for  a  social  enterprise  development and investment fund; 

 $4.1 million from GCW to enable Centrelink to stage additional Jobs  Expos in priority regions; and 

Introduction

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 $100 million  ($70 million  from  LJ  and  $30 million  from  GCW)  for  an  Apprenticeship  Kickstart  package  ($5.5 million  of  which  was  for  departmental administrative costs). 

1.17 A  total  of  $16.9 million  ($11 million  from  LJ,  $4.4 million  from  GCW and $1.5 million from the IEP stream) was also re‐allocated to support  the Australian Government contribution to the Victorian bushfire recovery. 

Final Keep Australia Working report

1.18 A  program  of  action  to  address  future  challenges  as  the  economy  recovered was outlined in the final Keep Australia Working report released on  16 October 2009 and reflected the decisions taken by the SPBC on 30 September  2009.  The  report  concluded  that  the  Jobs  Fund  had  been  effective  in  establishing  projects  which  supported  the  development  needs  of  local  communities while at the same time creating job opportunities, and that: 

The very competitive nature in the first round of funding requires that the  Government give stronger direction on the nature of projects expected to be  funded in Round Two to assist proponents in shaping their application. It is  also  important  to  ensure  that  Jobs  Fund  projects  achieve  sustainable  employment  and  training  opportunities  for  the  most  disadvantaged  Australians.23 

1.19 The report stated that a second funding round s hould proceed quickly  and with a clear focus on supporting specific objectives that would assist with  economic recovery. It should be targeted to more sustainable employment and  training opportunities for the most disadvantaged Australians by promoting  green jobs (LJ stream) and more effective intermediate labour market models  of  social  enterprise  (GCW  stream),  and  that  new  guidelines  for  the  second  round of each stream would help to meet those needs. 

Second funding round

1.20 The second call for applications was announced on 5 November 2009.  Separate, revised guidelines issued for each stream reflected the re‐targeting  agreed by the SPBC and recommended by the Keep Australia Working report,  stating respectively that in the second round: 

                                                       23 Senator the Hon Mark Arbib, Minister for Employment Participation and The Hon Jason Clare MP, Parliamentary Secretary for Employment, Keep Australia Working Final Report, October 2009, p. 19.

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 the LJ stream would focus on the creation of green jobs, development of  green  skills,  promotion  of  energy  efficient  infrastructure  and  development of skills in future green industries; and 

 the  GCW  stream  would  focus  on  the  delivery  of  projects  to  build  community  capacity,  improve  community  strength  and  amenity  and  provide  opportunities  for  disadvantaged  job  seekers;  and  that  ultimately  this  stream  and  its  associated  projects  would  link  people  with training and employment by creating jobs and opportunities in  communities affected by the global recession. 

1.21 The second round was again heavily subscribed, with 970 applications  seeking  $890.6  million  being  received  by  the  closing  date  of  11  December  2009.24  In February  2010,  the Government  announced  the  Insulation  Worker  Adjustment  package  to  assist  workers  affected  by  the  closure  of  the  Home  Insulation Program. Funding for two elements of that package (a $10 million  Insulation  Workers  Adjustment  Fund  and  $1.5 million  for  Insulation  Employment Coordinators) was re‐allocated from the funding available under  the second Jobs Fund round. Subsequently, the selection process for the second  round  was  completed  in  March  2010,  with  53  projects  (5.4 per  cent)  being  approved for amounts totalling $39 million ($17.5 million for 21 LJ projects  and  $21.5 million for 32 GCW projects).  

Program closure

1.22 In  the  2010-11  Budget,  the  Government  announced  that:  ‘in  light  of  revised growth forecasts for the national economy, the need for funding in the  Local  Jobs  and  the  Get  Communities  Working  streams  has  diminished.’  Funding for the Jobs Fund was reduced by $48.6 million over two years from  2009-10.25  Of  the  $193 million  originally  available  under  the  general  component of the LJ stream, $69.3 million (36 per cent) was awarded; and of  the  $193 million  originally  available  under  the  GCW  stream,  $112.6 million  (58 per cent) was awarded. The changes made to the funding allocation for the  Jobs  Fund  streams  administered  by  DEEWR  as  a  result  of  government  decisions  and  the  outcome  of  the  two  funding  rounds  are  set  out  in  Appendix 1. 

                                                       24 This comprised 365 LJ applications seeking $331.3 million and 605 GCW applications seeking $559.3 million. 25

The $14.1 million allocated for departmental costs was retained by DEEWR, with $8.5 million being attributed to the Jobs Fund and the remainder to administering initiatives to which Jobs Fund funding was re-allocated.

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 the LJ stream would focus on the creation of green jobs, development of  green  skills,  promotion  of  energy  efficient  infrastructure  and  development of skills in future green industries; and 

 the  GCW  stream  would  focus  on  the  delivery  of  projects  to  build  community  capacity,  improve  community  strength  and  amenity  and  provide  opportunities  for  disadvantaged  job  seekers;  and  that  ultimately  this  stream  and  its  associated  projects  would  link  people  with training and employment by creating jobs and opportunities in  communities affected by the global recession. 

1.21 The second round was again heavily subscribed, with 970 applications  seeking  $890.6  million  being  received  by  the  closing  date  of  11  December  2009.24  In February  2010,  the Government  announced  the  Insulation  Worker  Adjustment  package  to  assist  workers  affected  by  the  closure  of  the  Home  Insulation Program. Funding for two elements of that package (a $10 million  Insulation  Workers  Adjustment  Fund  and  $1.5 million  for  Insulation  Employment Coordinators) was re‐allocated from the funding available under  the second Jobs Fund round. Subsequently, the selection process for the second  round  was  completed  in  March  2010,  with  53  projects  (5.4 per  cent)  being  approved

 for amounts totalling $39 million ($17.5 million for 21 LJ projects and  $21.5 million for 32 GCW projects).  

Program closure

1.22 In  the  2010-11  Budget,  the  Government  announced  that:  ‘in  light  of  revised growth forecasts for the national economy, the need for funding in the  Local  Jobs  and  the  Get  Communities  Working  streams  has  diminished.’  Funding for the Jobs Fund was reduced by $48.6 million over two years from  2009-10.25  Of  the  $193 million  originally  available  under  the  general  component of the LJ stream, $69.3 million (36 per cent) was awarded; and of  the  $193 million  originally  available  under  the  GCW  stream,  $112.6 million  (58 per cent) was awarded. The changes made to the funding allocation for the  Jobs  Fund  streams  administered  by  DEEWR  as  a  result  of  government  decisions  and  the  outcome  of  the  two  funding  rounds  are  set  out  in  Appendix 1. 

                                                       24 This comprised 365 LJ applications seeking $331.3 million and 605 GCW applications seeking $559.3 million. 25

The $14.1 million allocated for departmental costs was retained by DEEWR, with $8.5 million being attributed to the Jobs Fund and the remainder to administering initiatives to which Jobs Fund funding was re-allocated.

Introduction

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1.23 Funding for Jobs Fund projects administered by DEEWR was originally  budgeted to end on 30 June 2011. However, to allow certain projects that had  experienced delays to receive funding in the 2011-12 financial year (including  five of the 92 contracted LJ stream projects), the Jobs Fund guidelines were  amended by explanatory note on 24 March 2011 to extend the program end  date to 30 June 2012.26  

Audit objective, scope and criteria 1.24 The  objective  of  this  audit  was  to  assess  the  efficiency27  and  effectiveness of the establishment, implementation and administration of the  general component of the Local Jobs stream of the Jobs Fund, with a particular  focus  on  the  establishment  of  program  objectives  and  the  extent  to  which  approved  grants  have  demonstrably  contributed  to  the  cost‐effective  achievement of those objectives.  

1.25 The audit examined the program against relevant policy and legislative  requirements  for  the  expenditure  of  public  money  and  the  Commonwealth  Grant  Guidelines  (CGGs).  Particular  emphasis  was  given  to  examining  whether the program was achieving its stated objectives and providing value  for public money, including through consideration of whether: 

 projects were identified, assessed and approved  in accordance with the  program  guidelines,  the  Financial  Management  and  Accountability  Regulations 1997 (FMA Regulations) and the CGGs; and 

 appropriate  oversight  arrangements  were  established  with  funding  recipients, and approved projects have been monitored and delivered  in accordance with the terms and conditions of funding. 

1.26 The focus of this audit is the two funding rounds conducted for the  general component of the LJ stream, including the administration of approved  projects  to  achieve  program  objectives.  However,  reflecting  the  integrated  approach  taken  by  DEEWR  to  the  application,  assessment  and  approval 

                                                       26 In this respect, none of the Jobs Fund components were completed by the originally budgeted end dates. An extension to 30 June 2012 of the IEP stream (which had also been budgeted to end in June 2011) took effect on 5 July 2010, also

by way of explanatory note. The two quarantined components were both budgeted to end in June 2010 but were extended to June 2011 due to project delays. For those two components, this was done through the movement of funds only. 27

As an economic stimulus program, efficiency was assessed with particular attention to whether the selection and funding agreement processes were undertaken in a timely manner. This emphasis was consistent with the criterion adopted by the Government for the design of the stimulus packages established in response to the global financial crisis (see further at paragraph 5.1).

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processes for each round, the audit analysis necessarily includes reference to  the concurrent conduct of the two rounds of the GCW stream. ANAO did not  examine  the  establishment  and  operation  of  the  Get  Communities  Working  Advisory Council. 

1.27 Performance audits of the IEP stream and the quarantined bike paths  and  heritage  components  of  the  LJ  stream  were  tabled  in  the  Parliament,  respectively, in September 2011, March 2012 and November 2012.28 Given the  various agencies involved in the administration of the Jobs Fund, the audit was 

undertaken under section 18 of the Auditor‐General Act 1997. The audit was  conducted  in  accordance  with  ANAO  auditing  standards  at  a  cost  to  the  ANAO of $224 580. 

Report structure

1.28 The audit findings are reported in the following chapters. 

Chapter Chapter Overview

2. Program Establishment

Examines the approach taken by DEEWR to establishing, implementing and maintaining procedural documentation to govern the conduct of the Jobs Fund, and to seeking and receiving applications to each of the two funding rounds.

3. First Round Selection Processes Examines the assessment and selection processes undertaken by DEEWR in respect to the first round of the Jobs Fund.

4. Second Round Selection Processes

Examines the assessment and selection processes undertaken by DEEWR in respect to the second round of the Jobs Fund.

5. Program Outcomes

Examines the administration of Local Jobs projects, with a focus on the extent to which the program demonstrably delivered economic stimulus outcomes.

 

                                                       28 See ANAO Audit Report No.7 2011-12, Establishment, Implementation and Administration of the Infrastructure Employment Projects Stream of the Jobs Fund, Canberra, 22 September 2011; ANAO Audit Report No.27 2011-12,

Establishment, Implementation and Administration of the Bike Paths Component of the Local Jobs Stream of the Jobs Fund, Canberra, 20 March 2012; and ANAO Audit Report No.11 2012-13, Establishment, Implementation and Administration of the Quarantined Heritage Component of the Local Jobs Stream of the Jobs Fund, Canberra, 27 November 2012.

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processes for each round, the audit analysis necessarily includes reference to  the concurrent conduct of the two rounds of the GCW stream. ANAO did not  examine  the  establishment  and  operation  of  the  Get  Communities  Working  Advisory Council. 

1.27 Performance audits of the IEP stream and the quarantined bike paths  and  heritage  components  of  the  LJ  stream  were  tabled  in  the  Parliament,  respectively, in September 2011, March 2012 and November 2012.28 Given the  various agencies involved in the administration of the Jobs Fund, the audit was 

undertaken under section 18 of the Auditor‐General Act 1997. The audit was  conducted  in  accordance  with  ANAO  auditing  standards  at  a  cost  to  the  ANAO of $224 580. 

Report structure

1.28 The audit findings are reported in the following chapters. 

Chapter Chapter Overview

2. Program Establishment

Examines the approach taken by DEEWR to establishing, implementing and maintaining procedural documentation to govern the conduct of the Jobs Fund, and to seeking and receiving applications to each of the two funding rounds.

3. First Round Selection Processes Examines the assessment and selection processes undertaken by DEEWR in respect to the first round of the Jobs Fund.

4. Second Round Selection Processes

Examines the assessment and selection processes undertaken by DEEWR in respect to the second round of the Jobs Fund.

5. Program Outcomes

Examines the administration of Local Jobs projects, wi th a focus on the extent to which the program

demonstrably delivered economic stimulus outcomes.

 

                                                       28 See ANAO Audit Report No.7 2011-12, Establishment, Implementation and Administration of the Infrastructure Employment Projects Stream of the Jobs Fund, Canberra, 22 September 2011; ANAO Audit Report No.27 2011-12,

Establishment, Implementation and Administration of the Bike Paths Component of the Local Jobs Stream of the Jobs Fund, Canberra, 20 March 2012; and ANAO Audit Report No.11 2012-13, Establishment, Implementation and Administration of the Quarantined Heritage Component of the Local Jobs Stream of the Jobs Fund, Canberra, 27 November 2012.

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2. Program Establishment

This chapter examines the approach taken by DEEWR to establishing, implementing  and maintaining procedural documentation to govern the conduct of the Jobs Fund,  and to seeking and receiving applications to each of the two funding rounds. 

Introduction 2.1 The  CGGs  emphasise  that  agencies  should  develop  such  policies,  procedures and guidelines as are necessary for the sound administration of  grants.  It  is  important  that  the  procedures  to  be  adopted  in  conducting  a  competitive  grant  program  are  established  prior  to  the  selection  process  commencing, and that the authorised procedures are subject to appropriate  review  and  maintenance  over  the  course  of  the  program.  In  particular,  an  important  element  in  the  effective  administration  of  a  competitive  grant  program is the clarity with which the requirements to be fulfilled in submitting  applications  are  advised  to  potential  applicants  and  administered  by  the  responsible agency. In this context, ANAO examined the processes employed  by DEEWR in: 

 establishing and maintaining documentation to guide the conduct of  the two rounds of the Jobs Fund as a competitive grant program; 

 receiving and recording applications submitted in response to the two  public calls for proposals; and 

 particularly  for  the  first  round,  allocating  proposals  to  the  various  streams for assessment. 

Establishing procedural documentation 2.2 For both rounds of the Jobs Fund, DEEWR developed a comprehensive  suite  of  internal  documentation.  In  developing  the  documentation  for  the  second  round,  DEEWR  had  regard  to  recommendations  contained  in  a  November  2009  report  from  an  external  firm  engaged  to  examine  the  department’s conduct of the program from a probity perspective.29 

                                                       29 Although described as a probity audit, neither the plan of procedures agreed with the department or the final report identified any auditing standard under which the engagement had been conducted. The sample base was very small

(four projects) and, in some cases, relied upon the department identifying and providing relevant examples.

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Timeliness in establishing program documentation

2.3 Reflecting its economic stimulus objective, the Jobs Fund was initially  implemented within a relatively short timeframe. Four weeks elapsed between  the SPBC’s 17 March 2009 decision to establish the Fund and the first call for  applications being announced on 18 April 2009, with applications closing five  weeks later on 22 May 2009. Despite the short timeframe, DEEWR observed  good practice in having assessment guidelines (which incorporated procedures  relating to the receipt and registration of applications), assessment templates  and registration checklists in place, and the training of assessors undertaken,  prior to applications closing. However, a process of formal endorsement of  those procedural guides by a nominated authority was not established until  the development of revised guides commenced in July 2009.  

2.4 Terms of reference and draft guidelines setting out the procedures to be  followed  by  the  Assessment  Review  Committee  (ARC)  established  to  formulate funding recommendations were presented to the committee’s first  meeting  on  25 June  2009.  The  terms  of  reference  were  endorsed  at  that  meeting. Formal endorsement of the associated guidelines was not recorded.  

2.5 The finalisation of documented procedures was not as timely for the  second  round  that  closed  on  11 December  2009.  A  suite  of  draft  guides,   including registration and assessment procedures, was circulated for review  on  22 January  2010.  The  ARC  endorsed  final  versions  of  the  guides  on  28 January  2010,  by  which  time  the  assessment  of  applications  against  the  selection criteria was largely complete.  

Documenting revisions to internal procedures

2.6 As noted, procedural documentation for the first round was established  within a short timeframe. However, the actual processes subsequently applied  to  receipting,  assessing  and  selecting  projects  did  not  reflect  the  originally  documented  procedures.  This  arose  partly  in  response  to  the  volume  of  applications received and also as a result of reconsideration of impracticalities  and/or methodological flaws in the procedures originally set out. 

2.7 In  this  respect,  as  noted,  the  assessment  guidelines  established  in  May 2009 incorporated procedures for receiving and registering applications.  Departmental  records  indicate  that  development  of  a  separate  document  entitled  Registration  and  Conformance  Guidelines  (registration  guidelines)  commenced on or around 11 July 2009 (some seven weeks after applications  had closed on 22 May 2009). On the same date, development of a significantly 

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Timeliness in establishing program documentation

2.3 Reflecting its economic stimulus objective, the Jobs Fund was initially  implemented within a relatively short timeframe. Four weeks elapsed between  the SPBC’s 17 March 2009 decision to establish the Fund and the first call for  applications being announced on 18 April 2009, with applications closing five  weeks later on 22 May 2009. Despite the short timeframe, DEEWR observed  good practice in having assessment guidelines (which incorporated procedures  relating to the receipt and registration of applications), assessment templates  and registration checklists in place, and the training of assessors undertaken,  prior to applications closing. However, a process of formal endorsement of  those procedural guides by a nominated authority was not established until  the development of revised guides commenced in July 2009.  

2.4 Terms of reference and draft guidelines setting out the procedures to be  followed  by  the  Assessment  Review  Committee  (ARC)  established  to  formulate funding recommendations were presented to the committee’s first  meeting  on  25 June  2009.  The  terms  of  reference  were  endorsed  at  that  meeting. Formal endorsement of the associated guidelines was not recorded.  

2.5 The finalisation of documented procedures was not as timely for the  second  round  that  closed  on  11 December  2009.  A  suite  of  draft  guides,   including registration and assessment procedures, was circulated for review  on  22 January  2010.  The  ARC  endorsed  final  versions  of  the  guides  on  28 January  2010,  by  which  time  the  assessment  of  applications  against  the  selection criteria was largely complete.  

Documenting revisions to internal procedures

2.6 As noted, procedural documentation for the first round was established  within a short timeframe. However, the actual processes subsequently applied  to  receipting,  assessing  and  selecting  projects  did  not  reflect  the  originally  documented  procedures.  This  arose  partly  in  response  to  the  volume  of  applications received and also as a result of reconsideration of impracticalities  and/or methodological flaws in the procedures originally set out. 

2.7 In  this  respect,  as  noted,  the  assessment  guidelines  established  in  May 2009 incorporated procedures for receiving and registering applications.  Departmental  records  indicate  that  development  of  a  separate  document  entitled  Registration  and  Conformance  Guidelines  (registration  guidelines)  commenced on or around 11 July 2009 (some seven weeks after applications  had closed on 22 May 2009). On the same date, development of a significantly 

Program Establishment

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revised  version  of  the assessment  guidelines  was  also  initiated.  Versions  of  these  documents  were  provided  to  the  probity  reviewer  on  22 July  2009  as  representing  the  authoritative  program  documentation.  Neither  document  included any reference to replacing earlier versions, nor was there evidence of  DEEWR providing the reviewer with the original guidelines. 

2.8 The first round selection process was completed on 14 August 2009,  with  the  outcome  being  announced  on  3  September  2009.  On 15 September  2009, the probity reviewer advised DEEWR of two probity issues it considered  the department should address, one of which related to the process applied in  assessing applications having departed from that set out in the documented  procedures  (as  provided  to  the  external  reviewer).30  Internal  advice  on  the  same  day  was  that  the  department  was  in  the  process  of  updating  its  assessment  guidelines  and  other  documentation  ‘to  reflect  actual  practice’.  On 6  October  2009,  DEEWR  provided  the  probity  reviewer  with  further  revised  registration31  and  assessment  guides,  together  with  two  additional  guides relating to project selection and approval and applicant debriefings.32 

2.9 The probity reviewer’s November  2009 final report noted that, since  providing  its  initial  advice,  the  reviewer  had  been  provided  with  ‘revised  internal

 Program guidance which reflect the assessment process that has to  date actually been adopted.’ The probity reviewer expressed the view that the  issues with the initial internal program guidance may have arisen because of  the time pressures the department was under to implement the program and  because the documentation was adapted from departmental standard tender  templates, which were not clearly fit for a grant funding program. 

2.10 Regardless of the time pressures that may impact on the administration  of a grant program, retrospectively amending the documentation governing  the  conduct  of  the  selection  exercise  in  order  to  align  the  authorised  procedures  with  processes  already  undertaken  does  not  represent  good  practice. This is particularly the case where the revised document is not clearly 

                                                       30 The second issue, relating to the setting aside of applications received via email only, is discussed further at paragraphs 2.25 to 2.34 and 3.63 to 3.83. 31

The processes applied to receiving first round applications are discussed at paragraphs 2.25 to 2.45. 32 Development of the project selection and approval guidelines commenced in July 2009 and was finalised in September 2009. As with the other revised procedural guides developed during and subsequent to the first round being completed,

it was expressed in prospective terms. For example, the guide stated that: ‘An indicative timetable for the Jobs Fund project assessment and selection process for Round 1 is at Attachment A.’ The ‘indicative’ timetable attached to the guide differed significantly from the one that had been developed at the outset of the assessment process because it identified the actual dates on which key events had occurred, including the first meeting of the ARC on 25 June 2009, the delegate’s final approval on 14 August 2009 and the Minister’s 3 September 2009 announcement of the outcome.

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identifiable on its face as having been prepared subsequent to the completion  of the processes it purports to direct.  

2.11 In  that  respect,  a  common  feature  of  the  procedural  documentation  developed by DEEWR for both rounds of the Jobs Fund was that it was not  established and maintained as controlled documents. The procedural guides,  which were held on a shared computer drive, did not carry any reference to  the  date and  manner  of  approval.  Subsequent  revisions  were  not  issued  as  numbered  versions  of  the  original  document,  or  with  an  associated  log  of  changes in order to provide a clear record of the changes made in each version  and  the  date  they  took  effect.33  Each  revised  version  was  presented  in  prospective terms that identified the procedures set out the guide as those that  the department ‘will apply’, even though the relevant processes had already  been completed. In that context: 

 as  noted,  it  is  important  that  the  procedures  to  be  adopted  in  conducting  a competitive grant program are established prior to the  selection process commencing, with those procedures and their date of  effect being subject to approval by a nominated auth ority; 

 where it is proposed to depart from the authorised procedures, it is  better practice for each such departure to be documented and approved  prior to the revised procedures being implemented; and 

 where it is determined subsequent to processes being undertaken that  there  has  been  a  departure  from  the  authorised  procedures,  it  is  important that any revisions then made to the program documentation  are undertaken in a manner that maintains a clear audit trail to enable  the processes undertaken to be compared to the approved procedures  current at the time the relevant actions were taken.  

Clarity of roles and responsibilities 2.12 The CGGs advise that granting activity should be underpinned by solid  governance structures and clear lines of accountability. In that context, there  were  aspects  of  the  Jobs  Fund  selection  process  that  would  have  benefited  from being more clearly articulated in the program documentation. 

                                                       33 Some guides carried a warning that printed versions may be out of date, but an authoritative basis for identifying which version of the document a printed copy may represent was not established.

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identifiable on its face as having been prepared subsequent to the completion  of the processes it purports to direct.  

2.11 In  that  respect,  a  common  feature  of  the  procedural  documentation  developed by DEEWR for both rounds of the Jobs Fund was that it was not  established and maintained as controlled documents. The procedural guides,  which were held on a shared computer drive, did not carry any reference to  the  date and  manner  of  approval.  Subsequent  revisions  were  not  issued  as  numbered  versions  of  the  original  document,  or  with  an  associated  log  of  changes in order to provide a clear record of the changes made in each version  and  the  date  they  took  effect.33  Each  revised  version  was  presented  in  prospective terms that identified the procedures set out the guide as those that  the department ‘will apply’, even though the relevant processes had already  been completed. In that context: 

 as  noted,  it  is  important  that  the  procedures  to  be  adopted  in  conducting  a competitive grant program are established prior to the  selection process commencing, with those procedures and their date of  effect being subject to approval by a nominated auth ority; 

 where it is proposed to depart from the authorised procedures, it is  better practice for each such departure to be documented and approved  prior to the revised procedures being implemented; and 

 where it is determined subsequent to processes being undertaken that  there  has  been  a  departure  from  the  authorised  procedures,  it  is  important that any revisions then made to the program documentation  are undertaken in a manner that maintains a clear audit trail to enable  the processes undertaken to be compared to the approved procedures  current at the time the relevant actions were taken.  

Clarity of roles and responsibilities 2.12 The CGGs advise that granting activity should be underpinned by solid  governance structures and clear lines of accountability. In that context, there  were  aspects  of  the  Jobs  Fund  selection  process  that  would  have  benefited  from being more clearly articulated in the program documentation. 

                                                       33 Some guides carried a warning that printed versions may be out of date, but an authoritative basis for identifying which version of the document a printed copy may represent was not established.

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Inter-departmental committee

2.13 An unusual aspect of the design of the first round was that, while the  Jobs  Fund  comprised  a  number  of  streams,  applicants  were  not  able  to  nominate the component they were applying to. Rather, applications were to  be submitted to DEEWR in the first instance, with the Jobs Fund guidelines  stating  that  a  joint  committee  from  the  administering  departments  would  determine a project’s suitability for funding under the LJ or GCW streams and  direct it to the appropriate department for assessment.  

2.14 This role for the inter‐departmental committee was also set out in the  ARC guidelines considered on 25 June 2009 (one month after applications had  closed),  and  in  all  subsequent  versions  of  the  ARC  guidelines  and  the  registration guidelines. In practice, however, DEEWR undertook the role of  allocating projects to streams for assessment.34 The procedures to be followed  in undertaking that role were not documented.35 

2.15 The terms of reference for the inter‐departmental committee agreed on  28  July  2009  did  not  refer  to  the  role  set  out  in  the  program  guidelines  published for the first funding round. The only documented  consideration of  how the committee had fulfilled that role occurred on 20 April 2010 (following  the conclusion of the second round), at which it was agreed that the process  undertaken to give effect to the provision in the program guidelines was that  departments  had  undertaken  assessments  of  those  applications  referred  to  them by DEEWR ‘on behalf of’ the committee.36  

                                                       34 DEEWR advice to ANAO was that: ‘Given the [joint committee] included senior staff (SES Band 1 and 2) from DEEWR, [DITRDLG] and DEWHA, it was not appropriate for the Committee to individually allocate in excess of 2000

applications...to a stream for assessment. Senior staff from DEEWR decided which stream a project should be considered under. Some projects were sent to the other departments only to be later returned as the other department decided it would be better suited under (the general streams for which DEEWR was responsible).’ See ANAO Audit Report No.7 2011-12, op. cit., p. 76. 35

DEEWR advised ANAO that: ‘The decision to not have a section in the application form where applicants could specify which stream they wished to apply for was a deliberate attempt to provide flexibility in the assessment process and give all projects the best chance to receive funding under either stream (where they were eligible). Given that there were significant similarities and cross over between the LJ and GCW streams in Round One, it was decided that all applications should be submitted without identifying a particular stream and assessors would determine if the project was suitable under one or both streams. In addition, given the cross-over between the two streams in Round One, requiring applicants to identify which stream they were applying to would have created confusion and lead to inefficiencies at a time when receipt and processing of applications needed to happen as quickly as possible in order to implement the Government’s stimulus response and create employment.’ 36

The committee further agreed that, where Departments identified projects that had been incorrectly allocated, these were returned to DEEWR for consideration under the appropriate stream.

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Roles of the ARC and DEEWR decision-maker

First funding round

2.16 The  April  2009  program  guidelines  stated  that  recommendations  to  fund projects under the DEEWR‐administered components would be made by  DEEWR to ‘the Deputy Prime Minister or their Delegate’. DEEWR’s May 2009  assessment guidelines had stated that the projects to be recommended would  be  identified  by  the  inter‐departmental  committee37,  however  the  ARC  was  subsequently formed to formulate funding recommendations in relation to the  components  DEEWR  was  responsible  for  administering.  The  DEEWR  assessment guidelines were not revised to reflect that role until development  of the significantly revised program documentation commenced in July 2009. 

2.17 As at 18 June 2009, draft ARC guidelines and terms of reference had  been developed for tabling at the committee’s first meeting on 25 June 2009.  On 22 June 2009, DEEWR recommended to the then Deputy Prime Minister  that she agree to authorise a nominated Deputy Secretary to undertake the role  of  approver.  The  ARC’s  first  meeting  occurred  after  the  department  had  submitted  its  brief,  but  before  Ministerial  agreement  had  been  received.  On 25 June 2009, the ARC agreed to terms of reference which made it clear it  was the role of the ARC to provide recommendations, but that the delegate  (approver) would

 make the final decisions (see Figure 2.1). 

                                                       37 Specifically, the May 2009 assessment guidelines stated that: ‘The assessment report and the comparative assessment ranking will be provided to the Interdepartmental Committee. The committee will review the assessment, scores

assigned and recommendations of the assessment teams, and take into account issues such as value for money, geographic location, funding amount requested and proposed outcomes. The committee will recommend the projects for funding under each stream, the funding amount and any special terms and conditions that should be attached to the project. Recommendations for funding under Local Jobs (excluding national heritage and bike paths) from the IDC will be put forward by DEEWR to the DEEWR Jobs Fund delegate.’

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Roles of the ARC and DEEWR decision-maker

First funding round

2.16 The  April  2009  program  guidelines  stated  that  recommendations  to  fund projects under the DEEWR‐administered components would be made by  DEEWR to ‘the Deputy Prime Minister or their Delegate’. DEEWR’s May 2009  assessment guidelines had stated that the projects to be recommended would  be  identified  by  the  inter‐departmental  committee37,  however  the  ARC  was  subsequently formed to formulate funding recommendations in relation to the  components  DEEWR  was  responsible  for  administering.  The  DEEWR  assessment guidelines were not revised to reflect that role until development  of the significantly revised program documentation commenced in July 2009. 

2.17 As at 18 June 2009, draft ARC guidelines and terms of reference had  been developed for tabling at the committee’s first meeting on 25 June 2009.  On 22 June 2009, DEEWR recommended to the then Deputy Prime Minister  that she agree to authorise a nominated Deputy Secretary to undertake the role  of  approver.  The  ARC’s  first  meeting  occurred  after  the  department  had  submitted  its  brief,  but  before  Ministerial  agreement  had  been  received.  On 25 June 2009, the ARC agreed to terms of reference which made  it clear it  was the role of the ARC to provide recommendations, but that the delegate  (approver) would make the final decisions (see Figure 2.1). 

                                                       37 Specifically, the May 2009 assessment guidelines stated that: ‘The assessment report and the comparative assessment ranking will be provided to the Interdepartmental Committee. The committee will review the assessment, scores

assigned and recommendations of the assessment teams, and take into account issues such as value for money, geographic location, funding amount requested and proposed outcomes. The committee will recommend the projects for funding under each stream, the funding amount and any special terms and conditions that should be attached to the project. Recommendations for funding under Local Jobs (excluding national heritage and bike paths) from the IDC will be put forward by DEEWR to the DEEWR Jobs Fund delegate.’

Program Establishment

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Figure 2.1

ARC Terms of Reference—Jobs Fund Round 1

The [Assessment] Review Committee is:

 Responsible for considering the capability and capacity of applicants to undertake projects in accordance with the Jobs Fund guidelines and for making recommendations to the Delegate on suitable proposals for funding under the Jobs Fund. The Terms of Reference for the Jobs Fund [Assessment] Review Committee are to:

 Consider matters relating to the assessment of proposals for funding under the Jobs Fund.

 Provide recommendations to the Delegate with respect to all applications for funding under the Jobs Fund.

 Ensure that the assessment process is conducted in a consistent and objective manner in line with Commonwealth Grant Guidelines and Commonwealth Grant Approval Processes and with regard to probity considerations. While informed by ARC advice, the Delegate will make the final decisions.

Source: Minutes of ARC meeting 25 June 2009 and endorsed ARC terms of reference.

2.18 The terms of reference did not identify who the delegate was, but the  ARC guidelines considered at the same meeting stated that the then Deputy  Prime Minister would undertake that role. The terms of reference identified as  chair of the ARC the same official that DEEWR had nominated to undertake  the role of approver or ‘delegate’, with the ARC noting that: 

… in line with other practice in the Department, the Departmental Delegate  could also chair meetings of ARC. 

2.19 On  6  July  2009,  the  then  Deputy  Prime  Minister  agreed  to  assign  decision‐making  authority  to  the  nominated  official.  However,  the  ARC’s  terms of reference and guidelines were not amended to reflect this change.  Accordingly,  the  documented  procedures  did  not  identify  how  the  Deputy  Secretary’s  role  as  chair  of  the  committee  that  was  to  provide  recommendations to the decision‐maker would be separated from the same  official’s role as the decision‐maker. The ARC’s recommendations for the first  round were communicated to the delegate through that official’s participation 

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in the ARC meetings that decided which projects should be recommended for  approval.38 In this respect, DEEWR advised ANAO that:  

There was no potential for a conflict of interest to arise here because the ARC  was not involved in the actual assessment process. The role of the ARC was to  consider  the  recommendations  made  by  independent  assessors.  ARC  deliberations, which the Delegate participated in, focused on considering the  recommendations,  not  reviewing  the  assessments  that  had  already  been  completed.39 

Second funding round

2.20 The ARC’s terms of reference for the second round were the same as for  the first round (see Figure 2.1), with the addition that the matters the ARC was  to  consider  included  eligibility  of  proponents.  The  program  documentation  endorsed  by  the  ARC  on  28 January  2010  stated  that  the  then  Minister  for  Employment Participation would be the approver, but that this was yet to be  confirmed. The ARC guidelines further noted that, should the Minister decide  not to be the approver, relevant provisions would be reviewed.  

2.21 DEEWR’s then Associate Secretary had chaired the ARC’s 21 December  2009 meeting and taken over the previous chair’s role as approver for the first  round, including the approval of eight additional p rojects on 7 January 2010.40  On 4 January 2010, internal advice was circulated advising that the Associate  Secretary had decided that: 

 irrespective of the Minister’s decision in relation to the role of approver,  the  Associate  Secretary  did  not  want  direct  involvement  in  the  assessment  process,  and  that  the  assessment  and  ranking  process  should be determined by other senior officials; and 

                                                       38 Further in this respect, projects were approved in three tranches. In each case, the approval was to be documented through an approval instrument, with an attached schedule identifying the relevant projects and funding. For the first

tranche of 13 projects approved on 10 July 2009 (of which eight were publically announced in July 2009), DEEWR was unable to provide ANAO with a signed approval instrument, advising that it had not been returned from the approver’s office. The department referred ANAO to the same official’s position as contact point on a brief advising the Minister of the approvals as providing confirmation the approval had been given. This is not an appropriate form in which to satisfy relevant obligations in relation to recording the approval of grants (as set out in FMA Regulation 12). For the second tranche of 125 projects approved on 31 July 2009 (incorporating re-approval of the original 13 projects), the department was able to provide a signed copy of the approval instrument but the relevant schedule was not attached. DEEWR referred ANAO to an attachment to a 4 August 2009 brief to the Minister, advising that it listed of the same projects and funding as had been included in the relevant schedule. Again, this was inadequate in terms of fulfilling the requirements of Regulation 12. The third approval instrument and schedule of 173 projects (incorporating the 125 projects previously approved, but with corrected funding amounts) signed on 14 August 2009 was held in DEEWR records. 39

The ARC and decision-making process for the first round is discussed at Chapter 3 of this report. 40 See further at paragraphs 3.75 to 3.83.

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in the ARC meetings that decided which projects should be recommended for  approval.38 In this respect, DEEWR advised ANAO that:  

There was no potential for a conflict of interest to arise here because the ARC  was not involved in the actual assessment process. The role of the ARC was to  consider  the  recommendations  made  by  independent  assessors.  ARC  deliberations, which the Delegate participated in, focused on considering the  recommendations,  not  reviewing  the  assessments  that  had  already  been  completed.39 

Second funding round

2.20 The ARC’s terms of reference for the second round were the same as for  the first round (see Figure 2.1), with the addition that the matters the ARC was  to  consider  included  eligibility  of  proponents.  The  program  documentation  endorsed  by  the  ARC  on  28 January  2010  stated  that  the  then  Minister  for  Employment Participation would be the approver, but that this was yet to be  confirmed. The ARC guidelines further noted that, should the Minister decide  not to be the approver, relevant provisions would be reviewed.  

2.21 DEEWR’s then Associate Secretary had chaired the ARC’s 21 December  2009 meeting and taken over the previous chair’s role as approver for the  first  round, including the approval of eight additional projects on 7 January 2010.40  On 4 January 2010, internal advice was circulated advising that the Associate  Secretary had decided that: 

 irrespective of the Minister’s decision in relation to the role of approver,  the  Associate  Secretary  did  not  want  direct  involvement  in  the  assessment  process,  and  that  the  assessment  and  ranking  process  should be determined by other senior officials; and 

                                                       38 Further in this respect, projects were approved in three tranches. In each case, the approval was to be documented through an approval instrument, with an attached schedule identifying the relevant projects and funding. For the first

tranche of 13 projects approved on 10 July 2009 (of which eight were publically announced in July 2009), DEEWR was unable to provide ANAO with a signed approval instrument, advising that it had not been returned from the approver’s office. The department referred ANAO to the same official’s position as contact point on a brief advising the Minister of the approvals as providing confirmation the approval had been given. This is not an appropriate form in which to satisfy relevant obligations in relation to recording the approval of grants (as set out in FMA Regulation 12). For the second tranche of 125 projects approved on 31 July 2009 (incorporating re-approval of the original 13 projects), the department was able to provide a signed copy of the approval instrument but the relevant schedule was not attached. DEEWR referred ANAO to an attachment to a 4 August 2009 brief to the Minister, advising that it listed of the same projects and funding as had been included in the relevant schedule. Again, this was inadequate in terms of fulfilling the requirements of Regulation 12. The third approval instrument and schedule of 173 projects (incorporating the 125 projects previously approved, but w ith corrected funding amounts) signed on 14 August 2009 was held in DEEWR records. 39

The ARC and decision-making process for the first round is discussed at Chapter 3 of this report. 40 See further at paragraphs 3.75 to 3.83.

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 he only required the opportunity to consider the recommendations in  briefings at appropriate stages of the process. 

2.22 The then Associate Secretary’s office subsequently advised that it had  been decided that a nominated Deputy Secretary41 would chair the ARC, but  that the Associate Secretary would have: 

...  an  overarching  interest  (hence  the  briefing  requests) ... [the  Associate  Secretary] would also need to be free of the committee in case the [Minister’s  Office] refers anything back to DEEWR for an independent review. 

2.23 This  approach  was  reflected  in  the  ARC  guidelines  endorsed  on  28 January  2010.  It  was  not  clear  from  the  endorsed  guidelines  as  to  the  capacity  in  which  the  then  Associate  Secretary  would  be  receiving  such  briefings when not a member of the ARC, given the role of the ARC to make  recommendations  to  the  decision‐maker  on  suitable  proposals  (with  the  decision‐maker still being identified at that time as the then Minister).  

2.24 Internal  departmental  advice  circulated  on  19  January  2010  advised  that  it  was  now  expected  that  the  then  Associate  Secretary  would  be  the  approver. The advice also c onfirmed the Associate Secretary’s earlier decision  that he did not want to chair the ARC. Instead, he only wanted one meeting  where the ARC would present its recommendations for sign off. This proposed  approach provided for greater separation between the respective roles of the  ARC  and  the  program  decision‐maker  than  the  arrangements  for  the  first  round  had  provided.  It  was  subsequently  confirmed  that  the  Minister  had  agreed to the then Associate Secretary performing the role of approver, with  the program documentation being amended to reflect that change.42 

Receiving applications to the first funding round 2.25 The announcement of the first funding round stated that applications  would close at 4:30pm EST on Friday, 22 May 2009. However, the program  guidelines published the same day provided contradictory advice suggesting  the Jobs Fund would be conducted through an open‐ended selection process.  Specifically, the program guidelines stated that: ‘The Australian Government  will  seek  submissions  for  projects  from  May  2009.  From  1  July  2009,  proponents may submit proposals at any time.’ The guidelines further stated: 

                                                       41 This position had replaced the position of the previous ARC chair and delegate for the first round. 42

The ARC and decision-making process for the second round is discussed in Chapter 4 of this report.

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Electronic copies are preferred, accompanied by one complete hard copy with  a signed Legal Authorisation Form which is included in Part A of the Proposal  for Funding Form. 

2.26 The application form provided the same advice and further advised  that: ‘Proposals not submitted in this format may not be considered. Proposals  not consistent with the guidelines may be rejected.’  

2.27 There  was  a  significant  response  to  the  first  call,  with  over  2800 proposals ultimately being accounted for in DEEWR’s records. As noted  at  paragraph  2.3,  DEEWR  exhibited  good  practice  in  establishing,  prior  to  applications  closing,  internal  guidelines  relating  to  the  procedures  to  be  followed in registering applications. DEEWR established a spreadsheet register  to track applications and the stream each had been allocated to for assessment.  In order to facilitate registration, the spreadsheet was a shared document able  to be accessed by multiple registering officials simultaneously.  

Acceptable form of application

2.28 DEEWR’s  originally  documented  registration  procedures  were  based  upon an expectation that applications would be received via email, as had been  requested in the program guidelines. Collectively, the documented procedures  provided that all proposals submitted to the Jobs Fund email address by the  closing  date  and  time  would  be  registered  and  provided  to  the   relevant  department  for  assessment.  However,  if  a  hard  copy  of  an  application  submitted  electronically  had  not  been  received,  it  would  be  requested  by  DEEWR, and the project would not be recommended until it was received. 

2.29 However,  that  approach  was  not  implemented  by  the  department.  Instead,  applications  were  generally  registered  only  upon  receipt  of  a  hard  copy,  with  the  Jobs  Fund  email  inbox  being  searched  at  that  time  for  any  equivalent  application.  Only  once  that  process  had  been  completed  was  attention  focussed  on  ensuring  all  applications  received  by  email  had  been  identified, with this latter process not commencing until July 2009.  

Decision not to assess applications received via email only

2.30 As noted, the May 2009 assessment guidelines incorporated procedures  for the registration of applications. As further noted (see paragraph 2.7), the  development of a revised and separate registration guidelines document (and  revised  assessment  guidelines)  commenced  in  July  2009.  Draft  registration  guidelines proposed to be considered by the ARC on 16 July 2009 retained the  same provisions relating to the registration and assessment of all proposals 

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Electronic copies are preferred, accompanied by one complete hard copy with  a signed Legal Authorisation Form which is included in Part A of the Proposal  for Funding Form. 

2.26 The application form provided the same advice and further advised  that: ‘Proposals not submitted in this format may not be considered. Proposals  not consistent with the guidelines may be rejected.’  

2.27 There  was  a  significant  response  to  the  first  call,  with  over  2800 proposals ultimately being accounted for in DEEWR’s records. As noted  at  paragraph  2.3,  DEEWR  exhibited  good  practice  in  establishing,  prior  to  applications  closing,  internal  guidelines  relating  to  the  procedures  to  be  followed in registering applications. DEEWR established a spreadsheet register  to track applications and the stream each had been allocated to for assessment. 

In order to facilitate registration, the spreadsheet was a shared document able  to be accessed by multiple registering officials simultaneously.  

Acceptable form of application

2.28 DEEWR’s  originally  documented  registration  procedures  were  based  upon an expectation that applications would be received via email, as had been  requested in the program guidelines. Collectively, the documented procedures  provided that all proposals submitted to the Jobs Fund em ail address by the  closing  date  and  time  would  be  registered  and  provided  to  the  relevant  department  for  assessment.  However,  if  a  hard  copy  of  an  application  submitted  electronically  had  not  been  received,  it  would  be  requested  by  DEEWR, and the project would not be recommended until it was received. 

2.29 However,  that  approach  was  not  implemented  by  the  department.  Instead,  applications  were  generally  registered  only  upon  receipt  of  a  hard  copy,  with  the  Jobs  Fund  email  inbox  being  searched  at  that  time  for  any  equivalent  application.  Only  once  that  process  had  been  completed  was  attention  focussed  on  ensuring  all  applications  received  by  email  had  been  identified, with this latter process not commencing until July 2009.  

Decision not to assess applications received via email only

2.30 As noted, the May 2009 assessment guidelines incorporated procedures  for the registration of applications. As further noted (see paragraph 2.7), the  development of a revised and separate registration guidelines document (and  revised  assessment  guidelines)  commenced  in  July  2009.  Draft  registration  guidelines proposed to be considered by the ARC on 16 July 2009 retained the  same provisions relating to the registration and assessment of all proposals 

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submitted to the Jobs Fund email address by the closing date and time as had  been set out in the original program documentation. 

2.31 The revised guidelines were not considered at the 16 July 2009 meeting,  with  ARC  members  to  review  the  documents  out  of  session  for  further  consideration  at  the  next  meeting.  A  paper  submitted  to  the  subsequent  meeting on 20 July 2009 (two months after applications closed) recommended  that  the  ARC  note  the  process  that  was  being  followed  for  applications  received in electronic format only. The ARC was advised that all hardcopy  proposals received had been checked to identify if they had an accompanying  electronic copy. Following that process, examination of remaining emails had  resulted in some further proposals (at that time, 30) being identified that had  only  been  received  via  email.  The  ARC  was  advised  that  that  it  would  be  necessary  to  contact  the  applicants  and  ask  them  to  submit  a  hard  copy.  The committee  was  advised  that,  given  the  deadline  to  complete  all  assessments, assessment of these new proposals had commenced, but that any  recommendation for funding by the ARC would be s ubject to receiving the  signed  legal  authorisation  from  the  applicant.  At  that  meeting,  the  ARC  decided that: 

 applications received in electronic form only would not be assessed43;  and 

 affected applicants were to be contacted to request a hard copy and to  be advised that, should a hard copy be received, it would be considered  in the second round of the Jobs Fund.44 

2.32 At the same meeting, ARC members agreed to provide out of session  comments regarding the draft revised registration and assessment guidelines.  There is no further record of ARC members’ consideration of the guidelines or  when the two documents were considered to have been finalised. However,  the registration guidelines were subsequently further amended to reflect the  approach taken, in which registration was generally initiated upon receipt of a 

                                                       43 The projects that had been added to the Jobs Fund first round register of applications as a result of this process were subsequently removed from the register. A separate register of applications received via email only was later

established in September 2009 (see paragraph 2.34). 44 The affected applications included examples in which the application submitted via email consisted of a scanned pdf document which included a signed legal authorisation form. There is no evidence of DEEWR considering, or seeking

advice in relation to, whether this form of signature was acceptable.

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hard copy.45 The ARC decision regarding electronic applications was closed on  22 July 2009 as ‘Action underway’, but affected applicants were not ultimately  contacted until October 2009 (see further at paragraphs 3.67 to 3.74). 

2.33 Following  the  conclusion  of  the  first  funding  round,  the  probity  reviewer identified the setting aside of applications received in electronic form  only  as  an  issue  DEEWR  should  address.  This  was  on  the  basis  that  the  published  program  guidelines  did  not  clearly  indicate  that  electronic  only  applications would be excluded. This advice was initially raised in discussions,  with further written advice on 15 September 2009. 

2.34 The department subsequently compiled a separate register of affected  applications which  ultimately  involved  some 235 applications  relating to all  competitive components of the Jobs Fund.46 Assessment of those applications  was  undertaken  subsequent  to  the  completion  of  the  relevant  selection  processes (see further at paragraphs 3.63 to 3.83). 

Closing date for lodgement of applications

2.35 As discussed, the announced closing date for applications to the first  round was 4:30pm on Friday, 22 May 2009. An extension to 29 May 2009 was  subsequently made available upon request for applicants in locations affected  by natural disasters occurring at the time.  

2.36 The  DEEWR  register  of  proposals  included  a  field  entitled   ‘date  proposal received’. As at 15 June 200947, the register identified 2598 individual  applications. Only 491 (19 per cent) of those were recorded as having been  received by 22 May 2009. The date of receipt was recorded as 24 May 2009 or  later  for  2098 applications  (81 per  cent)  and  was  blank  for  a  further  nine  applications. However, less than two per cent of projects were marked as not  being accepted into the first round. A reference to whether an exemption had  been provided was recorded in the register in respect to 46 projects, of which  four were identified as not having received an exemption. A further 21 projects  registered with receipt dates of between 9 and 11 June 2009 were identified as 

                                                       45 Specifically, the further revised guide now stated that all hard copy proposals received at the DEEWR surface mail address by the closing date and time would be registered. In this respect, for the majority of applications the hard copy

had been received after 22 May 2009, with the relevant applicants having submitted the application via email in order to meet the closing date—see paragraphs 2.35 to 2.39. 46 A further 19 applications received via email only were identified as relating to the non-competitive IEP stream for which

applications were not accepted (see further at paragraphs 2.42 to 2.43). 47 Applications received post-15 June 2009 were not included in the first round register (see further at paragraphs 2.40 to

2.41).

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hard copy.45 The ARC decision regarding electronic applications was closed on  22 July 2009 as ‘Action underway’, but affected applicants were not ultimately  contacted until October 2009 (see further at paragraphs 3.67 to 3.74). 

2.33 Following  the  conclusion  of  the  first  funding  round,  the  probity  reviewer identified the setting aside of applications received in electronic form  only  as  an  issue  DEEWR  should  address.  This  was  on  the  basis  that  the  published  program  guidelines  did  not  clearly  indicate  that  electronic  only  applications would be excluded. This advice was initially raised in discussions,  with further written advice on 15 September 2009. 

2.34 The department subsequently compiled a separate register of affected  applications which  ultimately  involved  some 235 applications  relating to all  competitive components of the Jobs Fund.46 Assessment of those applications  was  undertaken  subsequent  to  the  completion  of  the  relevant  selection  processes (see further at paragraphs 3.63 to 3.83). 

Closing date for lodgement of applications

2.35 As discussed, the announced closing date for applications to the first  round was 4:30pm on Friday, 22 May 2009. An extension to 29 May 2009 was  subsequently made available upon request for applicants in locations affected  by natural disasters occurring at the time.  

2.36 The  DEEWR  register  of  proposals  included  a  field  entitled   ‘date  proposal received’. As at 15 June 200947, the register identified 2598 individual  applications. Only 491 (19 per cent) of those were recorded as having been  received by 22 May 2009. The date of receipt was recorded as 24 May 2009 or  later  for  2098 applications  (81 per  cent)  and  was  blank  for  a  further  nine  applications. However, less than two per cent of projects were marked as not  being accepted into the first round. A reference to whether an exemption had  been provided was recorded in the register in respect to 46 projects, of which  four were identified as not having received an exemption. A further 21 projects  registered with receipt dates of between 9 and 11 June 2009 were identified as 

                                                       45 Specifically, the further revised guide now stated that all hard copy proposals received at the DEEWR surface mail address by the closing date and time would be registered. In this respect, for the majority of applications the hard copy

had been received after 22 May 2009, with the relevant applicants having submitted the application via email in order to meet the closing date—see paragraphs 2.35 to 2.39. 46 A further 19 applications received via email only were identified as relating to the non-competitive IEP stream for which

applications were not accepted (see further at paragraphs 2.42 to 2.43). 47 Applications received post-15 June 2009 were not included in the first round register (see further at paragraphs 2.40 to 2.41).

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having  been  accepted  by  the  then  DEWHA  for  consideration  in  the  quarantined heritage component.48 

2.37 This situation arose as a result of the date entered in the ‘date proposal  received’ field not reflecting the actual date on which an application had been  first received. The majority of applications had been submitted via email on or  before  22 May  200949,  with  a  hard  copy  being  dispatched  by  surface  mail.  Neither the guidelines nor any other program documentation stipulated the  date by which the requested hard copy was to be received. The Frequently  Asked  Questions  (FAQ)  document  published  by  DEEWR  on  19  May  2009  advised potential applicants that: 

All applicants must ensure their proposal is received by the Department of  Education, Employment and Workplace Relations, in its entirety, by 4.30pm on  22 May 2009.  

 if sending hard copy only, this must be received by the closing date  and time  

 if sending in electronic form, this must be received by the closing date  and time, and your signed hard copy should be posted/sent no later  than 22 May 2009. [ANAO emphasis] 

2.38 This  latter  advice  was  not  included  in  the  program  guidelines  or  application form. Nor was  a methodology for demonstrating compliance with  the provisions set out in the FAQ document incorporated into the registration  procedures. DEEWR advice to ANAO in this respect was as follows: 

As  the  Round  One  Guidelines  required  that  all applications  be  received  in  hard copy format, this was the date used for recording purposes. The majority  of applications were received and registered as hardcopy applications, so the  date in the registry is when DEEWR received the hardcopy application via  Australia Post. The email received, if one was received, may have been sent  before or after the hardcopy and accessed at a different time.  

Where  applications  were  only  received  in  electronic  format,  against  the  requirements of the Guidelines, these applications were registered after those  that  were  correctly  sent  in  hardcopy  format.  As  a  result  some  applications 

                                                       48 Applications to the heritage component were received through both the public call and a targeted call, the latter with an extended deadline of 12 June 2009. However, there was a lack of clarity regarding how that aspect was to be

administered—see ANAO Audit Report No.11 2012-13, op. cit., pp. 86-88. 49 The large volume of applications received via email on 22 May 2009 meant that a number of applications were not retrieved from the inbox until some days later.

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which were only received electronically, although received at an earlier date,  may not have been accessed for a period of time. 

2.39 This  approach  considerably  reduced  the  utility  of  the  register  as  a  record of the proposals received by the due date, which is an integral part of  the function proposal registers are expected to fulfil for a competitive grant  program.50 In addition, the applicants that had sought an extension, and the  acceptance  or  otherwise  of  that  request,  was  not  clearly  recorded  in  the  register.  In  this  respect,  ANAO  noted  various  anomalies  in  relation  to  the  determination of whether particular applications would be accepted.  

Clearly stating closing dates for the submission of applications

2.40 As discussed (see paragraph 2.25), the program guidelines published  on 18 April 2009 stated that applications could be submitted at any time from  1 July 2009. DEEWR did not seek to provide any alternative advice to potential  applicants in relation to whether this remained to be the case until the second  call for applications was announced on 5 November 2009.  

2.41 As a result, a number of organisations invested resources in developing  and submitting applications after the first round had closed, in the apparent  expectation their applications would be considered in due course.  For DEEWR,  this included 20 applications submitted between the SPBC’s 30 September 2009  decision to conduct a second round involving revised guidelines and the day  the second round was announced on 5 November 2009. DEEWR notified at  least  114 applicants  on  5 November  2009  that,  given  revised  guidelines  had  been issued, applicants who had submitted proposals after 22 May 2009 would  need to resubmit their applications if they wished to be considered.  

Allocation of applications to the appropriate stream

2.42 As discussed, DEEWR was responsible for allocating applications to the  most  appropriate  stream  for  assessment.  As  part  of  that  process,  a  total  of  232 applications  were  deemed  ineligible  for  consideration  under  the LJ  and  GCW  streams51  because,  based  on  the  proposal  register,  they  had  been 

                                                       50 In the absence of a register that reliably records the actual date of receipt, it would be expected that the individual file for each application would include contemporaneous documentation identifying the date of receipt. However, this was

not the case. The registration checklist asked the registration officer to confirm the form in which the application had been received and whether certain elements had been completed, but did not require the registration officer to record or validate the date of receipt. 51 This included 19 projects allocated to the IEP stream as part of the actions taken in July and September 2009 with respect to projects submitted via email that had not previously been registered (see footnote 46).

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which were only received electronically, although received at an earlier date,  may not have been accessed for a period of time. 

2.39 This  approach  considerably  reduced  the  utility  of  the  register  as  a  record of the proposals received by the due date, which is an integral part of  the function proposal registers are expected to fulfil for a competitive grant  program.50 In addition, the applicants that had sought an extension, and the  acceptance  or  otherwise  of  that  request,  was  not  clearly  recorded  in  the  register.  In  this  respect,  ANAO  noted  various  anomalies  in  relation  to  the  determination of whether particular applications would be accepted.  

Clearly stating closing dates for the submission of applications

2.40 As discussed (see paragraph 2.25), the program guidelines published  on 18 April 2009 stated that applications could be submitted at any time from  1 July 2009. DEEWR did not seek to provide any alternative advice to potential  applicants in relation to whether this remained to be the case until the second  call for applications was announced on 5 November 2009.  

2.41 As a result, a number of organisations invested resources in developing  and submitting applications after the first round had closed, in the apparent  expectation their applications would be considered in due course.  For DEEWR,  this included 20 applications submitted between the SPBC’s 30 September 2009  decision to conduct a second round involving revised guidelines and the day  the second round was announced on 5 November 2009. DEEWR notified at  least  114 applicants  on  5 November  2009  that,  given  revised  guidelines  had  been issued, applicants who had submitted proposals after 22 May 2009 would  need to resubmit their applications if they wished to be considered.  

Allocation of applications to the appropriate stream

2.42 As discussed, DEEWR was responsible for allocating applications to the  most  appropriate  stream  for  assessment.  As  part  of  that  process,  a  total  of  232 applications  were  deemed  ineligible  for  consideration  under  the LJ  and  GCW  streams51  because,  based  on  the  proposal  register,  they  had  been 

                                                       50 In the absence of a register that reliably records the actual date of receipt, it would be expected that the individual file for each application would include contemporaneous documentation identifying the date of receipt. However, this was

not the case. The registration checklist asked the registration officer to confirm the form in which the application had been received and whether certain elements had been completed, but did not require the registration officer to record or validate the date of receipt. 51 This included 19 projects allocated to the IEP stream as part of the actions taken in July and September 2009 with respect to projects submitted via email that had not previously been registered (see footnote 46).

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identified as seeking more than the $2 million maximum grant available under  those streams. Where those applications were infrastructure related, they were  allocated  to  the  IEP  stream,  for  which  there  was  no  financial  limit  on  individual  grants.  However,  all  such  applications  were  deemed  to  be  unsuccessful without being assessed on the basis the guidelines had stated that  the Australian Government would initiate projects under the IEP stream.52  

2.43 In September 2009, DEEWR sent letters to those 232 applicants advising  that their application was ineligible under the LJ and GCW streams due to the  amount  sought  and  there  was  no  application  process  for  the  IEP  stream.  Following  queries  from  a  number  of  applicants,  it  was  discovered  that  48 (21 per  cent)  of  the  232  applications  had  not,  in  fact,  sought  funding  exceeding  $2 million  on  a  GST  exclusive  basis  and  had  been  incorrectly  excluded from consideration under the relevant competitive components of the  Jobs Fund.53 Those applications were assessed between October and December  2009, after the relevant first round selection processes had been completed.54 

2.44 Other  anomalies  in  the  allocation  of  applications  to  the  most  appropriate  component  for  assessment  related  to  the  quarantined  heritage  component, for which specific  criteria were required to be addressed through a  dedicated section of the application form. Examples included: 

 at  least  three  projects  for  which  the  applicant  had  completed  the  heritage‐specific section, but which were not allocated to the heritage  component for assessment until September 2009 or later (by which time  the funding available had been exhausted); and  

 two applications that were allocated to the heritage component despite  the heritage‐related part of the application form not being completed  and which, therefore, had not addressed the heritage‐specific criteria. 

                                                       52 See further at ANAO Audit Report No.7, 2011-12, op. cit., pp. 70-75 and 118-135. 53

Grants were awarded on a GST exclusive basis, with any GST payable being funded through a separate appropriation. In relation to errors in the register relating to the amount of funding being sought by applicants, DEEWR’s advice to ANAO was as follows: ‘Due to the time constraints on the development time for Round One, no data base or electronic means of registering applications was developed. The information had to be entered manually into Excel for the large amount of applications received. The tight time constraints also meant that there were multiple people contributing to the registration spreadsheet, so initially human errors were hard to pick up. As incorrect information was found, it was corrected. However as the registry spreadsheet was not being used as an assessment tool, merely a tool to keep track of the application in the initial stages of the process, it was not a priority to check that all the dollar values were correct. The errors in the spreadsheet had no impact on the assessment process.’ 54

See further at paragraphs 3.63 to 3.74.

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After  being  advised  they  were  unsuccessful  under  the  heritage  component, both applicants submitted complaints.55 

2.45 The various errors and anomalies that arose in relation to the receipting  of applications submitted in response to the first call for proposals resulted in  applications being incorrectly excluded from the first round selection processes  for the relevant competitive components of the Jobs Fund.56 As is discussed  further at paragraphs 3.63 to 3.83, assessment processes of various types were  subsequently undertaken in respect to more than 260 projects (ten per cent of  first round applications), but this did not have a positive outcome for most  affected  applications.  This  situation  highlights  the  importance  of  grant  program guidelines clearly articulating the process by which applications are  to  be  submitted  to  a  competitive  grant  program.  A methodology  for  transparently  and  consistently  determining  whether  each  proposal  will  be  accepted  also  needs  to  be  documented  and  implemented  at  the  time  applications close in order to ensure all compliant applications are afforded the  same opportunity to participate in the competitive selection process. 

Receiving applications to the second funding round 2.46 For the second funding round, DEEWR took a number o f measures to  address the issues that had arisen under the first round application process.  In particular, the program guidelines clearly identified both the closing date  for applications and the form in which they were to be submitted. 

Compliant form of application

2.47 Separate application forms were developed for the second rounds of  the GCW and LJ streams respectively. This was necessary because the first of  the selection criteria established for the second round differed between the two 

                                                       55 Both complaints highlighted that, as they were aware their project was not likely to be eligible under the heritage component, the projects had been directed to the GCW stream and that this approach had been based on advice from

the relevant department and/or LEC. One applicant submitted the complaint to the then DEWHA and no further action was taken. The other applicant submitted the complaint to DEEWR, including through representations made by the local Federal Member, and the project was ultimately assessed under the second round of the GCW stream (see footnote 133). 56

This issue was also identified in ANAO’s earlier audits of the IEP stream and the two quarantined components of the Local Jobs stream—see ANAO Audit Report No.7 2011-12, op. cit., pp. 73-75; ANAO Audit Report No.27 2011-12, op. cit., p. 4; and ANAO Audit Report No.11 2012-13, op. cit., pp. 84-90.

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After  being  advised  they  were  unsuccessful  under  the  heritage  component, both applicants submitted complaints.55 

2.45 The various errors and anomalies that arose in relation to the receipting  of applications submitted in response to the first call for proposals resulted in  applications being incorrectly excluded from the first round selection processes  for the relevant competitive components of the Jobs Fund.56 As is discussed  further at paragraphs 3.63 to 3.83, assessment processes of various types were  subsequently undertaken in respect to more than 260 projects (ten per cent of  first round applications), but this did not have a positive outcome for most  affected  applications.  This  situation  highlights  the  importance  of  grant  program guidelines clearly articulating the process by which applications are  to  be  submitted  to  a  competitive  grant  program.  A methodology  for  transparently  and  consistently  determining  whether  each  proposal  will  be  accepted  also  needs  to  be  documented  and  implemented  at  the  time  applications close in order to ensure all compliant applications are afforded the  same opportunity to participate in the competitive selection process. 

Receiving applications to the second funding round 2.46 For the second funding round, DEEWR took a number o f measures to  address the issues that had arisen under the first round application process.  In particular, the program guidelines clearly identified both the closing date  for applications and the form in which they were to be submitted. 

Compliant form of application

2.47 Separate application forms were developed for the second rounds of  the GCW and LJ streams respectively. This was necessary because the first of  the selection criteria established for the second round differed between the two 

                                                       55 Both complaints highlighted that, as they were aware their project was not likely to be eligible under the heritage component, the projects had been directed to the GCW stream and that this approach had been based on advice from

the relevant department and/or LEC. One applicant submitted the complaint to the then DEWHA and no further action was taken. The other applicant submitted the complaint to DEEWR, including through representations made by the local Federal Member, and the project was ultimately assessed under the second round of the GCW stream (see footnote 133). 56

This issue was also identified in ANAO’s earlier audits of the IEP stream and the two quarantined components of the Local Jobs stream—see ANAO Audit Report No.7 2011-12, op. cit., pp. 73-75; ANAO Audit Report No.27 2011-12, op. cit., p. 4; and ANAO Audit Report No.11 2012-13, op. cit., pp. 84-90.

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streams, in order to reflect their respective focus. As a result, applicants were  able to apply to the stream they wished their proposal to be assessed under.57 

2.48 The other significant change in relation to the form of application was  that proposals were required to be submitted via email, with the guidelines  stating paper or faxed copies would not be accepted. The SPBC had decided on  30  September  2009  that  revised  guidelines  were  to  be  brought  forward  by  mid‐October  2009.  In  providing  draft  guidelines  to  the  then  Minister  for  Employment Participation on 15 October 2009, DEEWR advised that: 

The draft guidelines currently require proponents to submit two hard copies of  their proposal, based on experience from Round 1. However, the Department  is currently looking into an electronic submission and upload system which  may eliminate the need for hard copies.58 

2.49 Departmental  records  indicate  the  system  being  examined  was  software used to manage tender evaluations, which was found to be unsuitable  for  use  in  the  grants  environment.  Given  the  short  timeframe  available  for  finalising the program guidelines, DEEWR adapted the application forms to an  Excel s

preadsheet format that was to be submitted via email. Although these  arrangements resulted in a significantly less complex application process from  the department’s perspective59, there were some unintended consequences in  terms of the capacity for applicants to lodge applications. In this respect, the  August 2010 report of an internal audit of the second round stated that: 

... program management advised Internal Audit that they were aware of the  limitations of using Microsoft Excel 2003 for such purposes. For example, some  of the formatting and functionality of the application forms was lost when  applicants  accessed  the  forms  using  earlier  versions  of  Microsoft  Excel.  Applicants had advised program management during the application period  of significant problems with the proposal forms, such as the inability to view  all  of  their  responses  to  each  assessment  criteria  and  some  limitations  of  previous versions of Microsoft Excel. 

2.50 The application approach adopted by DEEWR was directed at avoiding  the  complexities  and  other  issues  that  had  arisen  as  a  result  of  asking 

                                                       57 ANAO noted one anomaly in this respect. A GCW application was approved under the LJ stream, but an assessment against the different LJ criterion was not undertaken—see paragraph 4.30. 58

This advice reflected an approach under which applications would be received in one form only, with the draft guidelines attached to this brief stating that electronic or faxed copies would not be accepted. 59 The use of macros to extract data from applications for assessment purposes also assisted the department in improving

the accuracy and cost-effectiveness of the data entry process.

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applicants to submit applications in two forms. However, having regard for  the known limitations of the electronic format being considered, an alternative  approach  may  have  been  to  promote  the  submission  of  applications  electronically without the need to also submit a hard copy, while not excluding  the option for applicants to submit their application in hard copy only. In this  respect,  another  limitation  of  the  approach  adopted  was  that  there  was  no  alternative application form available for use by people that were limited in  their capacity to utilise spreadsheets or access online facilities.60 

2.51 The internal audit identified that other areas within the department had  developed online application forms for use in a number of grant programs,  utilising  ‘smart  form’  technology  developed  by  another  department.  It  was  noted that this technology provided a number of advantages over spreadsheets  and did not require extensive timeframes for the development of an online  application  process  tailored  to  the  program  in  question.  In  response  to  the  internal  audit  report,  the  department  agreed  to  review  this  aspect  of  the  guidance provided within its grants manual and indicated that it was then in  the process of evaluating an IT project dealing with online grant application   processes. In April 2013, DEEWR advised ANAO that: 

In  financial  year  2010-11,  DEEWR  engaged  with  [a]  consulting  firm  to  document the various approaches and IT support systems for procurement  and grant activities across the department and provide recommendations on  better  ways  of  working  for  these  processes  where  possible.  In‐line  with  recommendations  made  in  the  initial  report,  a  scoping  study  was  commissioned to continue this investigation. The purpose of the scoping study  was  to  explore  possibilities  for  an  integrated  and  coordinated  approach  to  redeveloping  DEEWR’s  procurement  systems  and  related  workflows  to  enhance efficiency, compliance and reporting including key elements of grant  administration.  This  scoping  study  was  considered  at  DEEWR’s  Business  Management  Committee  where  they  supported  further  exploration  into  internal solutions as well as seek to better understand Commercial‐Off‐The‐ Shelf (COTS) offerings. 

The department approached market for a COTS grants management solution  using a two stage process; call for Expressions of Interest and then a Select 

                                                       60 The internal audit report noted that the approach adopted was inconsistent with the DEEWR Grants Manual that had been released in August 2009, which stated that application forms should be made available in both forms. The report

considered that, given the tight timeframes, the requirement to lodge electronically in a common format was acceptable, and further commented that, in light of the increasing use of online application processes and to improve DEEWR’s operational efficiency, there may be merit in reviewing the Grants Manual requirement. The report did not refer to equity of access considerations.

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applicants to submit applications in two forms. However, having regard for  the known limitations of the electronic format being considered, an alternative  approach  may  have  been  to  promote  the  submission  of  applications  electronically without the need to also submit a hard copy, while not excluding  the option for applicants to submit their application in hard copy only. In this  respect,  another  limitation  of  the  approach  adopted  was  that  there  was  no  alternative application form available for use by people that were limited in  their capacity to utilise spreadsheets or access online facilities.60 

2.51 The internal audit identified that other areas within the department had  developed online application forms for use in a number of grant programs,  utilising  ‘smart  form’  technology  developed  by  another  department.  It  was  noted that this technology provided a number of advantages over spreadsheets  and did not require extensive timeframes for the development of an online  application  process  tailored  to  the  program  in  question.  In  response  to  the  internal  audit  report,  the  department  agreed  to  review  this  aspect  of  the  guidance provided within its grants manual and indicated that it was then in  the

 process of evaluating an IT project dealing with online grant application  processes. In April 2013, DEEWR advised ANAO that: 

In  financial  year  2010-11,  DEEWR  engaged  with  [a]  consulting  firm  to  document the various approaches and IT support systems for procurement  and grant activities across the department and provide recommendations on  better  ways  of  working  for  these  processes  where  possible.  In‐line  with  recommendations  made  in  the  initial  report,  a  scoping  study  was 

commissioned to continue this investigation. The purpose of the scoping study  was  to  explore  possibilities  for  an  integrated  and  coordinated  approach  to  redeveloping  DEEWR’s  procurement  systems  and  related  workflows  to  enhance efficiency, compliance and reporting including key elements of grant  administration.  This  scoping  study  was  considered  at  DEEWR’s  Business  Management  Committee  where  they  supported  further  exploration  into  internal solutions as well as seek to better understand Commercial‐Off‐The‐ Shelf (COTS) offerings. 

The department approached market for a COTS grants management solution  using a two stage process; call for Expressions of Interest and then a Select 

                                                       60 The internal audit report noted that the approach adopted was inconsistent with the DEEWR Grants Manual that had been released in August 2009, which stated that application forms should be made available in both forms. The report

considered that, given the tight timeframes, the requirement to lodge electronically in a common format was a cceptable, and further commented that, in light of the increasing use of online application processes and to improve DEEWR’s operational efficiency, there may be merit in reviewing the Grants Manual requirement. The report did not refer to equity of access considerations.

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Tender  with  shortlisted  applicants.  However,  the  department  recently  cancelled  its  approach  to  market  for  a  grants  management  solution.  This  decision was made in‐light of a stocktake, which was initiated following the  most recent Machinery of Government change. This stocktake concluded that  there is an opportunity for only a small number of programs to move to an  automated  grant  management  system  which  did  not  represent  a  sufficient  value for money proposition to award a contract. 

The department is exploring the Microsoft Dynamics CRM Grants Accelerator  (MS CRM) solution which exists within DEEWR as opportunities arise. 

Late and non-conforming applications

2.52 In contrast to the approach adopted for the first round, a formal process  was established for the management of proposals not submitted in accordance  with  the  second  round  program  guidelines.61  Specifically,  a  meeting  of  the  ARC convened on 17 December 2009 (six days after applications closed) was  asked  to  agree  to  recommendations  to  accept  or  reject  non‐conforming  applications in a variety of categories.62 The ARC agreed that internal legal  advice should be obtained as to the extent of its discretion in deciding whether  to accept the  conforming proposals, and proponents were to be contacted to  seek an explanation, noting some had already indicated they had experienced  difficulties submitting the application through their internet service provider.  

2.53 At the subsequent ARC meeting on 21 December 2009, a number of  decisions  were  documented  regarding  the  actions  that  were  to  be  taken  in  relation  to  the  various  cohorts  of  non‐conforming  proposals.  Based  on  the  outcome of those inquiries and further internal legal and probity advice, the  ARC agreed to accept a number of projects.63 

Conclusion 2.54 For both rounds of the Jobs Fund, DEEWR developed a comprehensive  suite of internal documentation. However, particularly in the first round, the 

                                                       61 Registration guidelines for the second round were not finalised prior to applications closing on 11 December 2009. The final version held in DEEWR electronic records dated 19 January 2010 (some five weeks after applications closed)

was presented to the ARC for endorsement on 28 January 2010. 62 This included: applications received after the closing time and date due to size limitations and/or restrictions applied by applicants’ Internet Service Provider (ISP); submitted after the closing time with no apparent ISP issues; submitted on

the first round application form or in PDF format; for which the applicant was seeking an extension due to technical difficulties; and resubmitted, revised proposals. 63 A further project was accepted on 2 February 2010, after it was identified that the application had not been received due

to being blocked by the applicant’s internet service provider.

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originally  documented  procedures  were  not  fully  implemented.  Revised  program documentation to reflect the actual processes applied was developed  during,  and  subsequent  to,  the  selection  process.  In  that  context,  the  departmental  procedural  guides  were  not  established  and  maintained  in  a  manner  that  enabled  the  date  of  effect  of  the  original  version,  and  of  any  subsequent  revisions  to  authorised  procedures,  to  be  readily  identified.  The accountability  of  DEEWR’s  administration  of  future  grant  programs  would be enhanced if: 

 the roles and procedures actually undertaken reflected the procedural  guides established to govern the conduct of the selection process; and  

 the date of effect of any revisions to the documented procedures was  clearly identifiable such that the actions taken are able to be compared  to the approved procedures at the relevant point in time. 

2.55 The significant response to the first call for proposals gave rise to a  number  of  challenges  for  DEEWR  in  maintaining  an  orderly  process  for  receipting  and  registering  applications,  and  allocating  projects  to  the  most  appropriate  Jobs  Fund  component  for  assessment.  The  request  that  applications  be  submitted  via  both  email  and  in  hard  copy  increased  the  volume  of  material  to  be  handled  and  the  complexity  of  identifying  the  population o

f compliant applications that were to be assessed. Various aspects  of the approach taken to completing the register of proposals diminished its  capacity to provide an accurate and complete record of applications received.  In  addition,  the  originally  documented  procedures  for  registering  and  assessing  proposals  were  not  fully  implemented,  particularly  for  those  received via email.  

2.56 In this respect, it had been anticipated from the outset that there would  be more than one funding round under the Jobs Fund. The program guidelines  had also stated that proposals could be submitted at any time from 1 July 2009,  suggesting an open‐ended submission process. That advice was contradictory  to the closed round approach identified in the public announcement of the first  round  and  subsequently  applied  in  the  selection  process.  However,  it  influenced the approach DEEWR adopted to administering some proposals, in  that the department operated on an expectation that projects not considered in  the first round selection process could be considered in a subsequent round.  

2.57 As a result of these various factors, a number of errors and anomalies  arose that impacted upon whether certain applications submitted in response  to the first call for applications were considered through the same processe s 

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originally  documented  procedures  were  not  fully  implemented.  Revised  program documentation to reflect the actual processes applied was developed  during,  and  subsequent  to,  the  selection  process.  In  that  context,  the  departmental  procedural  guides  were  not  established  and  maintained  in  a  manner  that  enabled  the  date  of  effect  of  the  original  version,  and  of  any  subsequent  revisions  to  authorised  procedures,  to  be  readily  identified.  The accountability  of  DEEWR’s  administration  of  future  grant  programs  would be enhanced if: 

 the roles and procedures actually undertaken reflected the procedural  guides established to govern the conduct of the selection process; and  

 the date of effect of any revisions to the documented procedures was  clearly identifiable such that the actions taken are able to be compared  to the approved procedures at the relevant point in time. 

2.55 The significant response to the first call for proposals gave rise to a  number  of  challenges  for  DEEWR  in  maintaining  an  orderly  process  for  receipting  and  registering  applications,  and  allocating  projects  to  the  most  appropriate  Jobs  Fund  component  for  assessment.  The  request  that  applications  be  submitted  via  both  email  and  in  hard  copy  increased  the  volume  of  material  to  be  handled  and  the  complexity  of  identifying  the  population o

f compliant applications that were to be assessed. Various aspects  of the approach taken to completing the register of proposals diminished its  capacity to provide an accurate and complete record of applications received.  In  addition,  the  originally  documented  procedures  for  registering  and  assessing  proposals  were  not  fully  implemented,  particularly  for  those  received via email.  

2.56 In this respect, it had been anticipated from the outset that there would  be more than one funding round under the Jobs Fund. The program guidelines  had also stated that proposals could be submitted at any time from 1 July 2009,  suggesting an open‐ended submission process. That advice was contradictory  to the closed round approach identified in the public announcement of the first  round  and  subsequently  applied  in  the  selection  process.  However,  it  influenced the approach DEEWR adopted to administering some proposals, in  that the department operated on an expectation that projects not considered in  the first round selection process could be considered in a subsequent round.  

2.57 As a result of these various factors, a number of errors and anomalies  arose that impacted upon whether certain applications submitted in response  to the first call for applications were considered through the same processe s 

Program Establishment

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(and at the same time) as other projects competing for the available funding.  Specifically, more than 260 applications (some 10 per cent) were not assessed  until after the outcome of the competitive selection processes for the relevant  Jobs  Fund  components  had  been  finalised.  This  situation  significantly  impacted  upon  the  capacity  for  those  applications  to  receive  funding  consideration  in  the  same  manner  afforded  other  applications  submitted  in  response to the first call for proposals.64 

2.58 For the second round, DEEWR adopted various measures to address  issues  that  had  arisen  in  the  application  process  for  the  first  round  and  to  provide enhanced transparency and accountability over the management of  late and non‐conforming proposals. Collectively, these measures significantly  improved the accuracy, efficiency and effectiveness of the application process  and helped to largely eliminate the anomalies that had arisen in relation to the  first round. One area in which the equity and effectiveness of the application  process could have been further  improved was in relation to the format in  which applications were able to be submitted. In this respect, applicants were  limited to submitting applications in a specific spreadsheet format, via email.  This resulted in some applicants experiencing difficulties in completin g and  lodging applications by the required date and time. 

 

                                                       64 This issue is discussed further at paragraphs 3.63 to 3.83.

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3. First Round Selection Processes

This chapter examines the assessment and selection processes undertaken by DEEWR  in respect to the first round of the Jobs Fund.  

Introduction 3.1 The first round of the Jobs Fund was a competitive selection process.  The guiding principle for an appropriately conducted competitive, merit‐based  selection process is for all eligible, compliant applications to be assessed in the  same manner against the same criteria, and then ranked in priority order for  advice to the decision‐maker. In that context, ANAO examined the processes  applied under the first round in relation to: 

 assessing proposals against the published selection criteria; and 

 formulating funding recommendations based upon proposals’ relative  merit in terms of the program guidelines and objectives. 

3.2 Applications were assessed through a single process and allocated to  one  of  the  two  streams  as  part  of  that  process.  Accordingly,  although  the  LJ stream was the focus of this performance audit, the analysis in this chapter  is necessarily based on the collective selection process undertaken by DEEWR. 

Assessing proposals against published selection criteria 3.3 The targeted stimulus objective of the Jobs Fund was reflected in the  program guidelines stipulating that, to be considered, a project needed to meet  each of three gateway criteria and address at least one o f four target areas, as  set out in Table 3.1. Projects would also be subject to due diligence and risk  assessment ‘as appropriate’. The guidelines stated that each proposal would be  assessed on its merits, and in comparison to other proposals submitted at the  same time or previously. To guide the assessment process, DEEWR established  a  suite  of  documentation.  This  included  an  assessment  template  that  was  comprised of three parts, two of which involved a scoring methodology.  

Scored assessment elements

3.4 Assessments against the gateway criteria and target areas were scored  as set out in Table 3.1.  

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3. First Round Selection Processes

This chapter examines the assessment and selection processes undertaken by DEEWR  in respect to the first round of the Jobs Fund.  

Introduction 3.1 The first round of the Jobs Fund was a competitive selection process.  The guiding principle for an appropriately conducted competitive, merit‐based  selection process is for all eligible, compliant applications to be assessed in the  same manner against the same criteria, and then ranked in priority order for  advice to the decision‐maker. In that context, ANAO examined the processes  applied under the first round in relation to: 

 assessing proposals against the published selection criteria; and 

 formulating funding recommendations based upon proposals’ relative  merit in terms of the program guidelines and objectives. 

3.2 Applications were assessed through a single process and allocated to  one  of  the  two  streams  as  part  of  that  process.  Accordingly,  although  the  LJ stream was the focus of this performance audit, the analysis in this chapter  is necessarily based on the collective selection process undertaken by DEEWR. 

Assessing proposals against published selection criteria 3.3 The targeted stimulus objective of the Jobs Fund was reflected in the  program guidelines

 stipulating that, to be considered, a project needed to meet  each of three gateway criteria and address at least one of four target areas, as  set out in Table 3.1. Projects would also be subject to due diligence and risk  assessment ‘as appropriate’. The guidelines stated that each proposal would be  assessed on its merits, and in comparison to other proposals submitted at the  same time or previously. To guide the assessment process, DEEWR established  a  suite  of  documentation.  This  included  an  assessment  template  that  was  comprised of three parts, two of which involved a scoring methodology.  

Scored assessment elements

3.4 Assessments against the gateway criteria and target areas were scored  as set out in Table 3.1.  

First Round Selection Processes

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Table 3.1

Scoring methodology applied in the first funding round

Criteria set out in program guidelines Scoring scale

Projects must meet each of three gateway criteria:

1. Projects are in areas experiencing high

unemployment, a significant rise in

unemployment or vulnerability.

Projects allocated a score of between zero and five against each criterion based on ratings of:

 Very strong = 5  Strong = 4  Suitable/Adequate = 3 -----------------Criterion pass threshold

 Weak = 2

 Very poor = 1  Did not address = 0 Scores aggregated to maximum total score of 15.

2. Projects must be viable and ready to start.

3. Funding will not extend past 2010-11. Projects will be expected to be self-sufficient and/or not require Australian Government funding beyond 30 June 2011.

Projects must address at least one of the following four target areas:

A. Create jobs or retain people in jobs at risk due to the downturn.

Projects allocated a score of between zero and three against each target area based on ratings of:  Strong = 3  Average = 2 -------------Target area pass threshold

 Poor = 1

 None = 0

Scores not aggregated. Minimum of one pass score required.

B. Build skills for the future.

C. Build community infrastructure or improve community amenity which generates local jobs.

D. Provide seed funding for social enterprises to start up, maintain or expand services, generating jobs and improving community services.

Minimum assessment outcome required to be eligible for funding consideration

A score of 3 against each of the gateway criterion and a score of 2 against at least one target area.

Source: DEEWR assessment methodology for the first funding round of the Jobs Fund.

Gateway criteria assessments

3.5 The  three  gateway  criteria  were  identified  in  the  template  as  assessment  criteria,  with  the  matters  the  program  guidelines  had  advised  applicants  to  address  against  each  criterion  being  applied  as  sub‐criteria.  Assessors were provided with guidance to support consistency in evaluating  claims against a criterion, and were advised to specifically focus on: 

 for  the  first  criterion,  whether  the  project’s  location  was  particularly  impacted by the current economic and labour conditions; the claimed  number of jobs, traineeships and work experience places was realistic;  and the applicant had outlined a strategy for achieving those claims; 

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 for the second criterion, whether the applicant had demonstrated that it  had, or the capacity to recruit, staff with the appropriate skill set; and  the services to be provided through the project were additional to those  that would have occurred in the absence of funding; and 

 for  the  third  criterion,  whether  the  project  would  continue  beyond  30 June  2011  and  proposed  funding  arrangements  beyond  that  date  were realistic and sustainable. In particular, assessors were advised that  a high rating should be given to projects that continued past 2010-11  and  had  evidence  to  indicate  they  would  be  self‐sustaining,  had  an  ongoing  impact  on  the  community,  and  would  not  require  Commonwealth funding beyond 30 June 2011. 

Target area assessments

3.6 The  ‘project  eligibility’  section  of  the  assessment  template  related  to  scoring projects against each of the four target areas. Although the target areas  were set out under the heading ‘project eligibility’ in the program guidelines,  the guidelines also stated that preference would be given within each area to  projects that demonstrated one or more of 13 characteristics (see Table 3.2).   Table 3.2 Preferred project characteristics listed in Round 1 Jobs Fund guidelines

Within each of these four target areas preference will be given to projects which demonstrate one or more of the following:

 are ready-to-start immediately.

 support, create or retain jobs.

 assist a greater number of disadvantaged job seekers including Indigenous job seekers and have a greater likelihood of achieving outcomes for those jobs seekers.

 are in locations that have entrenched disadvantage or are vulnerable to the economic downturn.

 involve place-based initiatives which strengthen the community.

 provide job seekers with additional skills through training which maintains a connection with the labour market or develops connections to the community .

 assist apprentices/trainees who have been made redundant to complete their apprenticeships.

 have the potential to be sustainable and provide long-term employment opportunities for job seekers in areas of high unemployment.

 provide jobs for local businesses and communities and provide opportunities for youth, while also delivering positive environmental, heritage and social outcomes.

 involve well negotiated partnerships with employment services providers, local community organisations and relevant stakeholders needed to assist job seekers.

 demonstrate stakeholder consultation and work with the local community in designing and running projects.

 include a contribution of funds, or in kind contributions to supplement the amount sought in the project proposal.

 revitalise or create new infrastructure assets for community needs or have the potential to contribute to economically viable regions.

Source: Jobs Fund Guidelines, 18 April 2009, p. 3.

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 for the second criterion, whether the applicant had demonstrated that it  had, or the capacity to recruit, staff with the appropriate skill set; and  the services to be provided through the project were additional to those  that would have occurred in the absence of funding; and 

 for  the  third  criterion,  whether  the  project  would  continue  beyond  30 June  2011  and  proposed  funding  arrangements  beyond  that  date  were realistic and sustainable. In particular, assessors were advised that  a high rating should be given to projects that continued past 2010-11  and  had  evidence  to  indicate  they  would  be  self‐sustaining,  had  an  ongoing  impact  on  the  community,  and  would  not  require  Commonwealth funding beyond 30 June 2011. 

Target area assessments

3.6 The  ‘project  eligibility’  section  of  the  assessment  template  related  to  scoring projects against each of the four target areas. Although the target areas  were set out under the heading ‘project eligibility’ in the program guidelines,  the guidelines also stated that preference would be given within each area to  projects that demonstrated one or more of 13 characteristics (see Table 3.2).   Table 3.2 Preferred project characteristics listed in Round 1 Jobs Fund guidelines

Within each of these four target areas preference will be given to projects which demonstrate one or more of the following:

 are ready-to-start immediately.

 support, create or retain jobs.

 assist a greater number of disadvantaged job seekers including Indigenous job seekers and have a greater likelihood of achieving outcomes for those jobs seekers.

 are in locations that have entrenched disadvantage or are vulnerable to the economic downturn.

 involve place-based initiatives which strengthen the community.

 provide job seekers with additional skills through training which maintains a connection with the labour market or develops connections to the community .

 assist apprentices/trainees who have been made redundant to complete their apprenticeships.

 have the potential to be sustainable and provide long-term employment opportunities for job seekers in areas of high unemployment.

 provide jobs for local businesses and communities and provide opportunities for youth, while also delivering positive environmental, heritage and social outcomes.

 involve well negotiated partnerships with employment services providers, local community organisations and relevant stakeholders needed to assist job seekers.

 demonstrate stakeholder consultation and work with the local community in designing and running projects.

 include a contribution of funds, or in kind contributions to supplement the amount sought in the project proposal.

 revitalise or create new infrastructure assets for community needs or have the potential to contribute to economically viable regions.

Source: Jobs Fund Guidelines, 18 April 2009, p. 3.

First Round Selection Processes

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3.7 In large part, the factors the assessment template advised assessors to  consider  in  determining  a project’s  capacity  to  address  each  target  area  reflected  one  or  more  of  these  preferred  characteristics.  Some  of  the  characteristics were only considered relevant to one target area, whereas others  were identified as being relevant to up to three target areas. The first two of the  preferred characteristics (see Table 3.2) were not included in the factors to be  considered in relation to any target area as they duplicated matters taken into  account in relation to the gateway criteria.65  

Unscored assessment elements

3.8 The  remaining  part  of  the  assessment  template  related  to  the  due  diligence  and  risk  assessment  section  of  the  published  program  guidelines.  The guidelines  stated  that  aspects  that  ‘may  be  considered’  in  relation  to  overall viability included cost effectiveness. In this latter respect, the guidelines  stated: 

Applications will  need  to  demonstrate that  the  project  represents  value  for  money  for  the  Australian  Government.  In  assessing  value  for  money,  Departments will look at the outcomes of the project in light of the amount of  funding being sought. For example, Departments could  consider: 

 The number of long term and short term jobs being created, 

 Number of persons being trained, or 

 The number of users of a facility being built. 

Departments will take into consideration local community factors and project  variables in making this assessment. 

3.9 Other aspects identified in the program guidelines as potentially being  examined as part of the due diligence and risk assessment included ability to  complete  the  project  on  time  and  in  budget,  financial  viability  and  sustainability (with applicants to demonstrate how community benefits would  be maintained into the future). 

3.10 The  due  diligence  and  risk  assessment  section  of  the  assessment  template addressed some of the factors listed in the equivalent section of the  program guidelines. Specifically, assessors were to consider a project’s: 

                                                       65 A further duplication arose in relation to Target Area A, with the assessment template advising assessors to refer to the response provided in relation to the first gateway criterion for the information to be used in assessing whether

applications addressed this target area.

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 budget (including the extent of co‐funding);  

 project  plan  (particularly  capacity  to  complete  the  project  in  the  necessary timeframe);  

 business plan (including the extent to which a business case had been  demonstrated and consistency with the program objectives); and 

 project  linkages  (including  whether  the  project  involved  well  negotiated partnerships with organisations needed to assist job seekers  and/or stakeholder consultation and had local community support). 

3.11 While the template required assessors to describe a project’s strengths  and  weaknesses  against  each  element,  it  did  not  provide  for  scores  to  be  assigned, or for these aspects of each application to be otherwise rated using a  consistent scale. However, the training material provided to assessors advised  that  the  template  would  guide  an  analysis  of  these  elements  and  that  this  would then help assessors to make judgements in scoring against the gateway  criteria and target areas. In some cases, the due diligence and risk assessment  section was not completed, other than to state that the four areas had been  considered  and  taken  into  account  in  making  an  assessment  against  the  criteria. 

3.12 There was no provision for assessors to explicitly consider the other  aspects identified in the program guidelines as relating to due diligen ce and  risk assessment. In particular, the template did not provide for an assessment  of value for money, including cost effectiveness, to be incorporated into the  scores assigned to each project. 

Overall merit assessment

3.13 The  documented  assessment  methodology  provided  for  the  gateway  and target area scores to be added to provide a total score66, with all criteria  equally  weighted.  The  assessment  identified  whether  the  project  was  supported or not. In general, projects that achieved at least the minimum pass  score against the criteria (see Table 3.1) were ‘supported’. The assessment also  identified which of the DEEWR‐administered components the project related  to (that is, the GCW stream or the general component of the LJ stream). 

                                                       66 This aspect of the methodology was subsequently revised—see paragraphs 3.39 to 3.41.

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 budget (including the extent of co‐funding);  

 project  plan  (particularly  capacity  to  complete  the  project  in  the  necessary timeframe);  

 business plan (including the extent to which a business case had been  demonstrated and consistency with the program objectives); and 

 project  linkages  (including  whether  the  project  involved  well  negotiated partnerships with organisations needed to assist job seekers  and/or stakeholder consultation and had local community support). 

3.11 While the template required assessors to describe a project’s strengths  and  weaknesses  against  each  element,  it  did  not  provide  for  scores  to  be  assigned, or for these aspects of each application to be otherwise rated using a  consistent scale. However, the training material provided to assessors advised  that  the  template  would  guide  an  analysis  of  these  elements  and  that  this  would then help assessors to make judgements in scoring against the gateway  criteria and target areas. In some cases, the due diligence and risk assessment  section was not completed, other than to state that the four areas had been  considered  and  taken  into  account  in  making  an  assessment  against  the  criteria. 

3.12 There was no provision for assessors to explicitly consider the other  aspects identified in the program guidelines as relating to due diligen ce and  risk assessment. In particular, the template did not provide for an assessment  of value for money, including cost effectiveness, to be incorporated into the  scores assigned to each project. 

Overall merit assessment

3.13 The  documented  assessment  methodology  provided  for  the  gateway  and target area scores to be added to provide a total score66, with all criteria  equally  weighted.  The  assessment  identified  whether  the  project  was  supported or not. In general, projects that achieved at least the minimum pass  score against the criteria (see Table 3.1) were ‘supported’. The assessment also  identified which of the DEEWR‐administered components the project related  to (that is, the GCW stream or the general component of the LJ stream). 

                                                       66 This aspect of the methodology was subsequently revised—see paragraphs 3.39 to 3.41.

First Round Selection Processes

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3.14 DEEWR  adopted  a  number  of  measures  to  promote  the  quality  and  consistency of the assessments undertaken. In addition to the development of  assessment guidelines and templates and associated training, moderators were  responsible  for  overseeing  the  consistency  and  quality  of  assessments.  A quality  assurance  team  was  responsible  for  reviewing  a  sample  of  assessments to ensure all relevant criteria were appropriately assessed. 

ARC deliberative process

3.15 Following the moderated assessment process, projects were considered  by  the  ARC  to  determine  which  would  be  recommended  for  approval.  Projects were not submitted to the ARC for decision in a single, ranked list  based on the outcome of the assessment process. Instead, the ARC deliberative  process involved a series of 25 formal meetings conducted over the seven week  period  from  25  June  2009  to  13 August  2009.  Projects  were  considered  in  groups at each meeting based upon the PEA they were located in. The projects  considered at each meeting were listed in order of their respective aggregate  gateway criteria scores, with the ARC then making decisions in relation to each  project  as  to  whether  it  merited  funding.  The  ARC  had  access  to  the  assessment spreadsheet identifying the scores of all applications assessed to  date, but the r anked presentation of projects for consideration at a meeting did  not  include  reference  to  how  the  scores  of  the  projects  being  considered  compared to the rest of the competing projects. 

3.16 A process was also implemented by which the ARC could request a  review  of  a  project’s  scores.  The  May  2009  assessment  guidelines  had  not  referred to the ARC or provided for this score review process, but the revised  version developed in July 2009 (see paragraph 2.7) incorporated reference to  the ARC, together with new sections setting out roles for ‘adjudication teams’  and ‘review teams’. Adjudication was to occur when the assessment team and  moderator could not agree, or at the request of assessment manager or the  ARC;  and  reviews  were  to  occur  at  the  express  request  of  the  ARC.67  In  a  number  of  cases,  the  ARC  initially  identified  projects  as  a  possibility  for  funding subject to further clarification and/or a score review, with subsequent 

                                                       67 The role of the adjudication team was to determine the point of disagreement between the assessment team and moderator and reassess the application if required. The role of the review team was to determine the point of

inconsistency between the assessment of the application to be reviewed and that of other applications. In undertaking their respective roles, these teams were to consider whether: the assessment had considered all relevant material and been conducted in accordance with the guidelines; the decision had been justified appropriately; and was consistent with assessment of other applications.

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meetings  reaching  a  final  conclusion  as  to  whether  the  project  should  be  recommended. The capacity to seek score reviews was primarily utilised in  respect to projects the ARC saw as meritorious, but which had not received the  necessary pass scores, or which the ARC had agreed to recommend subject to  confirmation they had met the minimum thresholds.68 

3.17 The  ARC  deliberative  process  was  generally  well  documented,  with  agenda papers and minutes being maintained in relation to each meeting, and  associated action items or communications with applicants being undertaken  in accordance with appropriate protocols. The minutes of each ARC meeting  incorporated a brief statement of the reason for decision made in respect to  individual projects. The department also maintained a spreadsheet recording  the projects considered at each meeting.  

Ranking of competing projects

3.18 The first round of the Jobs Fund was significantly oversubscribed, with  applications  seeking  $1.5 billion  being  assessed  by  DEEWR.  However,  the  general  quality  of  applications  in  addressing  the  program  guidelines,  as  reflected  in  the  assessments,  was  not  high.  Specifically,  following  the  application of all score adjustments resulting from reviews and adjudications  sought  by  the  ARC,  final  assessment  scores  were  recorded  for  over  1600 projects.  Of  those,  405  projects  (25  per  cent)   were  eligible  for  consideration,  having  achieved  at  least  minimum  pass  scores  against  the  selection  criteria.  The  remaining  projects  (75 per  cent)  failed  to  meet  the  minimum  requirements.  Of  the  405  eligible  projects,  173 (43 per  cent)  were  approved (64 under LJ stream and 109 under GCW).  

3.19 In that context, the ARC exhibited awareness of the need to incorporate  consideration  of  overall  merit  in  making  decisions  in  relation  to  individual  projects, including cost‐effectiveness measures. The ARC recorded a decision  that each project would or would not be recommended, generally based upon  a view that the project did or did not provide value for money.  

3.20 However, the ARC did not seek to explicitly demonstrate the relative  merits of competing proposals. For example, of the more than 1600 projects in  respect to which an ARC decision was recorded, reference to the merits of a 

                                                       68 More broadly, scores were adjusted to reflect a policy decision taken by the ARC’s 8 July 2009 meeting that all projects in a PEA would receive at least a pass score against the first gateway criterion requiring that projects be in areas of high

or increasing unemployment or vulnerability.

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meetings  reaching  a  final  conclusion  as  to  whether  the  project  should  be  recommended. The capacity to seek score reviews was primarily utilised in  respect to projects the ARC saw as meritorious, but which had not received the  necessary pass scores, or which the ARC had agreed to recommend subject to  confirmation they had met the minimum thresholds.68 

3.17 The  ARC  deliberative  process  was  generally  well  documented,  with  agenda papers and minutes being maintained in relation to each meeting, and  associated action items or communications with applicants being undertaken  in accordance with appropriate protocols. The minutes of each ARC meeting  incorporated a brief statement of the reason for decision made in respect to  individual projects. The department also maintained a spreadsheet recording  the projects considered at each meeting.  

Ranking of competing projects

3.18 The first round of the Jobs Fund was significantly oversubscribed, with  applications  seeking  $1.5 billion  being  assessed  by  DEEWR.  However,  the  general  quality  of  applications  in  addressing  the  program  guidelines,  as  reflected  in  the  assessments,  was  not  high.  Specifically,  following  the  application of all score adjustments resulting from reviews and adjudications  sought  by  the  ARC,  final  a ssessment  scores  were  recorded  for  over  1600 projects.  Of  those,  405  projects  (25  per  cent)  were  eligible  for  consideration,  having  achieved  at  least  minimum  pass  scores  against  the  selection  criteria.  The  remaining  projects  (75 per  cent)  failed  to  meet  the  minimum  requirements.  Of  the  405  eligible  projects,  173 (43 per  cent)  were  approved (64 under LJ stream and 109 under GCW).  

3.19 In that context, the ARC exhibited awareness of the need to incorporate  consideration  of  overall  merit  in  making  decisions  in  relation  to  individual  projects, including cost‐effectiveness measures. The ARC recorded a decision  that each project would or would not be recommended, generally based upon  a view that the project did or did not provide value for money.  

3.20 However, the ARC did not seek to explicitly demonstrate the relative  merits of competing proposals. For example, of the more than 1600 projects in  respect to which an ARC decision was recorded, reference to the merits of a 

                                                       68 More broadly, scores were adjusted to reflect a policy decision taken by the ARC’s 8 July 2009 meeting that all projects in a PEA would receive at least a pass score against the first gateway criterion requiring that projects be in areas of high

or increasing unemployment or vulnerability.

First Round Selection Processes

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project  relative  to  other  projects  was  included  for  42 projects  (less  than  three per cent).69 In particular, the ARC deliberative process did not result in a  final merit ranking of the eligibly‐scored projects, either overall or within each  stream. In this respect, 63 per cent of projects for which an ARC decision was  recorded were identified in committee minutes as having been considered at  only one of its 25 meetings, including 98 (57 per cent) of the 173 approved  projects. 

3.21 The capacity for the documented selection process to demonstrate that  the 173 approved projects were the most meritorious was diminished by: 

 the adoption of an approach by  which projects  were not considered  through a single selection process, but rather in tranches (see further at  paragraphs 3.22 to 3.38); and 

 the design of the selection criteria and associated scoring and ranking  methodology (see further at paragraphs 3.39 to 3.62). 

Consideration of competing applications in tranches 3.22 Despite the Jobs Fund being conducted as a competitive grant program,  from the outset DEEWR had intended that some proposals would be approved  prior  to  the  assessment  of  all  competi ng  applications  being  completed.  Specifically,  DEEWR’s  May  2009  internal  assessment  guidelines  stated  as  follows: 

Proposals  with  the  highest  priority  will  be  assessed  first.70  Proposals  not  assigned  a  priority  will  be  assessed  as  the  Jobs  Fund  program  area  has  capacity. They may be assessed after the higher priority proposals have had  funding agreements signed. 

3.23 At the commencement of the ARC deliberative process, the intention  was to announce projects in two tranches, with the first to be approved by  1 July  2009,  and  the  second  by  28  July  2009.  DEEWR  had  first  proposed  a  phased  approach  in  a  brief  provided  to  the  then  Minister  for  Employment 

                                                       69 This comprised: 21 projects for which the documented deliberations included reference to the committee’s preference between applications submitted by the same applicant; three projects that included reference to the project’s relative

merit compared to others in the same PEA; 17 projects that included a general reference to other projects having higher merit; and one project for which the documented deliberations referred to the project in terms of its relative merit in relation to both the other projects from the same applicant and other projects in the same PEA. 70

Proposals were to be prioritised on the basis of whether all questions had been addressed sufficiently to progress to the next stage; the project location; commencement date; and the number of jobs and traineeships created and retained in proportion to funding amount sought.

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Participation  on  19  May  2009,  which  advised  there  was  an  opportunity  to  coincide  the  announcement  of  approved  projects  with  the  conduct  of  Jobs  Forums.  The  department  advised  the  Minister  that,  following  a  series  of  forums in April and May 2009 in the initial seven PEAs, additional forums  were proposed for July/August 2009, and that: 

This  timing  will  allow  the  first  tranche  of  Jobs  Fund  applications  to  be  developed  and  assessed  in  June  for  possible  announcement  in  early  July.  During  this  time  DEEWR  will  also  be  working  with  communities  and  proponents on further developing promising proposals which were submitted  but required further work before recommendation for funding. Conducting  the  Jobs  Forums  in  July/August  will  allow  for  acknowledgement  of  these  projects with communities and for more constructive discussions building on  the successful ideas already put forward for funding. 

3.24 On  16 June  2009,  DEEWR  advised  the  Minister  of  the  proposed  timeframe for announcing the two tranches and further advised that: 

It  is  aimed  to  have  sufficient  proposals  assessed  to  allow  for  the  recommendation of a [sic] least one project per priority area to be announced  in the first Tranche.71  

3.25 The  methodology  for  selecting  a  first  tranche  proposed  by  the  ARC  included  r eference  to  projects  that  had  scored  highly  in  certain  areas.72  However, unless provided for in the program guidelines (which the Jobs Fund  guidelines did not), it is inconsistent with the effective conduct of competitive  grant  programs  to  take  funding decisions  before  all  applications  have  been  assessed. The Jobs Fund guidelines had also made no reference to the defined  PEAs;  instead  identifying  the  broader  requirement  (as  the  first  gateway  criterion)  for  projects  to  be  in  an  area  experiencing  high  or  increasing  unemployment or vulnerability.73 DEEWR has advised ANAO that: 

                                                       71 This advice had not identified an intention to prioritise projects in PEAs ahead of, and to the exclusion of, other applications in the first instance (see further at paragraphs 3.35 to 3.38). 72

The ARC agreed that key considerations in the first tranche would be whether projects had scored highly against being viable and ready to start, and numbers of jobs created and where there was less emphasis on infrastructure since this was being well covered in other components of the stimulus package. 73

The original DEEWR assessment guidelines stated that priority would be given to projects in regions experiencing high levels of disadvantage and most affected by job losses, and proposals were not limited to the identified priority areas. The Frequently Asked Questions (FAQ) document published by DEEWR on 19 May 2009 similarly advised that: ‘There is no specific Jobs Fund funding allocations to states or priority areas. Each Jobs Fund proposal will be assessed on its merits. Proposals that most appropriately meet the Jobs Fund eligibility criteria, as set out in the Jobs Fund guidelines, will be the projects most likely to receive funding.’ However, the FAQ also provided the contradictory advice that: ‘Preference will be given to the priority areas, but Jobs Fund proposals are not limited to these areas.’ [ANAO emphasis]

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Participation  on  19  May  2009,  which  advised  there  was  an  opportunity  to  coincide  the  announcement  of  approved  projects  with  the  conduct  of  Jobs  Forums.  The  department  advised  the  Minister  that,  following  a  series  of  forums in April and May 2009 in the initial seven PEAs, additional forums  were proposed for July/August 2009, and that: 

This  timing  will  allow  the  first  tranche  of  Jobs  Fund  applications  to  be  developed  and  assessed  in  June  for  possible  announcement  in  early  July.  During  this  time  DEEWR  will  also  be  working  with  communities  and  proponents on further developing promising proposals which were submitted  but required further work before recommendation for funding. Conducting  the  Jobs  Forums  in  July/August  will  allow  for  acknowledgement  of  these  projects with communities and for more constructive discussions building on  the successful ideas already put forward for funding. 

3.24 On  16 June  2009,  DEEWR  advised  the  Minister  of  the  proposed  timeframe for announcing the two tranches and further advised that: 

It  is  aimed  to  have  sufficient  proposals  assessed  to  allow  for  the  recommendation of a [sic] least one project per priority area to be announced  in the first Tranche.71  

3.25 The  methodology  for  selecting  a  first  tranche  proposed  by  the  ARC  included  r eference  to  projects  that  had  scored  highly  in  certain  areas.72  However, unless provided for in the program guidelines (which the Jobs Fund  guidelines did not), it is inconsistent with the effective conduct of competitive  grant  programs  to  take  funding  decisions  before  all  applications  have  been  assessed. The Jobs Fund guidelines had also made no reference to the defined  PEAs;  instead  identifying  the  broader  requirement  (as  the  first  gateway  criterion)  for  projects  to  be  in  an  area  experiencing  high  or  increasing  unemployment or vulnerability.73 DEEWR has advised ANAO that: 

                                                       71 This advice had not identified an intention to prioritise projects in PEAs ahead of, and to the exclusion of, other applications in the first instance (see further at paragraphs 3.35 to 3.38). 72

The ARC agreed that key considerations in the first tranche would be whether projects had scored highly against being viable and ready to start, and numbers of jobs created and where there was less emphasis on infrastructure since this was being well covered in other components of the stimulus package. 73

The original DEEWR assessment guidelines stated that priority would be given to projects in regions experiencing high levels of disadvantage and most affected by job losses, and proposals were not limited to the identified priority areas. The Frequently Asked Questions (FAQ) document published by DEEWR on 19 May 2009 similarly advised that: ‘There is no specific Jobs Fund funding allocations to states or priority areas. Each Jobs Fund proposal will be assessed on its merits. Proposals that most appropriately meet the Jobs Fund eligibility criteria, as set out in the Jobs Fund guidelines, will be the projects most likely to receive funding.’ However, the FAQ also provided the contradictory advice that: ‘Preference will be given to the priority areas, but Jobs Fund proposals are not limited to these areas.’ [ANAO emphasis]

First Round Selection Processes

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The  rationale  for  adopting  this  approach  was  a  government  decision  (as reflected in cabinet documents and subsequently in the gateway criteria).  This allowed for disadvantaged regions that were not in PEAs to be eligible for  funding. It was also in recognition of the staged rollout of PEAs—at the time  the Jobs Fund guidelines were issued only 7 of the PEAs had been identified.74 

3.26 Based on the assessment methodology adopted by DEEWR, the extent  to which each project satisfied the program priorities relative to other projects  should have been reflected in the scored assessments, such that prioritising  certain applications should not have been necessary in order to maximise the  achievement of program objectives. 

First tranche of project approvals: prioritisation of proposals from nominated priority employment areas

3.27 At its first meeting on 25 June 2009, the ARC was advised that, of the  1619 applications then allocated to DEEWR for assessment, 32 per cent (515)  were  from  the  nine  PEAs  that  had  been  announced  to  that  time.75  While assessments had been completed for around 25 per cent of applications,  57 per cent  of  the  515  applications  in  the  nine  PEAs  had  been  assessed  compared to around 15 per cent of the remaining 1104 applications. 

3.28 At  that  meeting,  the  ARC  considered  the   51  projects  located  in  the  Canterbury‐Bankstown  and  South  Western  Sydney  PEA  that  had  been  assessed to that time, agreeing to recommend three, with a further seven being  subject to further consideration. It was also decided that assessing remaining  projects in that area, and projects in the North West/Northern Tasmania and  South  Eastern  Melbourne  PEAs,  would  be  prioritised  to  allow  for  the  announcement of approved projects to coincide with Jobs Expos in those areas  scheduled  in  July  2009.  Consideration  of  projects  in  areas  affected  by  the  February  2009  Victorian  bushfires  was  also  prioritised  as  part  of  this  first  tranche.76 

3.29 Over  the  course  of  its  next  eight  meetings,  the  ARC  considered  a  further  195  applications  identified  as  being  located  in  those  four  areas 

                                                       74 See ANAO Audit No.7 2011-12, op. cit., pp. 66-67. 75

See paragraph 1.5. 76 In this respect, the program guidelines stated that: ‘Urgent infrastructure project proposals relating to external shock events (such as bushfires, floods or other natural disasters) can be proposed by state, territory or local governments for

consideration for funding under the Jobs Fund.’ However, the guidelines did not provide for such proposals to be prioritised compared to other applications received.

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(including 11 projects subsequently identified as being in a different PEA or a  non‐priority  employment  area).  On  10  July  2009,  the  delegate  formally  approved $12.6 million for a first tranche of 13 projects77, with the department  advising the then Minister for Employment Participation that: 

DEEWR has prioritised the assessment of applications of the highest priority  areas  to  coincide  with  the  forthcoming  Jobs  Forums.  The  assessment  of  applications  for  projects  in  North  West/Northern  Tasmania,  South  Eastern  Melbourne  and  Canterbury  Bankstown  and  South  Western  Sydney  priority  areas and the area affected by the Victorian Bushfires has been finalised. You  will be briefed on the outcomes of the remaining priority areas and proposals  for the rest of Australia at the end of July ... These projects have been approved  on the basis that they provide value for money in terms of creating local green  and community jobs and training opportunities.  

3.30 In this respect, at the time approval was given to these 13 projects, the  ARC had considered 246 projects (15 per cent of applications). In that context,  the  ARC  and  delegate  were  not  in  a  position  to  determine  whether  those  13 projects  were  among  the  most  meritorious  o f  the  competing  proposals,  either  across  the  full  population  of  projects  being  assessed  or  within  the  LJ stream  under  which  they  were  initially  approved.78  Nor  were  they  in  a  position  to  determine  whether  they  were  the  most  meritorious  within  the  relevant PEA. Contrary to the advice to the Minister, assessment of projects in  the  four  areas  had  not  been  finalised,  with  an  additional  39 applications  in  those areas not being considered by the ARC until after the first tranche was  approved (including two LJ projects assessed after 10 July 2009).  

3.31 At  least  eight  of  the  13  projects  approved  in  the  first  tranche  were  publically announced prior to the first round selection process being initially  completed on 31 July 2009, with a further project being announced prior to the  full  completion  of  the  approval  processes  on  14  August  2009.79  However, 

                                                       77 At that time, the ARC had agreed to recommend 27 projects but only the 13 projects then identified as relating to the LJ stream were approved, due to the requirement to consult with the Get Communities Working Advisory Council.

Of those 13 projects, 10 had originally been allocated to GCW, but the ARC had decided they should be allocated to the LJ stream. In one case, a project originally assessed as an LJ project was re-allocated to GCW at the ARC’s 2 July 2009 meeting, but then returned to LJ at the 10 July 2009 meeting. Following approval, this project and one other of the 13 included in the first tranche were re-allocated back to the GCW stream at the ARC’s next meeting on 16 July 2009. 78

The 13 projects approved in the first tranche had achieved aggregate gateway (assessment) criteria scores ranging from the minimum pass score of nine out of 15 (five projects) to 13 (two projects). The average grant approved for these 13 projects of $913 081 (at an average cost per paid employment outcome of $17 585) was 21 per cent more than the average grant of $752 938 for the remaining 160 projects funded under the first round (at an average cost per paid employment outcome of $16 278). 79

The first eight projects were announced by the then Minister for Employment Participation in the context of Jobs Forums held in the relevant PEAs between 14 and 17 July 2009. A further project in the Victorian bushfire area was announced on 3 August 2009.

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(including 11 projects subsequently identified as being in a different PEA or a  non‐priority  employment  area).  On  10  July  2009,  the  delegate  formally  approved $12.6 million for a first tranche of 13 projects77, with the department  advising the then Minister for Employment Participation that: 

DEEWR has prioritised the assessment of applications of the highest priority  areas  to  coincide  with  the  forthcoming  Jobs  Forums.  The  assessment  of  applications  for  projects  in  North  West/Northern  Tasmania,  South  Eastern  Melbourne  and  Canterbury  Bankstown  and  South  Western  Sydney  priority  areas and the area affected by the Victorian Bushfires has been finalised. You  will be briefed on the outcomes of the remaining priority areas and proposals  for the rest of Australia at the end of July ... These projects have been approved  on the basis that they provide value for money in terms of creating local green  and community jobs and training opportunities.  

3.30 In this respect, at the time approval was given to these 13 projects, the  ARC had considered 246 projects (15 per cent of applications). In that context,  the  ARC  and  delegate  were  not  in  a  position  to  determine  whether  those  13 projects  were  among  the  most  meritorious  o f  the  competing  proposals,  either  across  the  full  population  of  projects  being  assessed  or  within  the  LJ stream  under  which  they  were  initially  approved.78  Nor  were  they  in  a  position  to  determine  whether  they  were  the  most  meritorious  within  the  relevant PEA. Contrary to the advice to the Minister, assessment of projects in  the  four  areas  had  not  been  finalised,  with  an  additional  39 applications  in  those areas not being considered by the ARC until after the first tranche was  approved (including two LJ projects assessed after 10 July 2009).  

3.31 At  least  eight  of  the  13  projects  approved  in  the  first  tranche  were  publically announced prior to the first round selection process being initially  completed on 31 July 2009, with a further project being announced prior to the  full  completion  of  the  approval  processes  on  14  August  2009.79  However, 

                                                       77 At that time, the ARC had agreed to recommend 27 projects but only the 13 projects then identified as relating to the LJ stream were approved, due to the requirement to consult with the Get Communities Working Advisory Council.

Of those 13 projects, 10 had originally been allocated to GCW, but the ARC had decided they should be allocated to the LJ stream. In one case, a project originally assessed as an LJ project was re-allocated to GCW at the ARC’s 2 July 2009 meeting, but then returned to LJ at the 10 July 2009 meeting. Following approval, this project and one other of the 13 included in the first tranche were re-allocated back to the GCW stream at the ARC’s next meeting on 16 July 2009. 78

The 13 projects approved in the first tranche had achieved aggregate gateway (assessment) criteria scores ranging from the minimum pass score of nine out of 15 (five projects) to 13 (two projects). The average grant approved for these 13 projects of $913 081 (at an average cost per paid employment outcome of $17 585) was 21 per cent more than the average grant of $752 938 for the remaining 160 projects funded under the first round (at an average cost per paid employment outcome of $16 278). 79

The first eight projects were announced by the then Minister for Employment Participation in the context of Jobs Forums held in the relevant PEAs between 14 and 17 July 2009. A further project in the Victorian bushfire area was announced on 3 August 2009.

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funding agreements were not signed for any projects until September 2009,  with the program guidelines stating that proponents not commence relevant  activities until a funding agreement had been executed. Consequently, giving  these 13 projects preferential consideration such that their approval was locked  in before other projects had been considered (or, in some cases, assessed) did  not  provide  any  identifiable  benefit  in  terms  of  improved  timeliness  in  delivering actual economic stimulus.  

Second tranche of approvals: Non-priority employment area projects excluded from consideration

3.32 A  revised  timeline  prepared  following  the  ARC’s  first  meeting  provided for the assessment of projects located in the remaining 17 PEAs to be  completed by 15 July, and all remaining proposals by 24 July; and successful  projects to be ready for announcement by 31 July 2009.  

3.33 Following approval of the first tranche, remaining proposals located in  PEAs  were  considered  in  a  further  series  of  meetings,  with  projects  being  grouped  within  their  respective  PEA.  As  at  30 July  2009,  the  ARC  had  considered only 31 (five per cent) of the nearly 640 applications identified in  the final assessment records as not being located in a PEA. The majority of  those (27, 87 per cent) had been considered due to being erroneously identified  as being in a PEA. However, at the  30 July 2009 meeting, the ARC agreed: 

...  not  to recommend  projects  that  were  not  in  priority areas given  that all  available funding for Round 1 was taken up on projects already recommended  in priority areas. 

3.34 At the completion of its 31 July 2009 meeting, the ARC had agreed to  recommend  112  further  projects  in  PEAs.  Combined  with  the  13  projects  approved  on  10  July  2009,  this  took  total  funding  to  $107.61  million  for  125 projects.  Taking  into  account  the  movement  of  two  of  the  projects  approved on 10 July as LJ projects back into the GCW stream, this involved  $38.36 million  for  45  LJ  projects  and  $69.25  million  for  80  GCW  projects.  A second approval instrument signed on 31 July 2009 included re‐approval of  the 13 projects previously approved (and, in at least eight cases, announced).  The 125 approved projects included projects in each of the 20 PEAs and the  Victorian bushfire area, with the number of projects in each area ranging from  two to 13. The approval rate for projects submitted in each PEA, as reflected in  the approvals to that time, ranged from eight per cent to 50 per cent. 

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Third tranche of project approvals

3.35 A Ministerial brief of 4 August 2009 advised that the submissions ‘were  all assessed and ranked’ and presented to the ARC chaired by the delegate for  consideration.80 The department advised the Minister that: 

Due to the large number of bids in Priority Areas and the Victorian Bushfire  region,  the  [ARC]  considered  these  proposals  first,  and  within  these  gave  priority to projects with high job creation/retention. As the quality of these  proposals  was  high,  the  Priority  Areas  and  the  Victorian  bushfire  region  projects exhausted in excess of the $100m available.81 

3.36 DEEWR further advised that: 

As per the Keep Australia Working report recommendation, it is proposed that  future funding be targeted to the 20 Priority areas.82 As the total first round  funding has been assigned only to Priority Areas, there may be criticism from  organisations  that  are  not  in  Priority  Areas.  Given  the  large  volume  of  proposals we have received from outside Priority Areas, many of which are  high quality, we recommend that you agree to around $20m to be allocated to  projects outside of the Priority Areas over coming weeks. [ANAO emphasis] 

3.37 The  Minister  did  not  agree  with  this  recommendation,  instead  annota ting the brief as follows: 

As  discussed,  pls  re‐assess  on  the  basis  of  whole  country  rather  than  only  Priority  Empt  Areas.  If  applications  merit  it,  please  allocate  a  further  $40 million to this round. [sic] 

3.38 Following the  Minister’s decision, the  ARC  considered  the  merits  of  120 projects  not  located  in  one  of  the  20  defined  PEAs  that  had  achieved  eligible  criteria  scores,  more  than  a  third  of  which  (41,  34  per  cent)  were  recommended. The ARC also considered a further 24 projects in 13 PEAs for  which there was no record of earlier consideration, with seven (29 per cent) 

                                                       80 As noted, projects were considered within their respective PEA, rather than as a national merit ranking. 81

DEEWR further advised the Minister that: ‘There could be some criticism that we have allocated more than was foreshadowed in the first call for proposals, and this has reduced the opportunities available for those organisations who did not put in a submission in the first round. As there will be around $250m available for the next call for proposals, it is easy to defend making these allocations now, given the high demand for funding, the quality of projects and the desire for quick stimulus.’ In this respect, while the amounts approved by the delegate on 30 July 2009 totalled $107.61 million, this was overstated by $8.5 million due to being incorrectly expressed in GST inclusive terms. The same error had been made in approving the first tranche. These errors were corrected in the revised outcome on 14 August 2009. 82

See paragraph 1.14. As is discussed further at paragraph 4.50, the revised program guidelines published for the second round did not provide for projects in PEAs to be preferred on that basis as compared to other projects that addressed the criterion requiring that they assist disadvantaged groups or regions.

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Third tranche of project approvals

3.35 A Ministerial brief of 4 August 2009 advised that the submissions ‘were  all assessed and ranked’ and presented to the ARC chaired by the delegate for  consideration.80 The department advised the Minister that: 

Due to the large number of bids in Priority Areas and the Victorian Bushfire  region,  the  [ARC]  considered  these  proposals  first,  and  within  these  gave  priority to projects with high job creation/retention. As the quality of these  proposals  was  high,  the  Priority  Areas  and  the  Victorian  bushfire  region  projects exhausted in excess of the $100m available.81 

3.36 DEEWR further advised that: 

As per the Keep Australia Working report recommendation, it is proposed that  future funding be targeted to the 20 Priority areas.82 As the total first round  funding has been assigned only to Priority Areas, there may be criticism from  organisations  that  are  not  in  Priority  Areas.  Given  the  large  volume  of  proposals we have received from outside Priority Areas, many of which are  high quality, we recommend that you agree to around $20m to be allocated to  projects outside of the Priority Areas over coming weeks. [AN AO emphasis] 

3.37 The  Minister  did  not  agree  with  this  recommendation,  instead  annotating the brief as follows: 

As  discussed,  pls  re‐assess  on  the  basis  of  whole  country  rather  than  only  Priority  Empt  Areas.  If  applications  merit  it,  please  allocate  a  further  $40 million to this round. [sic] 

3.38 Following the  Minister’s decision, the  ARC  considered  the  merits  of  120 projects  not  located  in  one  of  the  20  defined  PEAs  that  had  achieved  eligible  criteria  scores,  more  than  a  third  of  which  (41,  34  per  cent)  were  recommended. The ARC also considered a further 24 projects in 13 PEAs for  which there was no record of earlier consideration, with seven (29 per cent) 

                                                       80 As noted, projects were considered within their respective PEA, rather than as a national merit ranking. 81

DEEWR further advised the Minister that: ‘There could be some criticism that we have allocated more than was foreshadowed in the first call for proposals, and this has reduced the opportunities available for those organisations who did not put in a submission in the first round. As there will be around $250m available for the next call for proposals, it is easy to defend making these allocations now, given the high demand for funding, the quality of projects and the desire for quick stimulus.’ In this respect, while the amounts approved by the delegate on 30 July 2009 totalled $107.61 million, this was overstated by $8.5 million due to being incorrectly expressed in GST inclusive terms. The same error had been made in approving the first tranche. These errors were corrected in the revised outcome on 14 August 2009. 82

See paragraph 1.14. As is discussed further at paragraph 4.50, the revised program guidelines published for the second round did not provide for projects in PEAs to be preferred on that basis as compared to other projects that addressed the criterion requiring that they assist disadvantaged groups or regions.

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being recommended.83 In total, a further 48 projects for $33.2 million had been  recommended at the conclusion of the final ARC meeting on 13 August 2009.  As part of those deliberations, four of the previously approved projects were  moved  from  GCW  to  the  LJ stream.  The  delegate  signed  a  third  approval  instrument  on  14 August  2009  approving  173  projects  (including  all  of  the  125 previously approved projects) for funding totalling $132.3 million—a net  increase over the funding approved in the first two tranches of $24.7 million.84 

Demonstrating projects’ overall relative merit

Aggregation of scores for comparative ranking purposes

3.39 As  noted  at  paragraph  3.13,  the  original  assessment  methodology  provided  for  the  scores  achieved  by  a  proposal  against  the  three  gateway  criteria and four target areas to be aggregated to give an overall score, with  each being equally weighted. DEEWR’s May 2009 assessment guidelines stated  that  proposals  would  be  ranked  based  on  their  overall  score,  with  the  assessment report and comparative ranking for each proposal then provided to  a  committee  for  review  and  the  formulation  of  funding  recommendations.  However, the first meeting of the ARC on 25 June 2009 was advised that it was  not

 considered feasible to combine the aggregate scores for gateway criteria  with the target areas as: 

 this approach had not been published in the program guidelines and no  weightings  had  been  identified  that  suggested,  with  respect  to  the  target areas, that proposals that met more than one would be preferred;  and 

 a high score against one set of criteria may offset a low score against the  other and lead to a distortion of priorities for funding. For example, a  high score against the target areas could offset a relatively low score  against the gateway criteria. 

3.40 On that basis, it was proposed to present projects in descending order  of aggregate scores against the gateway criteria ‘as these focus on the degree to  which a project meets the core objective of the Jobs Fund to contribute to the 

                                                       83 For a further 48 PEA projects, it was formally recorded in ARC minutes during this period that the relevant project had achieved scores that were too low to be considered. 84

As noted at footnote 81, this included a reduction of $8.5 million in the approved funding for the 125 projects included in the 31 July 2009 approval instrument.

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government’s  Economic  Stimulus  Package’.  The  ARC  was  advised  that  proposals could then be further prioritised in light of the degree to which they  met one or more of the target areas (as measured by individual scores against  each of these areas). The ARC agreed that: 

 the separate scores achieved by a proposal against the three gateway  criteria and the four target areas would not be summed; and  

 proposals would be considered initially ranked by aggregate gateway  criteria scores, with individual scores achieved against the four target  areas to be used to inform decisions.  

3.41 The  revised  methodology  agreed  by  the  ARC  more  appropriately  reflected the different nature of the two sets of criteria and the terms of the  program guidelines. However, it also highlighted a deficiency in the design of  the selection criteria included in the guidelines.  

3.42 Selection  criteria  form  the  key  link  between  a  program’s  stated  objectives  and  the  outcomes  achieved  from  the  funding  awarded.  Selection criteria fall into two main groups, each of which serves a different  purpose: 

 threshold criteria are the criteria that a proposal must meet in order to  be  considered  for  funding.  Assessment  against  a  threshold  criterion  generally involves applying a common st andard or benchmark in order  to determine whether the criterion has been met or not; and 

 assessment criteria are the criteria against which all eligible, compliant  proposals will be assessed in order to determine their relative merits  against the program objectives and other competing applications. 

3.43 The selection criteria set out in the Jobs Fund guidelines involved a  somewhat confused mixture of these two types of criteria, setting out: 

 the three gateway criteria as threshold requirements that must each be  ‘met’,  but  then  (under  the  heading  ‘assessment  criteria’)  the  information  applicants  were  asked  to  provide  in  relation  to  each  criterion introduced other matters that could be used to assess relative  merit against the program’s stimulus objective. Reflecting this, as noted  at paragraph 3.5, the DEEWR assessment methodology identified the  three gateway criteria as the assessment criteria; and 

 the  four  target  areas  under  the  heading  ‘project  eligibility’,  with  projects needing to address at least one to be eligible. However, the 

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government’s  Economic  Stimulus  Package’.  The  ARC  was  advised  that  proposals could then be further prioritised in light of the degree to which they  met one or more of the target areas (as measured by individual scores against  each of these areas). The ARC agreed that: 

 the separate scores achieved by a proposal against the three gateway  criteria and the four target areas would not be summed; and  

 proposals would be considered initially ranked by aggregate gateway  criteria scores, with individual scores achieved against the four target  areas to be used to inform decisions.  

3.41 The  revised  methodology  agreed  by  the  ARC  more  appropriately  reflected the different nature of the two sets of criteria and the terms of the  program guidelines. However, it also highlighted a deficiency in the design of  the selection criteria included in the guidelines.  

3.42 Selection  criteria  form  the  key  link  between  a  program’s  stated  objectives  and  the  outcomes  achieved  from  the  funding  awarded.  Selection criteria fall into two main groups, each of which serves a different  purpose: 

 threshold criteria are the criteria that a proposal must meet in order to  be  considered  for  funding.  Assessment  against  a  threshold  criterion  generally involves applying a common st andard or benchmark in order  to determine whether the criterion has been met or not; and 

 assessment criteria are the criteria against which all eligible, compliant  proposals will be assessed in order to determine their relative merits  against the program objectives and other competing applications. 

3.43 The selection criteria set out in the Jobs Fund guidelines involved a  somewhat confused mixture of these two types of criteria, setting out: 

 the three gateway criteria as threshold requirements that must each be  ‘met’,  but  then  (under  the  heading  ‘assessment  criteria’)  the  information  applicants  were  asked  to  provide  in  relation  to  each  criterion introduced other matters that could be used to assess relative  merit against the program’s stimulus objective. Reflecting this, as noted  at paragraph 3.5, the DEEWR assessment methodology identified the  three gateway criteria as the assessment criteria; and 

 the  four  target  areas  under  the  heading  ‘project  eligibility’,  with  projects needing to address at least one to be eligible. However, the 

First Round Selection Processes

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guidelines  also  set  out  a  range  of  characteristics  that  would  be  preferred  within  each  target  area  (see  Table  3.2).  Effectively,  this  established  merit  criteria  that  could  be  applied  in  differentiating  between  projects.  However,  their  utility  as  criteria  that  could  be  consistently incorporated into assessment scores was inhibited by the  manner in which they had been set out. The guidelines did not identify: 

 whether  projects  that  addressed  more  than  one  target  area  would be preferred—the target areas a project might address  varied depending upon its nature and projects of quite different  nature were competing in the same round; or 

 any  relative  weighting  between  the  preferred  characteristics  (or merit  criteria),  or  whether  a  project  that  demonstrated  a  higher number would be preferred to those that demonstrated  fewer. 

Final assessment scores as an indicator of projects to be selected

3.44 Despite the processes applied by DEEWR to promote the quality and  consistency  of  the  scored  assessment  process,  the  final  scores  assigned  to  competing projects (after applying the results of all score reviews requested by  the ARC or otherwise undertaken to validate the scores allocated to a project),  did not prove to be a strong indicator of the projects that would be selected.  Table 3.3 sets out the final scores allocated  to projects at the conclusion of the  selection process and associated approval rates. 

 

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Table 3.3

Final scores allocated to projects assessed in first round as meeting all criteria to at least a minimum level and associated rates of approval

Total score against three gateway criteria

1

Projects with highest score against any target

area of 3 out of 3 (a rating of strong)

Projects with highest score against any target

area of 2 out of 3 (a rating of average)

All projects that met minimum gateway and target area criteria Projects by stream

Approved by stream

(%)

All projects

Approved

(%)

Projects

Approved (%)

Projects

Approved (%)

LJ 2

GCW

2

LJ 2

GCW

2

15

1

1 (100%) 0 n/a 1 0 1 (100%) n/a 1 1 (100%)

14

8

5 (63%) 2 0 (0%) 5 5 1 (20%) 4 (80%) 10 5 (50%)

13

25

16 (64%) 0 n/a 9 16 6 (67%) 10 (63%) 25 16 (64%)

12 52 23 (44%) 0 n/a 24 28 12 (50%) 11 (39%) 52 23 (44%) 11 41 22 (54%)

27

9 (33%) 23 45 12 (52%) 19 (42%) 68 31 (46%)

10 70 33 (47%)

34

7 (21%) 29 75 11 (38%) 29 (39%) 104 40 (38%)

9 59 29 (49%)

86

28 (33%) 49 96 21 (43%) 36 (38%) 145 57 (39%)

Total

256

129 (50%)

149

44 (30%)

140

265

64 (46%)

109 (41%)

405

173 (43%)

Notes:

1. Projects with a minimum pass score of 3 or higher against each of the three gateway criteria.

2. Projects were allocated to streams by DEEWR, with a number of projects being moved between streams one or more times. These are the final stream allocations.

Source: ANAO analysis of DEEWR assessment records for the first funding round of the Jobs Fund.

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Table 3.3

Final scores allocated to projects assessed in first round as meeting all criteria to at least a minimum level and associated rates of approval

Total score against three gateway

criteria

1

Projects with highest score against any target area of 3 out of 3 (a rating of strong)

Projects with highest score against any target area of 2 out of 3 (a rating of average)

All projects that met minimum gateway and target area criteria

Projects by stream Approved by stream (%)

All

projects Approved (%) Projects Approved (%) Projects Approved (%) LJ

2 GCW

2 LJ

2 GCW

2

15 1 1 (100%) 0 n/a 1 0 1 (100%) n/a 1 1 (100%)

14 8 5 (63%) 2 0 (0%) 5 5 1 (20%) 4 (80%) 10 5 (50%)

13 25 16 (64%) 0 n/a 9 16 6 (67%) 10 (63%) 25 16 (64%)

12 52 23 (44%) 0 n/a 24 28 12 (50%) 11 (39%) 52 23 (44%)

11 41 22 (54%) 27 9 (33%) 23 45 12 (52%) 19 (42%) 68 31 (46%)

10 70 33 (47%) 34 7 (21%) 29 75 11 (38%) 29 (39%) 104 40 (38%)

9 59 29 (49%) 86 28 (33%) 49 96 21 (43%) 36 (38%) 145 57 (39%)

Total 256 129 (50%) 149 44 (30%) 140 265 64 (46%) 109 (41%) 405 173 (43%)

Notes:

1. Projects with a minimum pass score of 3 or higher against each of the three gateway criteria.

2. Projects were allocated

to streams by DEEWR, with a number of projects being moved between streams one or more times. These are the final stream allocations.

Source: ANAO analysis of DEEWR assessment records for the first funding round of the Jobs Fund.

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3.45 As Table 3.3 illustrates, projects that achieved gateway scores of 13 or  more and were rated as strongly addressing one or more target areas achieved  a higher approval rate than other projects. Specifically, 22 (65 per cent) of the  34 projects  in  that  cohort  were  approved.  This  compared  to  a  significantly  lower approval rate for projects that achieved marginal to moderate scores.  Of the 147 projects with gateway scores of between nine and 11 that were not  rated any higher than average against any target area, 44 (30 per cent) were  approved.  However,  there  were  nearly  the  same  number  of  unapproved  projects  with  eligible  gateway  scores  of  10 or  more85  (144 projects),  as  there  were approved projects with the minimum pass score of nine (145 projects).  

Scoring scale

3.46 The capacity for the assessment scores to effectively differentiate the  relative  merits  of  competing  projects  was  diminished  by  the  scale  applied.  As Table 3.1 illustrates, only three of the six scoring points for each gateway  criterion were available to differentiate between projects that had at least met  the minimum pass threshold, with no capacity to a ward partial scores. As a  result, 317 (78 per cent) of the 405 projects that met minimum requirements to  be considered for funding had aggregate gateway scores of between nine and  11, thereby providing little effective differentiation in terms of relative merit.  Those 317 projects comprised: 145 (36 per cent) with the minimum score of  nine, of which 57 (39 per cent) were approved; 104 (25 per cent) with a score of  ten, of which 40 (38 per cent) were approved; and 68 (17 per cent) with a score  of 11, of which 31 (46 per cent) were approved.  

3.47 Similarly, the scoring scale applied to the target areas (see Table 3.1)  utilised two of the four scoring points for applications that failed to address the  target area. This left only two points on the scoring scale to reflect the strength  of  an  application’s  claims  against  the  given  target  area,  and  to  give  consideration to the various characteristics the program guidelines had stated  would be preferred within each target area (see paragraphs 3.6 to 3.7). In this  respect, as Table 3.3 illustrates, projects that achieved high gateway criteria  scores tended to also achieve a rating of strong against at least on e target area.  Projects that achieved lower gateway scores of between nine and 11 (which, as 

                                                       85 These unapproved projects had been assessed as meeting at least one gateway criterion to a strong or very strong level and as suitable/adequate against any remaining criteria. Of those 144 projects, 32 (22 per cent) were assessed as

meeting all three criteria to a strong or very strong level, with 30 (94 per cent) of those 32 projects being assessed as also strongly addressing at least one target area (including one project that achieved the maximum score against all four target areas).

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noted, involved more than three‐quarters of eligible projects) were almost as  likely  to  receive  no  better  than  an  average  rating  against  any  target  area  (147 projects, 46 per cent—of which 44 (30 per cent) were approved) as they  were  to  receive  a  rating  of  strong  against  a  target  area  (170  projects,  54 per cent—of which 84 (49 per cent) were approved). 

3.48 Where the program guidelines specify that each criterion must be met  to be eligible for consideration, a fail score against any of those criteria cannot  be  overcome  by  a  high  score  against  others.  Accordingly,  it  was  a  wasted  opportunity in terms of maximising the capacity for the scored assessments to  highlight the relative merits of competing applications for half of the available  scoring points to apply to projects that did not satisfy the necessary thresholds. 

Incorporation of ARC deliberations into final assessment outcome

3.49 As is reflected in the CGGs, it is expected that value for money will be a  core  consideration  in  determining  grant  recipients.  In  the  context  of  a  competitive grant program, value for money relates to the extent to which a  project will contribute to maximising the achievement of program objectives  within the funding available. In this respect, well d esigned selection criteria  and assessment methodologies will capture within the rating or score used for  ranking purposes all aspects of an application relevant to forming a conclusion  as to whether it will maximise program outcomes for the funding involved  (that is, provide better value for money than competing proposals).  

3.50 This does not necessitate a mechanistic approach. An overall review of  the ratings attributed to applications considered worthy should be undertaken  to  confirm  their  relative  ranking.  This  can  be  achieved  through  analytical  review that is directed at validating that the published selection criteria have  been consistently applied and assessments and associated scores appropriately  reflect each project’s merits in terms of the program guidelines. However, it is  important that it be readily discernable from the documented selection process  that  the  same  factors  were  taken  into  account  in  the  same  manner  for  all  competing proposals, and the resulting relative merit of each application. 

3.51 As  discussed  at  paragraphs  3.8  to  3.12,  the  selection  methodology  established  by  DEEWR  did  not  seek  to  encapsulate  within  the  assessment  scores all factors that would be taken into account in identifying the projects  that  should  be  approved.  In  particular,  there  was  no  provision  for  an  assessment of the  value for money factors identified in the program guidelines 

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noted, involved more than three‐quarters of eligible projects) were almost as  likely  to  receive  no  better  than  an  average  rating  against  any  target  area  (147 projects, 46 per cent—of which 44 (30 per cent) were approved) as they  were  to  receive  a  rating  of  strong  against  a  target  area  (170  projects,  54 per cent—of which 84 (49 per cent) were approved). 

3.48 Where the program guidelines specify that each criterion must be met  to be eligible for consideration, a fail score against any of those criteria cannot  be  overcome  by  a  high  score  against  others.  Accordingly,  it  was  a  wasted  opportunity in terms of maximising the capacity for the scored assessments to  highlight the relative merits of competing applications for half of the available  scoring points to apply to projects that did not satisfy the necessary thresholds. 

Incorporation of ARC deliberations into final assessment outcome

3.49 As is reflected in the CGGs, it is expected that value for money will be a  core  consideration  in  determining  grant  recipients.  In  the  context  of  a  competitive grant program, value for money relates to the extent to which a  project will contribute to maximising the achievement of program objectives  within the funding available. In this respect, well d esigned selection criteria  and assessment methodologies will capture within the rating or score used for  ranking purposes all aspects of an application relevant to forming a conclusion  as to whether it will maximise program outcomes for the funding involved  (that is, provide better value for money than competing proposals).  

3.50 This does not necessitate a mechanistic approach. An overall review of  the ratings attributed to applications considered worthy should be undertaken  to  confirm  their  relative  ranking.  This  can  be  achieved  through  analytical  review that is directed at validating that the published selection criteria have  been consistently applied and assessments and associated scores appropriately  reflect each project’s merits in terms of the program guidelines. However, it is  important that it be readily discernable from the documented selection process  that  the  same  factors  were  taken  into  account  in  the  same  manner  for  all  competing proposals, and the resulting relative merit of each application. 

3.51 As  discussed  at  paragraphs  3.8  to  3.12,  the  selection  methodology  established  by  DEEWR  did  not  seek  to  encapsulate  within  the  assessment  scores all factors that would be taken into account in identifying the projects  that  should  be  approved.  In  particular,  there  was  no  provision  for  an  assessment of the  value for money factors identified in the program guidelines 

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to  be  incorporated  into  the  scores  assigned.  These  aspects  were  to  be  considered as part of the ARC deliberations. 

3.52 The  ARC’s  terms  of  reference  stated  that  it  was  responsible  for  considering the capability and capacity of applicants to undertake projects in  accordance with the program guidelines in order to make recommendations  (see Figure 2.1).86 Project selection and approval guidelines developed in July  200987 stated that the ARC would consider all proposals, together with their  assessment  scores  and  a  financial  viability  assessment  as  appropriate.88  The ARC would review the capacity of applicants to deliver the proposal, take  into  account  risk  exposure  for  the  Australian  Government  and,  where  appropriate, make changes to funding in light of budget considerations and  consistent with the value for money principle. The guidelines stated that the  ARC would have regard to the preferred characteristics listed in the program  guidelines (see Table 3.2). As noted at paragraph 3.7, the assessment template  had provided for those factors to be considered in allocating scores against the  target areas or relevant gateway criteria. 

3.53 The  project  selection  and  approval  guidelines  further  stated  that  decisions of the delegate to approve funding would be based on the principle  o

f value for money, and defined value for money as: 

the  optimum  combination  of  quality  of  services,  price  and  other  factors  (including cost per job created, number of training places provided, number of  people retained in employment, diversity, priority area coverage or areas with  an  identified  need,  and  meeting  the  needs  of  specific  client  groups)  and  minimal risk exposure for the Australian Government. 

3.54 In  undertaking  its  role,  the  ARC  considered  the  merits  of  projects  relative  to  the  program  guidelines,  including  the  selection  criteria  against  which  projects  had  been  scored.  Different  conclusions  can  be  drawn,  quite  legitimately, from any given set of information, with analysis of the decisions  recorded  by  the  ARC  showing  that  the  factors  taken  into  account  by  the  committee primarily related to whether it considered that a project: 

                                                       86 As noted at footnote 37, the May 2009 assessment guidelines had stated that the inter-departmental committee would consider assessment reports and take into account issues such as value for money, geographic location, amount

requested and proposed outcomes in order to formulate recommendations. This reference was removed from the revised assessment guidelines developed in July 2009, which first incorporated reference to the ARC. 87 See footnote 32. 88 Financial and applicant viability assessments were undertaken for recommended projects, but these did not play a

determinative role in relation to the majority of approved projects.

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 was eligible, including whether it was from an eligible applicant or for  an  eligible  purpose.  In  some  cases,  applications  that  had  proceeded  through the assessment stage were identified as being ineligible in the  course of ARC deliberations, but the project was not removed from the  identified population of assessed, eligible applications; 

 had  met  the  gateway  criteria,  including  by  reference  to  matters  that  assessors  were  to  pay  particular  regard  to  in  scoring  projects  (see paragraph  3.5),  and/or  whether  it  exhibited  one  or  more  of  the  preferred characteristics listed in the guidelines against the target areas.  In many cases, the documented reason for deciding not to recommend  a project indicated that the ARC had reached a different view in this  regard  than  had  been  incorporated  in  the  assessment  scores,  but  without this being reflected in a revision to the relevant score; and/or 

 represented value for money, regardless of whether it had been scored  highly  against  the  selection  criteria.  As  set  out  in  the  program  guidelines  (see  paragraph  3.8),  this  was  frequently  based  upon  consideration  of  cost  effectiveness,  including  in  terms  of  the  employment  outcomes  expected  for  the  funding  requested.89  In  this  respect, DEEWR advice to ANAO was  that: 

Reliance solely on assessment against the criteria would not provide  an overall [value for money] comparative assessment, due to the wide  variation in project types and locations among the many applications  received,  and  consequently  the  wide  variation  of  underlying  cost  factors  at  work.  While  these  individual  factors  are  relevant  to  the  [value  for  money]  of  individual  applications,  they  cannot  provide  a  basis for comparative assessment. 

3.55 As noted at paragraph 3.15, these decisions were taken on a project by  project basis over a number of weeks. In this respect, at its 10 August 2009  meeting (that is, nearing the end of the supplementary process following the 

                                                       89 In this respect, the overall approval rate within the 405 eligibly scored projects was 43 per cent. However, approval rates were significantly higher for projects seeking lower amounts. Specifically, 35 (62 per cent) of the 52 projects

seeking $200 000 or less were approved; whereas the approval rate within the remaining 353 projects was 39 per cent (138 projects). The preference for projects seeking smaller amounts was exhibited across scoring categories. For example, of the 86 projects with gateway scores of between 12 and 15 and rated as strongly addressing one or more target areas, 52 per cent (45) were approved. Of the nine projects in this highest scoring group that sought $200 000 or less, 67 per cent (six) were approved; whereas, the approval rate among the remaining 77 projects was 51 per cent (39 projects). Similarly, 84 (49 per cent) of the 170 projects with gateway scores of between nine and 11 and rated as strongly addressing at least one target area were approved. Twenty of those 170 projects had sought $200 000 or less, of which 16 (80 per cent) were approved. The approval rate for the remaining 150 projects in this scoring cohort was 45 per cent (68 projects).

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 was eligible, including whether it was from an eligible applicant or for  an  eligible  purpose.  In  some  cases,  applications  that  had  proceeded  through the assessment stage were identified as being ineligible in the  course of ARC deliberations, but the project was not removed from the  identified population of assessed, eligible applications; 

 had  met  the  gateway  criteria,  including  by  reference  to  matters  that  assessors  were  to  pay  particular  regard  to  in  scoring  projects  (see paragraph  3.5),  and/or  whether  it  exhibited  one  or  more  of  the  preferred characteristics listed in the guidelines against the target areas.  In many cases, the documented reason for deciding not to recommend  a project indicated that the ARC had reached a different view in this  regard  than  had  been  incorporated  in  the  assessment  scores,  but  without this being reflected in a revision to the relevant score; and/or 

 represented value for money, regardless of whether it had been scored  highly  against  the  selection  criteria.  As  set  out  in  the  program  guidelines  (see  paragraph  3.8),  this  was  frequently  based  upon  consideration  of  cost  effectiveness,  including  in  terms  of  the  employment  outcomes  expected  for  the  funding  requested.89  In  this  respect, DEEWR advice to ANAO was  that: 

Reliance solely on assessment against the criteria would not provide  an overall [value for money] comparative assessment, due to the wide  variation in project types and locations among the many applications  received,  and  consequently  the  wide  variation  of  underlying  cost  factors  at  work.  While  these  individual  factors  are  relevant  to  the  [value  for  money]  of  individual  applications,  they  cannot  provide  a 

basis for comparative assessment. 

3.55 As noted at paragraph 3.15, these decisions were taken on a project by  project basis over a number of weeks. In this respect, at its 10 August 2009  meeting (that is, nearing the end of the supplementary process following the 

                                                       89 In this respect, the overall approval rate within the 405 eligibly scored projects was 43 per cent. However, approval rates were significantly higher for projects seeking lower amounts. Specifically, 35 (62 per cent) of the 52 projects

seeking $200 000 or less were approved; whereas the approval rate within the remaining 353 projects was 39 per cent (138 projects). The preference for projects seeking smaller amounts was exhibited across scoring categories. For example, of the 86 projects with gateway scores of between 12 and 15 and rated as strongly addressing one or more target areas, 52 per cent (45) were approved. Of the nine projects in this highest scoring group that sought $200 000 or less, 67 per cent (six) were approved; whereas, the approval rate among the remaining 77 projects was 51 per cent (39 projects). Similarly, 84 (49 per cent) of the 170 projects with gateway scores of between nine and 11 and rated as strongly addressing at least one target area were approved. Twenty of those 170 projects had sought $200 000 or less, of which 16 (80 per cent) were approved. The approval rate for the remaining 150 projects in this scoring cohort was 45 per cent (68 projects).

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Minister’s  agreement  to  additional  funding),  the  ARC  agreed  a  quality  assurance check should be undertaken of all recommended projects to ensure  they met each gateway criterion (that is, met the minimum threshold necessary  to be eligible for funding consideration). It was also agreed there should be a  check as to whether any projects recommended under GCW should be more  appropriately classified into the LJ stream. The department prepared analysis  in  relation  to  34 proponents  that  had  submitted  multiple  projects  of  which  none or few had been recommended and a summary of the reasons for the  remaining  projects  being  rejected,  which  was  presented  to  the  ARC’s  final  meeting on 13 August 2009.90  

3.56 A mechanism for incorporating the ARC’s conclusions regarding the  relative value for money (or overall merit) of each project into a final rating  was not established and, as noted at paragraph 3.19, eligible projects were not  ranked on a national basis at the conclusion of the ARC deliberative process.  That process would also have benefited from the use of a template or other  format by which it could be documented that the same factors relating to the  program  guidelines  had  been  explicitly  considered  in  the  s ame  manner  for  each project in respect to which the ARC formed a conclusion. 

Assessment scores and associated approval rates between projects in priority employment areas and those in non-priority employment areas

3.57 As discussed at paragraphs 3.22 to 3.38, the ARC prioritised projects  located in the 20 defined PEAs for funding consideration. Of the 405 projects  that achieved eligible assessment scores: 

 280 (69 per cent) were located in one of the 20 PEAs. Those projects  were  over‐represented  in  the  approved  projects  compared  to  the  overall population of eligible projects—127 projects were approved for  $100.9 million,  an  approval  rate  of  45  per  cent  and  representing  73 per cent of approved projects and 76 per cent of approved funding; 

 eight (two per cent) were in the Victorian bushfire area that was also  prioritised.  These  projects  were  also  slightly  over‐represented  in  the 

                                                       90 This analysis had led the ARC deputy chair to request a review of the scores for two projects from one proponent, in one case because its scores in the ARC spreadsheet appeared as zeros. The project had been considered at the

ARC’s 7 August 2009 meeting and a decision to reject it was recorded due to it not being dependent on Jobs Fund resources to proceed. After the project was again considered at the final ARC meeting, the spreadsheet showed revised scores against the gateway criteria of nine and average or strong scores against all four target areas. The 13 August 2009 meeting noted that the scores had been reviewed but decided the project was not value for money based on the number of jobs.

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approved  projects  compared  to  the  overall  population  of  eligible  projects—five  projects  were  approved  for  $4.75 million,  an  approval  rate of 63 per cent and representing three per cent of approved projects  and four per cent of approved funding; and 

 117 (29 per cent) were not located in a priority area. These projects were  under‐represented  in  the  approved  projects  compared  to  the  overall  population  of  eligible  projects—41  projects  were  approved  for  $26.7 million,  an  approval  rate  of  35  per  cent  and  representing  24 per cent of approved projects and 20 per cent of approved funding.  

3.58 Table 3.4 sets out the rates of approval for the eligibly scored projects in  PEAs compared to projects in other areas. 

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approved  projects  compared  to  the  overall  population  of  eligible  projects—five  projects  were  approved  for  $4.75 million,  an  approval  rate of 63 per cent and representing three per cent of approved projects  and four per cent of approved funding; and 

 117 (29 per cent) were not located in a priority area. These projects were  under‐represented  in  the  approved  projects  compared  to  the  overall  population  of  eligible  projects—41  projects  were  approved  for  $26.7 million,  an  approval  rate  of  35  per  cent  and  representing  24 per cent of approved projects and 20 per cent of approved funding.  

3.58 Table 3.4 sets out the rates of approval for the eligibly scored projects in  PEAs compared to projects in other areas. 

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Table 3.4

Final eligible scores and rates of approval: in priority employment areas and non-priority employment areas

Total score against three gateway criteria

1

Projects with highest score against any

Target Area of 3 out of 3

Projects with highest score against

any Target Area of 2 out of 3

All projects that met minimum gateway

and target area criteria

Number of projects

Number

recommended (%)

Number of projects

Number

recommended (%)

Number of projects

Number recommended

(%)

PEA

2

Non- PEA

PEA

2

Non- PEA

PEA

2

Non- PEA

PEA

2

Non- PEA

PEA

2

Non- PEA

PEA

2

Non-PEA

15 1 0 1(100%) 0 0 0 (n)/a n/a 1 0 1 (100%) n/a 14 4 4 2 (50%) 3 (75%) 2 0 0 (0%) n/a 6 4 2 (50%) 3 (75%) 13 21 4 12 (56%) 4 (100%) 0 0 n/a n/a 21 4 12 (57%) 4 (100%) 12 39 13 18 (46%) 5 (38%) 0 0 n/a n/a 39 13 18 (46%) 5 (38%) 11 30 11 16 (53%) 6 (55%) 20 7 8 (40%) 1 (14%) 50 18 24 (48%) 7 (39%) 10 44 26 23 (52%) 10 (38%) 23 11 5 (22%) 2 (18%) 67 37 28 (42%) 12 (32%) 9 40 19 24 (60%) 5 (26%) 64 22 23 (36%) 5 (23%) 104 41 47 (45%) 10 (24%) Total

179

77

96 (54%)

33 (43%)

109

40

36 (33%)

8 (20%)

288

117

132 (46%)

41 (35%)

Notes:

1. Projects with a minimum pass score of 3 against each of the three gateway criteria only.

2. PEA = Priority Employment Area. For the purposes of the analysis in this table, this includes the eight non-PEA projects located in the Victorian bushfire area.

Source: ANAO analysis of DEEWR assessment records for the first funding round of the Jobs Fund.

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3.59 As Table 3.4 illustrates, for projects that achieved comparatively low  merit scores, projects in PEAs were significantly more likely to be approved  than was the case for other projects. Specifically: 

 221 (77 per cent) of the eligibly scored projects that were located in  PEAs received aggregate gateway criteria scores of 11 or less. Of those,  99 projects (45 per cent) were approved; whereas 

 96 (82 per cent) of the eligibly scored projects in other areas received  gateway criteria scores of 11 or less, of which 29 (30 per cent) were  approved. 

3.60 By  way  of  comparison,  the  21  projects  in  non‐priority  employment  areas  with  gateway  scores  of  12  or  higher  achieved  a  significantly  higher  approval rate (90 per cent, 19 projects) than the 67 PEA projects with scores in  that bracket, of which 33 (49 per cent) were approved. 

3.61 Having regard for the context in which the Jobs Fund was established,  the  department’s  focus  on  ensuring  funding  was  directed  to  the  areas  identified as being at greatest risk as a result of the economic downturn was  reasonable.  Indeed,  the  selection  approach  adopted  by  DEEWR  had  considerably greater regard for this key aspect of the program than did the  selection processes undertak

en in respect to the other Jobs Fund components.91  

3.62 However, care needed to be taken to ensure that the implementation of  that policy intention remained consistent with the principles of sound grants  administration, including the capacity to demonstrate that all eligible projects  had been considered in the same way against the published selection criteria.  The  inclusion  of  a  mechanism  to  establish  a  final  merit  ranking  of  all  competing  projects  incorporating  relevant  ARC  deliberations  would  have  enhanced the capacity to demonstrate that the funded projects represented the  most  meritorious.  It  would  also  allow  the  documented  scores  against  the  published  criteria  to  be  reconciled  with  the  selection  process  outcome  in  a  manner that the brief qualitative comments recorded by the ARC in relation to  individual projects had a limited capacity to do. 

                                                       91 Specifically, ANAO’s audits of the IEP stream and the quarantined bike path and heritage components of the LJ stream identified that, in each case, the selection processes adopted had not resulted in funding being appropriately targeted at

projects that had demonstrably satisfied the requirement to be in an area of high or increasing unemployment or vulnerability (see ANAO Audit Report No. 7 2011-12, op. cit.; ANAO Audit Report No.27 2011-12, op. cit.; and ANAO Audit Report No.11 2012-13, op. cit).

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Supplementary assessment processes 3.63 DEEWR  completed  its  selection  processes  on  14 August  2009,  with  successful  projects  being  announced  on  3  September  2009.  As  noted  at  paragraphs 1.15 to 1.17, the SPBC agreed on 30 September 2009 that, of the  remaining Jobs Fund funding, $93.3 million would be allocated to a second  public call and the remainder re‐allocated to a number of other initiatives. As a  result, there was no further funding available in relation to the first round.  

3.64 As  discussed  in  paragraphs  2.28  to  2.45,  a  number  of  errors  and  anomalies  had  resulted  in  applications  being  incorrectly  excluded  from  the  first round selection process. This included: 

 235 applications excluded from assessment on the basis they had been  submitted via email only, including 11 applications for which DEEWR  subsequently identified that a hard copy had been received during the  assessment process and a further three for which the date of receipt of  the hard copy was unknown; and 

 48 applications deemed ineligible under LJ and GCW due to seeking  more than $2 million where this had not, in fact, been the case. 

3.65 The  total  num

ber  of  applications  affected  by  the  above  factors  was  ultimately identified as some 280, with three applications being included in  both  of  the  above  categories.  As  discussed  at  paragraph  2.34,  the  affected  applications included projects  relating to all competitive components of the  Jobs Fund. 

3.66 In  September  and  October  2009,  DEEWR  allocated  a  further  34 applications to the heritage component for assessment, 28 of which related  to proposals received via email and one erroneously identified as seeking more  than $2 million. Although those projects were assessed by the then DEWHA in  late October 2009, none received further consideration as the funding had been  exhausted.92  DEEWR  also  sought  to  allocate  34 bike  path  projects  from  the  ‘electronic  only’  group  for  assessment  under  the  quarantined  bike  path  component—see further at paragraphs 3.75 to 3.83.93 

                                                       92 See further in ANAO Audit Report No.11 2012-13, op. cit., pp. 88-90. 93

A further 16 projects received via email only were allocated to the IEP stream due to seeking more than $2 million and, consequently, deemed to be unsuccessful (see paragraphs 2.42 to 2.43).

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3.59 As Table 3.4 illustrates, for projects that achieved comparatively low  merit scores, projects in PEAs were significantly more likely to be approved  than was the case for other projects. Specifically: 

 221 (77 per cent) of the eligibly scored projects that were located in  PEAs received aggregate gateway criteria scores of 11 or less. Of those,  99 projects (45 per cent) were approved; whereas 

 96 (82 per cent) of the eligibly scored projects in other areas received  gateway criteria scores of 11 or less, of which 29 (30 per cent) were  approved. 

3.60 By  way  of  comparison,  the  21  projects  in  non‐priority  employment  areas  with  gateway  scores  of  12  or  higher  achieved  a  significantly  higher  approval rate (90 per cent, 19 projects) than the 67 PEA projects with scores in  that bracket, of which 33 (49 per cent) were approved. 

3.61 Having regard for the context in which the Jobs Fund was established,  the  department’s  focus  on  ensuring  funding  was  directed  to  the  areas  identified as being at greatest risk as a result of the economic downturn was  reasonable.  Indeed,  the  selection  approach  adopted  by  DEE WR  had  considerably greater regard for this key aspect of the program than did the  selection processes undertaken in respect to the other Jobs Fund components.91  

3.62 However, care needed to be taken to ensure that the implementation of  that policy intention remained consistent with the principles of sound grants  administration, including the capacity to demonstrate that all eligible projects  had been considered in the same way against the published selection criteria.  The  inclusion  of  a  mechanism  to  establish  a  final  merit  ranking  of  all  competing  projects  incorporating  relevant  ARC  deliberations  would  have  enhanced the capacity to demonstrate that the funded projects represented the  most  meritorious.  It  would  also  allow  the  documented  scores  against  the  published  criteria  to  be  reconciled  with  the  selection  process  outcome  in  a  manner that the brief qualitative comments recorded by the ARC in relation to  individual projects had a limited capacity to do. 

                                                       91 Specifically, ANAO’s audits of the IEP stream and the quarantined bike path and heritage components of the LJ stream identified that, in each case, the selection processes adopted had not resulted in funding being appropriately targeted at

projects that had demonstrably satisfied the requirement to be in an area of high or increasing unemployment or vulnerability (see ANAO Audit Report No. 7 2011-12, op. cit.; ANAO Audit Report No.27 2011-12, op. cit.; and ANAO Audit Report No.11 2012-13, op. cit).

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Assessment of projects relating to DEEWR components

3.67 Between  13  October  and  late  December  2009,  DEEWR  completed  assessment templates in relation to the 202 projects affected by the above issues  that related to DEEWR‐administered components, involving: 

 47 projects that had been incorrectly deemed ineligible on the basis of  the amount sought. The first of those assessments was undertaken on  16 September  2009,  with  the  assessment  templates  for the  remainder  being completed over the course of October and November 2009; and 

 154 applications classified as having been received via email only.  

3.68 DEEWR emailed affected applicants in the latter group on 12 October  2009  requesting  that,  in  order  for  assessment  of  their  application  to  be  finalised, they submit an original signed legal authorisation form with a hard  copy of the application by 19 October 2009. The email made no reference to the  already concluded outcome for the first round94, but further advised that: 

Alternatively,  at  your  request,  your  application  may  be  considered  under  future rounds of the Jobs Fund, however the Keep Australia Working report,  submitted to the Deputy Prime Minister provides recommendations on how  the Government can support jobs and build skills for the future. This may  result  in  a  change   to  the  Jobs  Fund  Guidelines  to  align  with  these  recommendations. If you are interested in submitting proposals for a future  round you should wait until a further call is announced ...95 

3.69 One  applicant  withdrew  their  application  in  response.  DEEWR  subsequently completed assessment templates in respect to at least 14696 of the  remaining applications over the period from October to December 2009.  

3.70 Each  of  the  193  applications  from  these  two  groups  for  which  a  completed  assessment  template  was  held  in  departmental  records  was  assessed  as  not  meeting  the  minimum  threshold  requirements  against  the  gateway criteria and target areas. This compared to a failure rate among the  some 1600 applications assessed in the substantive first round of 75 per cent 

                                                       94 As noted at paragraphs 2.31 to 2.32, in deciding on 20 July 2009 that applications received in electronic form only would not be assessed, the ARC had also decided that affected applicants were to be contacted to request a hard copy

and to be advised that the application would be considered in the second round. A letter to relevant applicants asking for a hard copy so the proposal could be considered in future rounds was prepared on 7 September 2009, but not dispatched. As further noted at paragraph 2.33, also in September 2009 the probity review had identified the exclusion of applications received in electronic form from assessment under the first round as an issue DEEWR should address. 95

In agreeing to the second round on 30 September 2009, SPBC had also agreed that revised guidelines for both streams were to be brought forward by mid-October 2009 (see paragraphs 1.15 and 4.1). 96 A completed assessment template for a further six applications was not located in departmental records.

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Assessment of projects relating to DEEWR components

3.67 Between  13  October  and  late  December  2009,  DEEWR  completed  assessment templates in relation to the 202 projects affected by the above issues  that related to DEEWR‐administered components, involving: 

 47 projects that had been incorrectly deemed ineligible on the basis of  the amount sought. The first of those assessments was undertaken on  16 September  2009,  with  the  assessment  templates  for the  remainder  being completed over the course of October and November 2009; and 

 154 applications classified as having been received via email only.  

3.68 DEEWR emailed affected applicants in the latter group on 12 October  2009  requesting  that,  in  order  for  assessment  of  their  application  to  be  finalised, they submit an original signed legal authorisation form with a hard  copy of the application by 19 October 2009. The email made no reference to the  already concluded outcome for the first round94, but further advised that: 

Alternatively,  at  your  request,  your  application  may  be  considered  under  future rounds of the Jobs Fund, however the Keep Australia Working report,  submitted to the Deputy Prime Minister provides recommendations on how  the Government can support jobs and build skills for the future. This may  result  in  a  change   to  the  Jobs  Fund  Guidelines  to  align  with  these  recommendations. If you are interested in submitting proposals for a future  round you should wait until a further call is announced ...95 

3.69 One  applicant  withdrew  their  application  in  response.  DEEWR  subsequently completed assessment templates in respect to at least 14696 of the  remaining applications over the period from October to December 2009.  

3.70 Each  of  the  193  applications  from  these  two  groups  for  which  a  completed  assessment  template  was  held  in  departmental  records  was  assessed  as  not  meeting  the  minimum  threshold  requirements  against  the  gateway criteria and target areas. This compared to a failure rate among the  some 1600 applications assessed in the substantive first round of 75 per cent 

                                                       94 As noted at paragraphs 2.31 to 2.32, in deciding on 20 July 2009 that applications received in electronic form only would not be assessed, the ARC had also decided that affected applicants were to be contacted to request a hard copy

and to be advised that the application would be considered in the second round. A letter to relevant applicants asking for a hard copy so the proposal could be considered in future rounds was prepared on 7 September 2009, but not dispatched. As further noted at paragraph 2.33, also in September 2009 the probity review had identified the exclusion of applications received in electronic form from assessment under the first round as an issue DEEWR should address. 95

In agreeing to the second round on 30 September 2009, SPBC had also agreed that revised guidelines for both streams were to be brought forward by mid-October 2009 (see paragraphs 1.15 and 4.1). 96 A completed assessment template for a further six applications was not located in departmental records.

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(see paragraph 3.18). Of those 193 assessments, all but two had been completed  by a single assessor, rather than the team of two assessors required under the  first round assessment methodology. An indication that the assessment had  been  considered  by  a  moderator  was  included  on  114  (60  per  cent)  of  the  completed assessment templates. There was no quality assurance process in  relation to these assessments.  

3.71 In  respect  to  the  significantly  different  assessment  outcome  for  this  latter group of applications, DEEWR advised ANAO that:  

These assessments were performed by DEEWR assessors who had assessed  other Round One applications. The assessors were not aware that there was no  money left for funding. 

3.72 None of the applications were considered by the ARC and were not,  therefore, subject to consideration as to whether there should be any review or  adjudication  of  their  respective  scores.  Departmental  records  indicate  that  debriefs as to the reasons for a project being unsuccessful were provided to  38 of these applicants, with the recorded date of the debriefing preceding the  recorded date of the assessment for 14 applications.97  

3.73 The universally negative assessment outcome for this particular cohort  of applications is somewhat unusual, given the a pplications covered a wide  spectrum of project types from locations in each state and territory and had  sought funding ranging from $12 000 up to $2 million. This is particularly the  case given the non‐conformance with the normal assessment and deliberative  procedures for those applications. In that context, there were no documented  deliberations by the ARC98 or more broadly as to what action would or could  be taken in relation to any projects assessed as meritorious.99 In relation to the  47 applications  erroneously  allocated  to  the  IEP  stream,  DEEWR  advised  ANAO that: 

If  one  of  the  projects  which  had  been  sent  to  Infrastructure  in  error  and  returned  had  been  assessed  as  worthy,  the  process  allowed  for  it  to  be  considered for funding either through funds from withdrawn projects or from  funding  adjustments  to  other  projects  following  funding  agreement 

                                                       97 The date of the debrief to the applicant on the reasons for their proposal not being successful preceded the recorded date of the relevant assessment by periods ranging from five days to 42 days.

98 After its final meeting on 13 August 2009, the ARC did not re-convene until 17 December 2009. 99 Similar issues arise in respect to a further application for which an assessment template was completed on 1 November

2009 after it was discovered, in the course of preparing a response to Ministerial correspondence, that the application had not been assessed in the first round.

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negotiations, or the organisation would have been advised to resubmit under  Round Two. 

3.74 There was no contemporaneous record of these matters having been  considered,  including  as  to  how  any  funding  that  may  become  available  through the means referred to in DEEWR’s advice should be made available  for re‐allocation in the context of a competitive grant program. Specifically,  whether  it  would  be  appropriate  for  applicants  that  had  been  adversely  affected by procedural errors to be given priority access to that funding, or  whether the merits of those particular applicants should be compared to those  of other unfunded first round applications in order to allocate the funding to  the  most  meritorious  became  particularly  relevant  in  dealing  with  the  applications excluded from the first round assessment process on the basis of  being submitted electronically that related to bike path projects. 

Assessment and approval of bike path projects

3.75 A  DEEWR  file  note  recorded  that  DEEWR  initially  discussed  the  allocation  of  a  further  34  bike  path  projects  with  the  then  DITRDLG  on  12 October 2009, followed by further discussions on 26 October 2009. The file  note recorded that DITRDLG had advised DEEWR that: 

 it would not be accepting the applications into the quarantined bike  path  component   as  it  had  very  little  money  left  to  allocate  to  any  further projects and notice of these applications had been received too  late to enable DITRDLG to assess them; and 

 if DITRDLG was required to provide advice to the relevant applicants,  it would be advising them that, as a result of receiving the applications  too late from DEEWR, the department was unable to assess them.100 

3.76 On 13 November 2009, DEEWR advised DITRDLG that its preference,  based  on  probity  advice,  was  ‘to  have  these  applications  assessed  and  successful projects funded.’ DEEWR proposed two options for achieving this,  as follows: 

1. Consider them as part of your process. As mentioned, we could look to  sourcing some funds from within DEEWR (or could use IEP), and we could 

                                                       100 The file note further recorded that DEEWR had advised that DITRDLG could, alternatively, advise the applicants it was unable to assess the projects as a result of not receiving a hard copy. In this respect, based on probity advice, DEEWR

had written to similarly affected applicants on 12 October 2009 seeking an authorisation form to enable it to proceed with assessment (see paragraph 3.68).

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negotiations, or the organisation would have been advised to resubmit under  Round Two. 

3.74 There was no contemporaneous record of these matters having been  considered,  including  as  to  how  any  funding  that  may  become  available  through the means referred to in DEEWR’s advice should be made available  for re‐allocation in the context of a competitive grant program. Specifically,  whether  it  would  be  appropriate  for  applicants  that  had  been  adversely  affected by procedural errors to be given priority access to that funding, or  whether the merits of those particular applicants should be compared to those  of other unfunded first round applications in order to allocate the funding to  the  most  meritorious  became  particularly  relevant  in  dealing  with  the  applications excluded from the first round assessment process on the basis of  being submitted electronically that related to bike path projects. 

Assessment and approval of bike path projects

3.75 A  DEEWR  file  note  recorded  that  DEEWR  initially  discussed  the  allocation  of  a  further  34  bike  path  projects  with  the  then  DITRDLG  on  12 October 2009, followed by further discussions on 26 October 2009. The file  note recorded that DITRDLG had advised DEEWR that: 

 it would

 not be accepting the applications into the quarantined bike  path  component  as  it  had  very  little  money  left  to  allocate  to  any  further projects and notice of these applications had been received too  late to enable DITRDLG to assess them; and 

 if DITRDLG was required to provide advice to the relevant applicants,  it would be advising them that, as a result of receiving the applications  too late from DEEWR, the department was unable to assess them.100 

3.76 On 13 November 2009, DEEWR advised DITRDLG that its preference,  based  on  probity  advice,  was  ‘to  have  these  applications  assessed  and  successful projects funded.’ DEEWR proposed two options for achieving this,  as follows: 

1. Consider them as part of your process. As mentioned, we could look to  sourcing some funds from within DEEWR (or could use IEP), and we could 

                                                       100 The file note further recorded that DEEWR had advised that DITRDLG could, alternatively, advise the applicants it was unable to assess the projects as a result of not receiving a hard copy. In this respect, based on probity advice, DEEWR

had written to similarly affected applicants on 12 October 2009 seeking an authorisation form to enable it to proceed with assessment (see paragraph 3.68).

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assist  with  the  assessment.  This  option  is  only  possible  if  your  Minister  is  agreeable, given he is the delegate. 

2. Consider them as part of our process. An alternate option could be to have  these referred back to us for consideration under our Local Jobs stream. We  had always said that if Bike path applications came in after your funds were  exhausted it would be possible to have them considered as part of our stream.  Given the differences in assessment processes, we would need to write to them  all and say that they had not been considered under the Bike Path process but  would be considered under LJ. Again we would need to source some funds (as  our  stream  has  been  exhausted  for  Round  1  and  excludes  Councils  for  Round 2) and we would probably still need agreement from your [Minister’s  Office] at least.  

3.77 In this case, contrary to the earlier approach, there was consideration  prior to the bike path projects being assessed of the need to identify a funding  source that could be utilised should any of the projects prove to have merit.  DITRDLG  s

ubsequently  confirmed  that  its  Minister  had  agreed  the  applications should be referred back to DEEWR. DITRDLG further indicated it  was  prepared  to  assist  with  the  assessment  process,  but  would  not  be  providing any funding.  

3.78 The  second  round  of  the  Jobs  Fund  opened  to  applications  on  5 November  2009.  The  34  bike  path  applicants  from  the  first  round  were  emailed by DEEWR on 24 November 2009 in the same terms as the email sent  to  other  affected  applicants  on  12  October  2009  (see  paragraph  3.68),  requesting  that  they  forward  a  signed  legal  authorisation  form  by  2 December 2009.  On  the  same  day,  DEEWR  advised  its  internal  legal  area  that: 

... We will progress with assessment of these projects under the Local Jobs  stream, applying our criteria.101 I will be seeking information from DITRDLG  regarding their process for bike path applications which may assist us with  regard to consistency with those that have been assessed by DITRDLG insofar  as reducing the potential for major anomalies. As the applications are Round 1,  [the same departmental official] will be the delegate. 

                                                       101 The program guidelines stipulated additional eligibility and other criteria for the quarantined bike path component, including that projects be completed by 30 June 2010 (compared to 30 June 2011 for the DEEWR-administered

components) and a requirement for at least 50 per cent co-funding (no such stipulation had applied to any other component). Internal DEEWR legal advice was that it was open to DEEWR to consider these bike path projects under the general component of the LJ stream.

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3.79 One  of  the  bike  path  applicants  withdrew  their  application,  and  assessments  were  completed  by  DEEWR  in  respect  to  the  remaining  33 applications against the criteria applying to the general component of the  LJ stream over the course of November and December 2009. 

3.80 On 21 December 2009, the ARC met to discuss outstanding issues from  the first round and to receive advice in relation to the second round that closed  on  11  December  2009.  The  issues  discussed  in  relation  to  the  first  round  included the likely withdrawal of a GCW project approved for $2 million, with  the ARC noting that: 

... should [the applicant] withdraw, this would free up $2 million in Jobs Fund  funds from Jobs Fund Round 1 (GCW stream) and that a brief to the Minister  for Employment Participation would be prepared on the use of the freed up  funds. 

3.81 The assessment outcomes for the 33 bike path projects were presented  to the same meeting for decision by the delegate (who was also chairing the  meeting).102 An agenda paper provided to the meeting noted the background  to these applications being considered by DEEWR and advised that, from a  legal and probity p erspective, it would have been best for the proposals to be  considered by DITRDLG as the assessment process would be consistent with  that used for other bike path projects and unsuccessful applicants would not  be able to argue that they may have been successful had that process been  followed in their case. The ARC was further advised that, to mitigate this risk,  DITRDLG had offered to assist in the assessment process.103 

3.82 The  ARC  was  advised  that  total  funding  available  at  that  time  was  $282 325, which had arisen as a result of funding negotiations in which first  round proponents had identified some funds were not required. However, the  ARC  was  further  advised  that  this  may  be  increased  by  $2 million  should  additional  funds  become  available  through  the  withdrawal  of  the  GCW project. Eight of the 33 bike path projects, seeking $1.75 million, had been  allocated  eligible,  but  modest,  scores  (four  with  aggregate  gateway  criteria 

                                                       102 The agenda paper provided to the ARC in relation to this item advised that: ‘As these applications have been received in response to Round 1, the funding approver will be the Departmental delegate.’ 103

The paper further advised that: ‘In order to reduce the potential for inconsistency, [DEEWR] has been in contact with DITRDLG to seek information on their processes for assessing bike paths projects and this information has been applied by DEEWR’s assessors. In addition, two staff from DITRDLG’s Infrastructure Branch were seconded to DEEWR to assist in the assessment process.’ In this respect, the decision as to which, if any, of the projects considered through the DEEWR process may have been approved had they participated in the competitive selection process for the quarantined bike path component would have been based on a quite different approach than that applied by DEEWR (see ANAO Audit Report No.27 2011-12, op. cit., pp. 47 to 124).

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3.79 One  of  the  bike  path  applicants  withdrew  their  application,  and  assessments  were  completed  by  DEEWR  in  respect  to  the  remaining  33 applications against the criteria applying to the general component of the  LJ stream over the course of November and December 2009. 

3.80 On 21 December 2009, the ARC met to discuss outstanding issues from  the first round and to receive advice in relation to the second round that closed  on  11  December  2009.  The  issues  discussed  in  relation  to  the  first  round  included the likely withdrawal of a GCW project approved for $2 million, with  the ARC noting that: 

... should [the applicant] withdraw, this would free up $2 million in Jobs Fund  funds from Jobs Fund Round 1 (GCW stream) and that a brief to the Minister  for Employment Participation would be prepared on the use of the freed up  funds. 

3.81 The assessment outcomes for the 33 bike path projects were presented  to the same meeting for decision by the delegate (who was also chairing the  meeting).102 An agenda paper provided to the meeting noted the background  to these applications being considered by D EEWR and advised that, from a  legal and probity perspective, it would have been best for the proposals to be  considered by DITRDLG as the assessment process would be consistent with  that used for other bike path projects and unsuccessful applicants would not  be able to argue that they may have been successful had that process been  followed in their case. The ARC was further advised that, to mitigate this risk,  DITRDLG had offered to assist in the assessment process.103 

3.82 The  ARC  was  advised  that  total  funding  available  at  that  time  was  $282 325, which had arisen as a result of funding negotiations in which first  round proponents had identified some funds were not required. However, the  ARC  was  further  advised  that  this  may  be  increased  by  $2 million  should  additional  funds  become  available  through  the  withdrawal  of  the  GCW project. Eight of the 33 bike path projects, seeking $1.75 million, had been  allocated  eligible,  but  modest,  scores  (four  with  aggregate  gateway  criteria 

                                                       102 The agenda paper provided to the ARC in relation to this item advised that: ‘As these applications have been received in response to Round 1, the funding approver will be the Departmental delegate.’ 103

The paper further advised that: ‘In order to reduce the potential for inconsistency, [DEEWR] has been in contact with DITRDLG to seek information on their processes for assessing bike paths projects and this information has been applied by DEEWR’s assessors. In addition, two staff from DITRDLG’s Infrastructure Branch were seconded to DEEWR to assist in the assessment process.’ In this respect, the decision as to which, if any, of the projects considered through the DEEWR process may have been approved had they participated in the competitive selection process for the quarantined bike path component would have been based on a quite different approach than that applied by DEEWR (see ANAO Audit Report No.27 2011-12, op. cit., pp. 47 to 124).

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scores of ten and four with the minimum eligible gateway score of nine). The  highest ranked project (seeking $288 364) was recommended to the delegate,  with  the  remaining  seven  eligibly‐scored  projects  also  being  recommended  subject to available funds, on the basis: 

... all eight projects in this group have demonstrated clear community benefit  and  strong  linkages  within  the  local  community,  would  result  in  good  employment  and  training  outcomes  for  disadvantaged  jobs  seekers  and  represent value for money. 

3.83 The delegate agreed in principle to fund one project104 and, subject to  available funds, all remaining seven projects that had passed the minimum  criteria thresholds. A letter confirming withdrawal of the GCW project was  received later on 21 December 2009, and the delegate approved all eight bike  path projects on 7 January 2010. There was no documented consideration as to  how  the  merits  of  those  eight  projects  compared  to  those  of  the  remaining  unfunded projects submitted to the first round of the Jobs Fund. 

Conclusion 3.84 The targeted stimulus objective of the Jobs Fund was reflected in the  three gateway criteria and four target areas set  out in the program guidelines  as  the  criteria  on  which  projects  would  be  selected.  Projects  would  also  be  subject to due diligence and risk assessment, including that applications would  need  to  demonstrate  that  the  project  represented  value  for  money  for  the  Australian  Government.  The  program  guidelines  stated  that  each  proposal  would  be  assessed  on  its  merits,  and  in  comparison  to  other  proposals  submitted at the same time or previously. 

3.85 Projects  were  assessed  and  scored  against  the  gateway  criteria  and  target  areas.  To  be  eligible  for  funding  consideration,  a  project  needed  to  achieve at least the minimum identified pass score against each of the three  gateway  criteria  and  at  least  one  of  the  four  target  areas.  However,  the  selection  methodology  did  not  seek  to  encapsulate  within  the  assessment  scores  all  factors  that  would  be  taken  into  account  in  selecting  projects  for 

                                                       104 The advice provided to the delegate had noted that the second ranked project would result in a greater number of employment outcomes than the project then prioritised for approval. It was agreed that the relative merits of both

proposals would be reviewed in order to determine the best value for money. The ARC was to provide advice out of session, with the delegate to approve whichever of the two proposals represented the better value for money. After receiving confirmation the same day that the GCW project had been withdrawn, it was agreed it was not necessary to clarify the jobs outcomes for the second ranked project prior to approval, but ‘we will need to clarify for all 8 projects prior to announcing them.’

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approval. In particular, there was no provision for an assessment of the value  for money factors identified in the program guidelines to be incorporated into  the scores assigned to each project. These aspects were to be considered as part  of  the  deliberations  of  the  ARC.  As it  eventuated,  173 (43 per  cent)  of  the  405 projects that achieved eligible scores were approved (64 under LJ stream  and 109 under GCW). 

3.86 The  ARC  deliberative  process  involved  a  significant  resource  commitment  at  a  senior  level  and  was  generally  well  documented.  The committee members exhibited awareness of the need to consider overall  merit in making decisions in relation to individual projects. However, aspects  of the approach taken diminished the capacity for the documented selection  process  to  demonstrate  that  the  173 approved  projects  were  the  most  meritorious (in terms of the published program guidelines) of the more than  1600 applications considered. This included that, despite the Jobs Fund being  conducted as a nationally competitive grant program: 

 the  applications  received  were  not  considered  as  a  single,  ranked  population  based  on  their  respective  scores  against  the  selection  criteria.  The  deliberative  process  involved  25  meetings  over  seven  weeks, with decisions being taken on a project by project basis  (with  projects being considered in groups based upon the PEA in which they  were located). That process did not seek to explicitly demonstrate, prior  to  decisions  being  taken,  the  merits  of  each  proposal  relative  to  all  competing  proposals.  A mechanism  for  incorporating  the  ARC’s  conclusions  regarding  each  project’s  claims  against  the  program  guidelines, including in relation to value for money, into a final score or  rating  was  not  established.  Eligible  projects  were  not  ranked  on  a  national basis (either overall or within each stream) at the conclusion of  the ARC process; and 

 projects were approved in three tranches, with some being approved  before  all  competing  applications  had  been  considered  (or,  in  some  cases, assessed). The first two tranches were based entirely on projects  in the 20 PEAs and Victorian bushfire area to the exclusion of other  projects, regardless of their respective selection criteria scores. A first  tranche of 13 projects in four areas prioritised for consideration due to  upcoming Jobs Expos was approved on 10 July 2009, at which time the  ARC had considered only 15 per cent of applications. On 31 July 2009,  $107.61 million  was  approved  for  125 projects  located  in  a  PEA,  i

ncluding the 13 first tranche projects. This more than exhausted the 

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approval. In particular, there was no provision for an assessment of the value  for money factors identified in the program guidelines to be incorporated into  the scores assigned to each project. These aspects were to be considered as part  of  the  deliberations  of  the  ARC.  As it  eventuated,  173 (43 per  cent)  of  the  405 projects that achieved eligible scores were approved (64 under LJ stream  and 109 under GCW). 

3.86 The  ARC  deliberative  process  involved  a  significant  resource  commitment  at  a  senior  level  and  was  generally  well  documented.  The committee members exhibited awareness of the need to consider overall  merit in making decisions in relation to individual projects. However, aspects  of the approach taken diminished the capacity for the documented selection  process  to  demonstrate  that  the  173 approved  projects  were  the  most  meritorious (in terms of the published program guidelines) of the more than  1600 applications considered. This included that, despite the Jobs Fund being  conducted as a nationally competitive grant program: 

 the  applications  received  were  not  considered  as  a  single,  ranked  population  based  on  their  respective  scores  against  the  selection  criteria.  The  deliberative  process  involved  25  meetings  over  seven  weeks, with decisions being taken on a project by project basis  (with  projects being considered in groups based upon the PEA in which they  were located). That process did not seek to explicitly demonstrate, prior  to  decisions  being  taken,  the  merits  of  each  proposal  relative  to  all  competing  proposals.  A mechanism  for  incorporating  the  ARC’s  conclusions  regarding  each  project’s  claims  against  the  program  guidelines, including in relation to value for money, into a final score or  rating  was  not  established.  Eligible  projects  were  not  ranked  on  a  national basis (either overall or within each stream) at the conclusion of  the ARC process; and 

 projects were approved in three tranches, with some being approved  before  all  competing  applications  had  been  considered  (or,  in  some  cases, assessed). The first two tranches were based entirely on projects  in the 20 PEAs and Victorian bushfire area to the exclusion of other  projects, regardless of their respective selection criteria scores. A first  tranche of 13 projects in four areas prioritised for consideration due to  upcoming Jobs Expos was approved on 10 July 2009, at which time the  ARC had considered only 15 per cent of applications. On 31 July 2009,  $107.61 million  was  approved  for  125 projects  located  in  a  PEA,  i

ncluding the 13 first tranche projects. This more than exhausted the 

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available  funding,  such  that  the  merits  of  non‐PEA  projects  had  not  been  considered.  The  then  Minister  for  Employment  Participation  subsequently agreed to allocate up to a further $40 million to the first  round,  with  the  Minister  asking  for  projects  to  be  re‐assessed  on  a  national basis. The ARC then considered the merits of 120 projects not  located in a PEA, more than a third of which (41, 34 per cent) were  approved on 14 August 2009. A further seven PEA projects were also  approved,  resulting  in  a  final  first  round  outcome  of  173  projects  approved for funding totalling $132.3 million. 

3.87 Subsequent  to  the  conclusion  of  the  first  round  of  the  LJ  and  GCW streams, assessment processes were applied by DEEWR in respect to at  least 226 projects incorrectly excluded from the competitive selection process  as a result of various errors and anomalies (as discussed in chapter 2 of this  report). Similar to the approach taken in respect to the substantive first round  selection  process,  DEEWR  did  not  seek  to  establish,  through  a  consistent  assessment and deliberative process, the merit of each of those projects relative  to the overall population of proposals received in response to the  first call for  applications. In particular, DEEWR considered those additional proposals in  separate tranches, including a final tranche involving 33 bike path projects that  had not been appropriately referred to the quarantined bike path component  prior to that component’s funding being exhausted. In agreeing to apply funds  that had become available from previously approved GCW and LJ projects to  approve (under the general component of the LJ stream) all eight of those bike  path projects that achieved at least the minimum scores required for funding  consideration, DEEWR did not seek to establish whether those projects were  the most meritorious of all of the as yet unfunded first round applications in  terms the program objectives and guidelines. 

3.88 Having regard for the context in which the Jobs Fund was established,  the  department’s  focus  on  ensuring  funding  was  directed  to  the  areas  identified  as  being  at  greatest  risk  as  a  result  of  the  economic  downturn  (that is, the PEAs) was reasonable. Indeed, the selection approach adopted by  DEEWR had considerably greater regard for this key aspect of the program  than did the selection processes undertaken in respect to the other Jobs Fund  components that have been examined by ANAO.  

3.89 However, c are needed to be taken to ensure the implementation of that  policy  intention  remained  consistent  with  the  principles  of  sound  grants  administration. In particular, it is inconsistent with the effective conduct of a  nationally  competitive  grant  program  to  take  funding  decisions  before  all 

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applications have been assessed. The guidelines also made no reference to the  defined PEAs, instead including the broader requirement for projects to be in  an area experiencing high or increasing unemployment or vulnerability (with a  project being located in a PEA representing one way this criterion could be  assessed as being met). An assessment of the extent to which that criterion had  been  met  also  involved  consideration  of  the  nature  of  the  employment  stimulus  that  would  be  generated  in  the  relevant  area  of  disadvantage.  Based on  the  assessment  methodology  adopted  by  DEEWR,  the  extent  to  which each project satisfied the program priorities relative to other projects  should have been reflected in the scored assessments. 

3.90 In that context, despite the processes applied by DEEWR to promote  the quality and consistency of the scored assessment process, the final scores  assigned to competing projects did not prove to be a strong indicator of the  projects that would be selected. The inclusion of a mechanism to establish a  final  merit  ranking  of  competing  projects  incorporating  relevant  ARC  deliberations  would  have  enhanced  the  capacity  to  demonstrate  that  the  funded projects represented the most meritorious in terms of the published  program guidelines. It would  also have provided a means of reconciling the  assessment criteria scores allocated to each project with the selection process  outcome in a manner that the brief qualitative comments recorded by the ARC  in relation to individual projects had a limited capacity to do. In that respect, at  the conclusion of the selection process, there were nearly the same number of  unapproved  projects  with  eligible  gateway  scores  of  10 or  more  out  of  the  maximum score of 15 (144 projects), as there were approved projects with the  minimum pass score of nine (145 projects). 

 

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applications have been assessed. The guidelines also made no reference to the  defined PEAs, instead including the broader requirement for projects to be in  an area experiencing high or increasing unemployment or vulnerability (with a  project being located in a PEA representing one way this criterion could be  assessed as being met). An assessment of the extent to which that criterion had  been  met  also  involved  consideration  of  the  nature  of  the  employment  stimulus  that  would  be  generated  in  the  relevant  area  of  disadvantage.  Based on  the  assessment  methodology  adopted  by  DEEWR,  the  extent  to  which each project satisfied the program priorities relative to other projects  should have been reflected in the scored assessments. 

3.90 In that context, despite the processes applied by DEEWR to promote  the quality and consistency of the scored assessment process, the final scores  assigned to competing projects did not prove to be a strong indicator of the  projects that would be selected. The inclusion of a mechanism to establish a  final  merit  ranking  of  competing  projects  incorporating  relevant  ARC  deliberations  would  have  enhanced  the  capacity  to  demonstrate  that  the  funded projects represented  the most meritorious in terms of the published  program guidelines. It would also have provided a means of reconciling the  assessment criteria scores allocated to each project with the selection process  outcome in a manner that the brief qualitative comments recorded by the ARC  in relation to individual projects had a limited capacity to do. In that respect, at  the conclusion of the selection process, there were nearly the same number of  unapproved  projects  with  eligible  gateway  scores  of  10 or  more  out  of  the  maximum score of 15 (144 projects), as there were approved projects with the  minimum pass score of nine (145 projects). 

 

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4. Second Round Selection Processes

This chapter examines the assessment and selection processes undertaken by DEEWR  in respect to the second round of the Jobs Fund. 

Introduction 4.1 As  discussed  at  paragraphs  1.15  to  1.19,  it  had  been  agreed  by  government that revised, tighter guidelines needed to be developed for the  second round of the Jobs Fund in order to give stronger direction on the nature  of projects expected to be funded, and to assist proponents in shaping their  applications.  Revised,  separate  guidelines  for  both  streams  were  agreed  on  21 October 2009. The second round was announced on 5 November 2009 and  closed to applications on 11 December 2009. In that context, ANAO examined  the processes applied under the second round in relation to: 

 assessing proposals against the published selection criteria; and 

 formulating funding recommendations based upon proposals’ relative  merits in terms of the program guidelines and objectives. 

4.2 Following  the  re‐targeting  process,  there  was  a  clear  separation  between  the  LJ  and  GCW  streams  for  the  second  round,  with  applicants  applying  to  either  stream  addressing  the  relevant  criteria.  However,  particularly  in  the  selection  of  the  final  package  of  approved  projects,  the  consideration  of  projects  from  both  streams  became  somewhat  conjoined.  Consequently, aspects of the  analysis in this chapter are necessarily based on  the collective selection process undertaken by DEEWR for the second round. 

Assessing proposals against published selection criteria 4.3 The program guidelines for the second round of the LJ stream stated  that it would fund job creation projects that benefited the local community and  had  a  positive  impact  on  the  environment.  The  guidelines  identified  five  assessment criteria (see Table 4.1), with projects being required to meet all five  criteria in order to be considered for funding. The same selection criteria were  identified  for  the  GCW  stream,  apart  from  the  first  criterion.  The  program  guidelines stated that projects would be assessed against the five assessment  criteria, other applicable requirements, and due diligence and risk assessment.  The assessment methodology was similar to the first round, with both scored  and un‐scored elements.  

   

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4.4 Scores  were  allocated  against  the  five  selection  criteria  as  set  out  in  Table 4.1. The assessment template and an associated guide advised assessors  on  the  matters  they  should  consider  in  relation  to  each  criterion,  which  reflected  the  matters  the  program  guidelines  had  advised  applicants  to  address. The assessment guidelines provided guidance on rating the claims  made in an application against a criterion and the resulting score. 

Table 4.1

Scoring methodology applied in the second funding round

Criteria set out in Guidelines Scoring Scale

Projects which do not meet all five criteria will not be considered:

1. Have a positive impact on the environment. Projects allocated a score of between zero and five against each criterion based on ratings of:

 Very strong = 5

 Strong = 4

 Suitable/Adequate = 3 -------------------------------- Pass threshold for each

criterion

 Weak = 2

 Very poor = 1

 Did not address = 0 Scores aggregated to maximum total score of 25.

2. Create and retain jobs and develop skills.

3. Assist disadvantaged groups/regions.

4. Have strong community linkages.

5. Be sustainable and viable.

Aggregate assessment outcome

Pass = Aggregate score of 15 or more, with a minimum score of 3 against each criterion. Fail = a project with less than 3 against any criterion, regardless of aggregate score.

Source: DEEWR assessment methodology for the second funding round of the Jobs Fund.

Unscored assessment elements

4.5 The program guidelines provided that projects would be subject to due  diligence and risk assessment ‘as appropriate’, and that this would include an  assessment of the financial viability of the applicant organisation. Unlike for  the first round (see paragraph 3.8), this section did not include reference to the 

   

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4.4 Scores  were  allocated  against  the  five  selection  criteria  as  set  out  in  Table 4.1. The assessment template and an associated guide advised assessors  on  the  matters  they  should  consider  in  relation  to  each  criterion,  which  reflected  the  matters  the  program  guidelines  had  advised  applicants  to  address. The assessment guidelines provided guidance on rating the claims  made in an application against a criterion and the resulting score. 

Table 4.1

Scoring methodology applied in the second funding round

Criteria set out in Guidelines Scoring Scale

Projects which do not meet all five criteria will not be considered:

1. Have a positive impact on the environment. Projects allocated a score of between zero and five against each criterion based on ratings of:

 Very strong = 5

 Strong = 4

 Suitable/Adequate = 3 -------------------------------- Pass threshold for each

criterion

 Weak = 2

 Very poor = 1

 Did not address = 0 Scores aggregated to maximum total score of 25.

2. Create and retain jobs and develop skills.

3. Assist disadvantaged groups/regions.

4. Have strong community linkages.

5. Be sustainable and viable.

Aggregate assessment outcome

Pass = Aggregate score of 15 or more, with a minimum score of 3 against each criterion. Fail = a project with less than 3 against any criterion, regardless of aggregate score.

Source: DEEWR assessment methodology for the second funding round of the Jobs Fund.

Unscored assessment elements

4.5 The program guidelines provided that projects would be subject to due  diligence and risk assess ment ‘as appropriate’, and that this would include an  assessment of the financial viability of the applicant organisation. Unlike for  the first round (see paragraph 3.8), this section did not include reference to the 

Second Round Selection Processes

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need  to  demonstrate  value  for  money  and  the  basis  for  assessing  that.105  The internal assessment guidelines stated that assessors would conduct a due  diligence and risk assessment on proposals as appropriate, and consider: 

 cost effectiveness; 

 ability to complete the project on time and within budget; and 

 sustainability. 

4.6 These factors were to be taken into account in the ‘overall assessment’106  recorded  on  the  project’s  assessment  report.  As  with  the  first  round,  the  assessment methodology did not include the explicit assignment of scores in  relation to the due diligence and risk assessment undertaken in respect to a  project.  In  this  respect,  the  latter  two  of  the  three  factors  identified  in  the  assessment  guidelines  for  consideration  in  the  due  diligence  and  risk  assessment  significantly  overlapped  with  the  fifth  assessment  criterion  and  could, therefore, reasonably be expected to have been reflected in the score  allocated against that criterion.  

Overall merit assessment

4.7 The  scores achieved  by  a  project  against  the  five  assessment  criteria  were  aggregated  to  provide  an  overall  score  and  a  pass  or  fail  assessment  outcome.  As  Table  4.1  illustrates,  a  minimum  score  o f  three  was  required  against each criterion in order to achieve a ‘pass’, regardless of the aggregate  score achieved. Reflecting the department’s experience with the methodology  initially established for the first round107, this approach ensured that a high  score against one criterion could not offset a failure to meet another, and was  consistent with the threshold requirements and equal weighting applied to all  five criteria by the program guidelines.  

4.8 The assessment guidelines indicated that all projects that achieved a  score of at least three against each of the five criteria would be categorised as 

                                                       105 The only reference to value for money was the retention of a statement from the first round which, in the context of advising that successful proponents must not begin project activities until a funding agreement had been signed, also

advised that: ‘Funding will be based on the GST exclusive budget submitted in the proposal…The budget must provide a breakdown of income and expenditure by item and detail funding received from the relevant program as well as from other sources. The budget should also demonstrate that the expenditure items provide value for money and withstand public scrutiny.’ 106

See paragraph 4.9. 107 See paragraphs 3.46 to 3.48.

   

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‘highly ranked’.108 However, in practice, this actually related to the projects  that had the minimum scores required to be eligible for funding consideration  and included projects with scores ranging from the minimum pass score of  15 to the maximum available score of 25.  

4.9 The ‘overall assessment’ section of the assessment template required  assessors to record qualitative answers, including as to whether: the proponent  had demonstrated the activities were clearly additional to those that would  have  occurred  in  the  absence  of  funding;  the  proposal  met  the  factors  identified in the assessment guide under the due diligence and risk assessment  (see  paragraph  4.6);  the  proposal  was  readily  able  to  be  part‐funded;  and  comments from the relevant LEC were available at the time of assessment.109  Assessors were also to complete  a ‘justification’ statement and identify any  points for clarification or negotiation. The assessment guide instructed that: 

An independent person who has no expert knowledge should be able to read  the justification statement and understand the reasons for the score allocated.  An  independent  person  should  not  have  to  read  the  claims  made  in  the  application to understand the reasons for the score given. 

4.10 DEEWR adopted similar measures to those used in the  first round to  promote the quality and consistency of the assessment process. This included  the development of comprehensive procedural documentation and associated  training, with the latter being enhanced from that provided in relation to the  first  round  based  on  experience  gained.  Moderation  and  quality  assurance  processes similar to those applied in the first round were also implemented.  

4.11 Following the moderated assessment process, projects were considered  by  the  ARC  to  determine  which  would  be  recommended  for  approval.  The procedural guides prepared in respect to the second round provided that  the  ARC  could  request  a  review  of  individual  proposals’  scores  before  deciding on which proposals to recommend to the delegate.  

Other assessment processes

4.12 The  program  guidelines  stated  that  the  Australian  Government  reserved the right to contact a proponent and seek further information about 

                                                       108 For example, the guidelines stated: ‘A financial viability assessment will be undertaken of those organisations that are highly ranked ie receive a score of at least 3 against each of the five assessment criteria.’ 109

See paragraphs 4.12 to 4.15.

   

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‘highly ranked’.108 However, in practice, this actually related to the projects  that had the minimum scores required to be eligible for funding consideration  and included projects with scores ranging from the minimum pass score of  15 to the maximum available score of 25.  

4.9 The ‘overall assessment’ section of the assessment template required  assessors to record qualitative answers, including as to whether: the proponent  had demonstrated the activities were clearly additional to those that would  have  occurred  in  the  absence  of  funding;  the  proposal  met  the  factors  identified in the assessment guide under the due diligence and risk assessment  (see  paragraph  4.6);  the  proposal  was  readily  able  to  be  part‐funded;  and  comments from the relevant LEC were available at the time of assessment.109  Assessors were also to complete  a ‘justification’ statement and identify any  points for clarification or negotiation. The assessment guide instructed that: 

An independent person who has no expert knowledge should be able to read  the justification statement and understand the reasons for the score allocated.  An  independent  person  should  not  have  to  read  the  claims  made  in  the  application to understand the reasons for the score given. 

4.10 DEEWR adopted similar measures to those used in the  first round to  promote the quality and consistency of the assessment process. This included  the development of comprehensive procedural documentation and associated  training, with the latter being enhanced from that provided in relation to the  first  round  based  on  experience  gained.  Moderation  and  quality  assurance  processes similar to those applied in the first round were also implemented.  

4.11 Following the moderated assessment process, projects were considered  by  the  ARC  to  determine  which  would  be  recommended  for  approval.  The procedural guides prepared in respect to the second round provided that  the  ARC  could  request  a  review  of  individual  proposals’  scores  before  deciding on which proposals to recommend to the delegate.  

Other assessment processes

4.12 The  program  guidelines  stated  that  the  Australian  Government  reserved the right to contact a proponent and seek further information about 

                                                       108 For example, the guidelines stated: ‘A financial viability assessment will be undertaken of those organisations that are highly ranked ie receive a score of at least 3 against each of the five assessment criteria.’ 109

See paragraphs 4.12 to 4.15.

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the  proposal,  and  to  undertake  consultations  with  other  relevant  parties  including  the  LEC  where  relevant.  The  internal  assessment  guidelines  provided  for  LECs  to  be  consulted  in  two  stages.  The  first  stage  involved  seeking  LEC’s  comments  on  projects  submitted  for  assessment—LECs  were  initially  provided  with  access  to  lists  of  projects  in  each  PEA,  but  it  was  subsequently  agreed  that  LECs  could  comment  on  other  projects  in  their  state.110  

4.13 Projects  were  again  referred  to  LECs  for  comment  once  assessment  against  the  selection  criteria  was  completed,  with  those  comments  to  be  considered by the ARC before making its recommendations. In this respect, the  assessment guidelines endorsed by the ARC on 28 January 2010 stated that  those projects with a score of at least three for each criterion (which, as noted at  paragraph 4.8, comprised the category of ‘highly ranked’ projects) would be  referred to LECs for comment. However, the spreadsheets provided to LECs  included projects with scores of 15 or higher but which had failed to meet all  criteria, in respect to which some LECs provided supportive comments. 

4.14 Comments were also sought from DEEWR state office managers111 in  relation to the projects in their state with a score o f 15 or higher, including  projects that had failed to meet all criteria. The spreadsheet provided included  each project’s total score, but state offices were generally aware of the criteria  scores given assessments were primarily conducted in the relevant state office.  

4.15 In providing comments, some LECs and state managers also asked that  projects that had not achieved a score of 15 and were not, therefore, included  in the list of projects sent for comment be reconsidered. In a small number of  cases  (15  across  the  two  streams), the  ARC  asked  for  projects’  scores  to  be  reviewed  in  light  of  the  comments  received  to  confirm  they  were  correct. 

                                                       110 The assessment guidelines stated that LECs should endeavour to provide comments on proposals they had been working with proponents on or that they were aware of; and may also wish to provide comments on proposals they were

aware were not strong, or organisations they considered may have difficulty successfully delivering projects, or the reverse. LECs were not required to comment on every proposal submitted or on every proposal/proponent they had had contact with. 111 The assessment guidelines did not set out a process for obtaining comments from state managers as an input to the ARC deliberative process, other than to say that, as part of its responsibilities, ‘…ARC members may choose to review a sample of completed assessments. This is a separate process to the clearance of justification statements by the Moderators, reviews conducted by State Managers and input sought from Local Employment Coordinators.’ The project selection and approval guidelines stated that: ‘State Managers and Local Employment Coordinators will review proposals in their respective States or priority employment areas which have been recommended by ARC prior to these proposals being submitted to the Delegate. ARC will take into account any comments received by the State Manager and relevant Local Employment Coordinator in finalising its recommendations. A State Manager may discuss particulars of an individual proposal and the assessment with the relevant moderator.’ [ANAO emphasis] As noted at paragraph 4.14, comments were sought on all projects that achieved a score of 15 or more.

   

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This resulted in the score for two LJ projects being increased to a pass (neither  of which was approved), and one project’s fail score being further reduced. 

National merit ranking

4.16 As a result of the moderated assessment process: 

 91 (25 per  cent)  of  the  365112  LJ  stream  applications  achieved  eligible  pass scores, with aggregate scores ranging from 15 to 23; and 

 181 (30 per cent) of the 605 GCW stream applications achieved eligible  pass scores of between 15 and 25.113 

4.17 The rate at which applications had been assessed as at least marginally  suitable for funding (28 per cent overall) was similar to that achieved in the  first round of 25 per cent (see paragraph 3.18). In this respect, as discussed at  paragraph 1.15, in agreeing to a second round of the Jobs Fund, the SPBC had  been advised that the first round had attracted a large number of proposals  that  were  not  competitive  or  well  focussed  and  that  there  was  a  need  for  tighter guidelines to be developed for future rounds of both streams.  

4.18 In  contrast  to  the  approach  taken  in  respect  to  the  first  round,  the  assessment  of  second  round  applications  against  the  selection  criteri a  was  largely completed prior to the ARC commencing its deliberations. At the time  of  the  first  meeting  at  which  projects  were  considered,  on  28 January  2010,  assessments  had  been  completed  for  879 projects  (91  per  cent  of  the  970 applications ultimately assessed).  

4.19 Also in contrast to the first round, a national merit ranking for each  stream was prepared as a basis for prioritising projects for ARC consideration,  having regard for the funding available. At the 28 January 2010 meeting, the  ARC considered an agenda paper proposing a method for considering projects  for  recommendation,  which  advised  that  the  national  rankings  (based  on  aggregate assessment scores) and cumulative funding sought, showed that: 

                                                       112 As noted, one GCW application was recommended under the LJ stream—see paragraph 4.30. 113

As Table 4.1 illustrates, the same six point scale as had been used in the first round in relation to the gateway criteria (see paragraphs 3.46 to 3.48) was used to score projects against the five selection criteria. This again affected the capacity for the scores to effectively differentiate between projects, but this was to some extent mitigated by the use of five criteria in that it provided an eleven point score range from 15 to 25 for projects with pass scores, compared to the seven point range that applied for the three gateway criteria used for ranking purposes in the first round.

   

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This resulted in the score for two LJ projects being increased to a pass (neither  of which was approved), and one project’s fail score being further reduced. 

National merit ranking

4.16 As a result of the moderated assessment process: 

 91 (25 per  cent)  of  the  365112  LJ  stream  applications  achieved  eligible  pass scores, with aggregate scores ranging from 15 to 23; and 

 181 (30 per cent) of the 605 GCW stream applications achieved eligible  pass scores of between 15 and 25.113 

4.17 The rate at which applications had been assessed as at least marginally  suitable for funding (28 per cent overall) was similar to that achieved in the  first round of 25 per cent (see paragraph 3.18). In this respect, as discussed at  paragraph 1.15, in agreeing to a second round of the Jobs Fund, the SPBC had 

been advised that the first round had attracted a large number of proposals  that  were  not  competitive  or  well  focussed  and  that  there  was  a  need  for  tighter guidelines to be developed for future rounds of both streams.  

4.18 In  contrast  to  the  approach  taken  in  respect   to  the  first  round,  the  assessment  of  second  round  applications  against  the  selection  criteria  was  largely completed prior to the ARC commencing its deliberations. At the time  of  the  first  meeting  at  which  projects  were  considered,  on  28 January  2010,  assessments  had  been  completed  for  879 projects  (91  per  cent  of  the  970 applications ultimately assessed).  

4.19 Also in contrast to the first round, a national merit ranking for each  stream was prepared as a basis for prioritising projects for ARC consideration,  having regard for the funding available. At the 28 January 2010 meeting, the  ARC considered an agenda paper proposing a method for considering projects  for  recommendation,  which  advised  that  the  national  rankings  (based  on  aggregate assessment scores) and cumulative funding sought, showed that: 

                                                       112 As noted, one GCW application was recommended under the LJ stream—see paragraph 4.30. 113

As Table 4.1 illustrates, the same six point scale as had been used in the first round in relation to the gateway criteria (see paragraphs 3.46 to 3.48) was used to score projects against the five selection criteria. This again affected the capacity for the scores to effectively differentiate between projects, but this was to some extent mitigated by the use of five criteria in that it provided an eleven point score range from 15 to 25 for projects with pass scores, compared to the seven point range that applied for the three gateway criteria used for ranking purposes in the first round.

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 for the LJ stream, approval of all projects that met all five criteria with a  total score of 18 or more would result in expenditure of $49.9 million,  compared with the budget of $51.9 million. A cut‐off score of 17 would  result in over expenditure of $59.8 million; and 

 for  the  GCW  stream,  a  cut‐off  pass  score  of  20  would  result  in  expenditure  of  $30 million  (compared  to  the  $41.4 million  available),  while a cut‐off score of 19 resulted in over‐expenditure of $48.7 million. 

4.20 On this basis, it was proposed that the ARC agree to recommend to the  delegate the projects in each state and territory that met or exceeded cut‐off  scores of 18 and 20 respectively for the relevant stream, as this represented a  cumulative allocation that was closest to the available budget on a national  basis. The ARC could then determine at the end of that process how to allocate  the remaining funds (in the light of the results of any adjudications, LEC and  state office manager comments and financial viability reports). 

4.21 At  t hat  time,  the  national  ranking  had  identified  43 LJ  projects  involving $49.9 million as meeting all five criteria and achieving total scores of  18 or higher. By the time of the ARC’s second meeting on 2 February 2010, the  number  of  eligible  LJ  projects  above  the  cut‐off  score  had  increased  to  45,  involving $50.5 million (compared to available funding of $51.9 million). 

4.22 A decision by the ARC agreeing to the proposed cut‐off scores based on  national  rankings  was  not  recorded.  Instead,  following  presentation  of  the  spreadsheet attached to the agenda paper, ARC members had: ‘noted that the  rankings are not of much value at the moment as not all assessments have been  completed or entered.’ In this respect, the meeting minutes also recorded that  all  assessments  would  be  entered  into  the  database  by  close  of  business  29 January 2010. Also at its 28 January 2010 meeting, the ARC noted that the  then Minister for Employment Participation: 

... had agreed that it is not necessary to allocate all the available funding if the  proposals fail to demonstrate positive job outcomes and value for money to  the Government. 

ARC deliberations 4.23 The ARC deliberative process was conducted through a series o f formal  meetings held over a seven week period. As with the first round, the minutes  of  each  meeting  incorporated  a  brief  statement  of  the  reason  for  decisions  made  in  respect  to  individual  projects.  The  department  also  maintained  a  spreadsheet recording the projects considered at each meeting, their respective 

   

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assessed  scores  and  any  comments  and/or  decisions  taken  by  the  ARC.  However,  the  methodology  for  determining  which  projects  would  receive  explicit consideration by the ARC evolved over the course of that process. 

State-based review of assessments

4.24 Although  the  recommended  cut‐off  score  for  each  stream  had  been  derived  from  a  merit  ranking  on  a  national  basis,  proposals  were  not  considered  by  the  ARC  in  the  order  of  their  respective  national  ranking.  Instead, proposals were considered on a state by state basis, commencing with  proposals  from  Victoria  on  28 January  2010.  A  further  three  meetings  considered projects in New South Wales; Queensland; and all remaining states  and territories. A final  meeting  was to be set  aside for a  final review on a  national basis to allocate any remaining funding. 

4.25 All proposals within each jurisdiction were listed in descending order  of aggregate score, across both streams. The recommendation provided to the  ARC  at  each  meeting  was  that  it  agree  to  recommend  to  the  delegate  the  projects in the relevant state that had achieved the cut‐off score identified for  each stream, subject to the outcomes of consideration of projects in other states;  comments  from  state  managers  and  LECs;  financial  viability  reports;  and  consideration  o

f  additional  projects  that  may  be  recommended  in  order  to  meet the full national budget allocation. 

4.26 At each meeting, the ARC made decisions to recommend some of the  projects above the respective national cut‐off scores, but to reject others. The  ARC also gave consideration to projects that had not achieved the cut‐off score,  with some being recommended. The recorded decision primarily referred to  whether each project was considered to represent good value for money in its  own  right. The  ARC  decisions  did  not  refer  to  each  project’s  relative  merit  compared to other projects. 

4.27 Over the course of the initial series of state‐based meetings, the ARC  considered the merits of all 45 LJ projects that were, at that time, at or above  the cut‐off score. The ARC agreed to recommend 24 of those projects; a further  eight were identified as possible subject to further review; and one project had  also been submitted under the GCW stream under which the ARC had agreed  to fund it. The ARC decided that the remaining 12 projects above the merit  ranking cut‐off should not be recommended, primarily on the basis of having  concluded they did not represent  value for money due to the number of jobs 

   

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assessed  scores  and  any  comments  and/or  decisions  taken  by  the  ARC.  However,  the  methodology  for  determining  which  projects  would  receive  explicit consideration by the ARC evolved over the course of that process. 

State-based review of assessments

4.24 Although  the  recommended  cut‐off  score  for  each  stream  had  been  derived  from  a  merit  ranking  on  a  national  basis,  proposals  were  not  considered  by  the  ARC  in  the  order  of  their  respective  national  ranking.  Instead, proposals were considered on a state by state basis, commencing with  proposals  from  Victoria  on  28 January  2010.  A  further  three  meetings  considered projects in New South Wales; Queensland; and all remaining states  and territories. A final  meeting  was to be set  aside for a  final review on a  national basis to allocate any remaining funding. 

4.25 All proposals within each jurisdiction were listed in descending order  of aggregate score, across both streams. The recommendation provided to the  ARC  at  each  meeting  was  that  it  agree  to  recommend  to  the  delegate  the  projects in the relevant state that had achieved the cut‐off score identified for  each stream, subject to the outcomes of consideration of projects in other states;  comments  from  state  managers  and  LECs;  financial  viability  reports;  and  consideration  o

f  additional  projects  that  may  be  recommended  in  order  to  meet the full national budget allocation. 

4.26 At each meeting, the ARC made decisions to recommend some of the  projects above the respective national cut‐off scores, but to reject others. The  ARC also gave consideration to projects that had not achieved the cut‐off score,  with some being recommended. The recorded decision primarily referred to  whether each project was considered to represent good value for money in its  own  right. The  ARC  decisions  did  not  refer  to  each  project’s  relative  merit  compared to other projects. 

4.27 Over the course of the initial series of state‐based meetings, the ARC  considered the merits of all 45 LJ projects that were, at that time, at or above  the cut‐off score. The ARC agreed to recommend 24 of those projects; a further  eight were identified as possible subject to further review; and one project had  also been submitted under the GCW stream under which the ARC had agreed  to fund it. The ARC decided that the remaining 12 projects above the merit  ranking cut‐off should not be recommended, primarily on the basis of having  concluded they did not represent  value for money due to the number of jobs 

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expected or the purpose of funding; and, in some cases, other aspects such as  readiness to proceed or sustainability concerns.  

4.28 In  its  first  four  meetings,  the  ARC  also  considered  the  merits  of  a  further 24 LJ projects that had not achieved the cut‐off score. This included: 

 all three projects with a score of 18 that had not met all criteria. None  were recommended; and 

 all 15 projects with a score of 17.114 Of the 14 projects in that group with  pass scores, the ARC agreed to recommend six and one was agreed as  possible subject to comments from the LEC. The remaining six were not  recommended, as was the project that failed to meet all of the criteria. 

4.29 The  remaining  six  LJ  projects  whose  merits  were  considered  by  the  ARC as part of the state‐based meetings had scores of less than 17, of which  one (with a score of 16) was recommended pending further clarification.  

4.30 In considering GCW projects in the same series of meetings, the ARC  agreed  to  recommend  a  project  to  build  on  an  existing  small  scale  social  enterprise collecting and re‐using clean industrial waste to create a susta inable  business  providing  employment  for  disadvantaged  job  seekers.  The  project  had achieved the cut‐off score of 20 based on the national ranking of projects  assessed against the GCW criteria. In agreeing to recommend the project, the  ARC  also  decided  that  it  was  in  line  with,  and  could  be  funded  from,  the  LJ stream. The project was subsequently approved as an LJ project. However,  an assessment against the first LJ criterion was not undertaken.115 

                                                       114 This approach had started at the 28 January 2010 meeting at which the ARC was provided with details of the eight LJ projects in Victoria that met or exceeded the cut-off score of 18. The ARC also considered and agreed to

recommend two projects with a score of 17 on the basis they represented good value for money. There was no reference made to the relative merit of other projects, including those that had achieved higher scores in other states and had yet to be considered. There was no further consideration by the ARC of the merits of either project until its final meeting on 18 March 2010 at which comments from the delegate questioning the value for money basis of both projects were considered. This resulted in one project being removed from final recommendations provided to the delegate on 18 March 2010. 115

As noted at paragraph 4.3, the first criterion differed between two streams. For the LJ stream, the first criterion was ‘have a positive impact on the environment’, whereas for the GCW stream, it was ‘create, maintain or support Intermediate Labour Market models, including social enterprises’. The project was originally registered as GCW0287 and re-registered as LJ0386. A departmental file note recorded that: ‘GCW0287 has been assessed and was recommended for funding by the ARC under the condition that the funding stream be changed to Local Jobs. As a result LJ0386 was created. LJ0386 does not contain an assessment as its scores are based on the assessment for GCW0287.’

   

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Consideration of lower-ranked projects

4.31 After  considering  projects  from  each  state  and  territory,  the  fifth  meeting of the ARC on 11 February 2010 was advised that, taking account of  the projects under each stream it had agreed to recommend or identified as  possible pending further review, a further $20 million could still be allocated  from the $93.3 million available across the two streams. In order to allocate that  funding,  the  ARC  was  advised  that  it  could  consider  projects  with  an  assessment score of 16 or more for LJ (compared to the original cut‐off score of  18), and 18 or more for GCW (compared to the original cut‐off score of 20).  As noted  at  paragraph  4.28,  at  that  time,  the  ARC  had  already  given  consideration to 24 LJ stream projects that had not achieved the cut‐off score. 

4.32 The minutes of the ARC’s next meeting on 12 February 2010 recorded  that members were requested to review all LJ projects that had achieved a pass  score, those that had been identified to date as ‘possible’ and those projects not  previously  considered  that  had  achieved  the  reduced  cut‐off  score  of  16.  A similar review process was undertaken for GCW stream p rojects applying  the reduced cut‐off score of 18. 

4.33 The ARC consideration of 12 LJ projects with pass scores of 16 that had  not  previously  been  considered  resulted  in  three  of  those  projects  being  recommended for funding totalling $1.4 million and one (involving funding of  $2 million) being identified as agreed ‘if there is sufficient funding left when all  projects have been reviewed’.116 The review of LJ projects previously identified  as  possible  resulted  in  four  projects  now  being  recommended  for  amounts  totalling  $4.35 million;  one  previously  rejected  proposal  was  changed  to  possible ($1.39 million); and one project remained as a possibility subject to a  reduction in the funding requested.  

4.34 Following this review process, there was documented consideration by  the ARC of all but one of the LJ projects that achieved a final assessment score 

                                                       116 This project is discussed further at paragraphs 4.70 to 4.71.

   

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Consideration of lower-ranked projects

4.31 After  considering  projects  from  each  state  and  territory,  the  fifth  meeting of the ARC on 11 February 2010 was advised that, taking account of  the projects under each stream it had agreed to recommend or identified as  possible pending further review, a further $20 million could still be allocated  from the $93.3 million available across the two streams. In order to allocate that  funding,  the  ARC  was  advised  that  it  could  consider  projects  with  an  assessment score of 16 or more for LJ (compared to the original cut‐off score of  18), and 18 or more for GCW (compared to the original cut‐off score of 20).  As noted  at  paragraph  4.28,  at  that  time,  the  ARC  had  already  given  consideration to 24 LJ stream projects that had not achieved the cut‐off score. 

4.32 The minutes of the ARC’s next meeting on 12 February 2010 recorded  that members were requested to review all LJ projects that had achieved a pass  score, those that had been identified to date as ‘possible’ and those projects not  previously  considered  that  had  achieved  the  reduced  cut‐off  score  of  16.  A similar review process was undertaken for GCW stream p rojects applying  the reduced cut‐off score of 18. 

4.33 The ARC consideration of 12 LJ projects with pass scores of 16 that had  not  previously  been  considered  resulted  in  three  of  those  projects  being  recommended for funding totalling $1.4 million and one (involving funding of  $2 million) being identified as agreed ‘if there is sufficient funding left when all  projects have been reviewed’.116 The review of LJ projects previously identified  as  possible  resulted  in  four  projects  now  being  recommended  for  amounts  totalling  $4.35 million;  one  previously  rejected  proposal  was  changed  to  possible ($1.39 million); and one project remained as a possibility subject to a  reduction in the funding requested.  

4.34 Following this review process, there was documented consideration by  the ARC of all but one of the LJ projects that achieved a final assessment score 

                                                       116 This project is discussed further at paragraphs 4.70 to 4.71.

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of 16 or higher and met all five criteria.117 No record was made in the ARC  minutes or spreadsheet of any consideration that may have been undertaken of  the  merits  of  the  18  LJ  projects  with  the  minimum  pass  score  of  15  (see  paragraph 4.32). 

4.35 Following a review of recommended projects undertaken by the ARC  at its 16 February 2010 meeting to confirm they each represented value for  money  for  the  jobs  created,  the  ARC  had  identified  76  projects  as  recommended (33 under LJ, and 43 under GCW). A further two GCW projects  were still under consideration, with one of the two likely to be recommended.  Subsequent  to  that  meeting,  two  recommended  GCW  applications  were  withdrawn, reducing recommended projects to 74 for $58 million, comprising: 

 33  LJ  projects  for  $27.15 million  (52 per  cent  of  the  $51.9 million  announced as available). These projects had aggregate selection criteria  scores ranging from 16 to 23; and 

 41  GCW  projects  for  $30.87 million  (75  per  cent  of  the  $41.4 million  announced as available), with scores ranging from 16 to 25. 

4.36 In  considering  which  of  those  projects  would  ultimately  receive  funding, there was no further reference made to th e published selection criteria  or the scores achieved by each project in the ARC deliberations, the material  provided  to  the  delegate  or  in  the  delegate’s  comments  in  relation  to  recommended projects. 

Finalisation of ARC recommendations

4.37 At the next ARC meeting on 2 March 2010, the delegate, in conjunction  with the ARC, agreed to reject eight previously recommended projects (five  LJ and three GCW) for which it was decided the risk identified by a financial  viability  assessment  could  not  be  adequately  mitigated.  A  further  possible  GCW  project  that  had  also  received  a  high  risk  rating  had  already  been  rejected earlier in the meeting (with another project in the same PEA being 

                                                       117 The remaining project’s original fail score of 16 had been increased to a pass score of 17 after a review undertaken due to supportive comments being provided by the relevant LEC. A request for the score review was not included in the

ARC minutes and no ARC consideration of the project was recorded, despite its revised score being the same as 14 other LJ projects whose merits had been considered, four of which were approved. In this respect, at its 16 February 2010 meeting the ARC was advised that a number of reviews had been undertaken of projects which were either not recommended by ARC or had been assessed as ‘fail’ but which had explicit support from a LEC or state manager, and that: ’While some assessment scores may have changed as a result of these reviews, no projects have come back into contention for recommendation by ARC for funding.’ The 16 February 2010 file note recording the review of this project concluded that: ‘After review of criterion 3, the overall project is deemed suitable as it satisfactorily addresses all criterions [sic], and as a result should be considered for funding.’

   

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recommended  instead).118  A  further  four  previously  recommended  projects  (three LJ and one GCW) were identified as still possible subject to proposed  actions  to  mitigate  the  assessed  level  of  risk.  The  ARC  also  considered  additional  information  or  matters  in  relation  to  a  small  number  of  other  projects, which resulted in two previously recommended projects (one LJ and  one GCW) now being rejected. 

4.38 The delegate was provided with a presentation on the proposals that  had been recommended at the start of the meeting. In addition to providing  data on the number of proposals received  by state and target group and a  description of the assessment and ARC processes, the presentation included: 

 an overview of the 74 recommended proposals, including a breakdown  of the proposals by state, PEA, stream, target group and organisation  type and the expected employment outcomes; 

 a statistical summary of the characteristics of projects submitted and  recommended, based on PEA, type of organisation and target group  assisted; and  

 a schedule identifying, for each recommended project: the applicant;  a brief project description; expected number of jobs, traineeships and  work experience places; the relevant PEA; the funding sought and the  amount  recommended.  Projects  across  both  streams   were  grouped  within each state by PEA. 

Delegate’s comments

4.39 Following the 2 March 2010 meeting, the delegate was provided with a  revised schedule of 61 projects recommended for $46.5 million (24 under LJ for  $18.03 million  and  37  under  GCW  for  $28.47 million),  and  four  projects  identified  as  possibly  recommended  subject  to  risks  being  mitigated  (three  LJ and one GCW). The schedule did not rank the projects, either overall or  within the relevant stream. Instead, projects under both streams were grouped  by  state  and  in  descending  order  of  the  amount  of  funding  sought.  The schedule  did  not  include  the  projects’  assessment  scores  or  otherwise  identify  the  basis  on  which  the  ARC  had  decided  that  these  projects  represented the most meritorious within each stream or overall. Nor is there 

                                                       118 Both were in the Southern Wide Bay-Burnett PEA—see paragraphs 4.59 to 4.61.

   

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recommended  instead).118  A  further  four  previously  recommended  projects  (three LJ and one GCW) were identified as still possible subject to proposed  actions  to  mitigate  the  assessed  level  of  risk.  The  ARC  also  considered  additional  information  or  matters  in  relation  to  a  small  number  of  other  projects, which resulted in two previously recommended projects (one LJ and  one GCW) now being rejected. 

4.38 The delegate was provided with a presentation on the proposals that  had been recommended at the start of the meeting. In addition to providing  data on the number of proposals received  by state and target group and a  description of the assessment and ARC processes, the presentation included: 

 an overview of the 74 recommended proposals, including a breakdown  of the proposals by state, PEA, stream, target group and organisation  type and the expected employment outcomes; 

 a statistical summary of the characteristics of projects submitted and  recommended, based on PEA, type of organisation and target group  assisted; and  

 a schedule identifying, for each recommended project: the applicant;  a brief project description; expected number of jobs, traineeships and  work experience places; the relevant PEA; the funding sought and the  amount  recommended.  Projects  across  both  streams   were  grouped  within each state by PEA. 

Delegate’s comments

4.39 Following the 2 March 2010 meeting, the delegate was provided with a  revised schedule of 61 projects recommended for $46.5 million (24 under LJ for  $18.03 million  and  37  under  GCW  for  $28.47 million),  and  four  projects  identified  as  possibly  recommended  subject  to  risks  being  mitigated  (three  LJ and one GCW). The schedule did not rank the projects, either overall or  within the relevant stream. Instead, projects under both streams were grouped  by  state  and  in  descending  order  of  the  amount  of  funding  sought.  The schedule  did  not  include  the  projects’  assessment  scores  or  otherwise  identify  the  basis  on  which  the  ARC  had  decided  that  these  projects  represented the most meritorious within each stream or overall. Nor is there 

                                                       118 Both were in the Southern Wide Bay-Burnett PEA—see paragraphs 4.59 to 4.61.

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evidence  of  the  delegate  being  provided  with  copies  of  the  completed  assessments (or relevant applications) for any projects, until a supplementary  assessment  process  undertaken  after  the  substantive  approval  process  had  been completed.119 

4.40 On 3 March 2010, the delegate requested that advice on the unit cost of  the  employment  outcomes  for  each  project  also  be  incorporated  into  the  schedule. The delegate’s comments and/or queries in relation to each project  were  provided  on  10  March  2010.  The  delegate  had  marked  19 of  the  61 recommended projects as representing the projects the delegate believed to  be  stronger  contenders  on  the  basis  of  the  information  he  had  available.  The delegate did not seek to provide his comments on a stream basis, with the  19 annotated  projects  comprising  15  GCW  and  four  LJ  (including  the  transferred GCW project). The delegate’s comments comprised observations  on projects’ strengths or weaknesses in the context of program objectives, but  were not framed to specifically address the selection criteria for each stream. 

4.41 On  16  March  2010,  it  was  agreed  that  the  second  round  would  be  finalised on 18 March 2010, with a final ARC meeting being scheduled for that  date. As the delegate was overseas at t hat time, a spreadsheet setting out the  departmental responses to the delegate’s comments and queries was finalised  and forwarded via email on 17 March 2010. The spreadsheet provided advice  in  relation  to  the  four  possible  projects,  and  indicated  that  one  was  now  recommended and the remaining three could be funded based on advice from  the relevant state office that contract management would address identified  risks. In providing the spreadsheet, together with an approval instrument to  the delegate for signature, the department advised that: 

It is recommended that you consider the projects submitted for your approval  and advise your agreement or otherwise. An instrument is attached for you to  sign  as  the  Delegate  covering  your  agreement  to  the  recommendations  as  appropriate. 

Final ARC deliberations

4.42 Although it had been recommended to the delegate on 17 March 2010  that  he  approve  all  65  projects,  the  ARC  meeting  of  18  March  2010  re‐considered  a  number  of  the  projects,  after  further  consideration  of  the 

                                                       119 See further at paragraphs 4.79 to 4.88.

   

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delegate’s 10 March 2010 comments120 and additional comments received on  18 March  2010.  In  this  latter  respect,  the  delegate  advised  that,  in  order  to  undertake the role of approver, he required the ARC members to provide a  signed  note  of  assurance  regarding  the  recommended  projects.  This  was  to  include assurance in relation to any remaining financial viability questions and  that the recommended projects: 

... must be absolutely ready‐steady‐go. (Minister very worried that there are  still some who haven’t started under [the first round of the Jobs Fund] (or that  there were quite a number at end of last year)).  

...  all  must  be  of  good  quality  or  (better  put)  none  must  be  vulnerable  to  appearance  of  any  degree  of  poor  quality  (...  you  will  recall  some  of  the  sensitivities). 

The only other thing needs to be said is that it doesn’t matter if there are only  smallish number. Much more important [they are] all good.  

4.43 Following the decisions made at its final meeting, the ARC agreed that  it  would  recommend  50  projects  for  total  funding  of  $36.4 million  (19 LJ p rojects  for  $15.5 million  out  of  a  possible  $40.5 million  and  31 GCW projects  for  $20.9 million  out  of  a  possible  $41 million).121  This  included all 19 of the projects the delegate had considered to be the stronger  contenders.  The  minutes  of  the  ARC’s  final  meeting  on  18 March  2010  recorded that the committee had noted that: 

The projects recommended are all good projects selected on their merit and  could not be regarded as stimulus projects. 

Project approval

4.44 As requested by the delegate, at the 18 March 2010 meeting each of the  ARC  members  signed a  minute  stating  that the  50  projects  now  listed  in  a  revised schedule were recommended for funding: 

... on the basis they have all had careful consideration of: 

 The advertised selection criteria 

                                                       120 In this respect, the department had also tried to fax the approval instrument to the delegate for his signature on 17 March 2010, but the fax had not gone through. The failure report was annotated that ‘…there is more to be done

before we try again. Need ARC sign off on some [questions].’ 121 After the decision to redirect funding to the Insulation Worker Adjustment package (see paragraph 1.21).

   

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delegate’s 10 March 2010 comments120 and additional comments received on  18 March  2010.  In  this  latter  respect,  the  delegate  advised  that,  in  order  to  undertake the role of approver, he required the ARC members to provide a  signed  note  of  assurance  regarding  the  recommended  projects.  This  was  to  include assurance in relation to any remaining financial viability questions and  that the recommended projects: 

... must be absolutely ready‐steady‐go. (Minister very worried that there are  still some who haven’t started under [the first round of the Jobs Fund] (or that  there were quite a number at end of last year)).  

...  all  must  be  of  good  quality  or  (better  put)  none  must  be  vulnerable  to  appearance  of  any  degree  of  poor  quality  (...  you  will  recall  some  of  the  sensitivities). 

The only other thing needs to be said is that it doesn’t matter if there are only  smallish number. Much more important [they are] all good.  

4.43 Following the decisions made at its final meeting, the ARC agreed that  it  would  recommend  50  projects  for  total  funding  of  $36.4 million  (19 LJ p rojects  for  $15.5 million  out  of  a  possible  $40.5 million  and  31 GCW projects  for  $20.9 million  out  of  a  possible  $41 million).121  This  included all 19 of the projects the delegate had considered to be the stronger  contenders.  The  minutes  of  the  ARC’s  final  meeting  on  18 March  2010  recorded that the committee had noted that: 

The projects recommended are all good projects selected on their merit and  could not be regarded as stimulus projects. 

Project approval

4.44 As requested by the delegate, at the 18 March 2010 meeting each of the  ARC  members  signed a  minute  stating  that the  50  projects  now  listed  in  a  revised schedule were recommended for funding: 

... on the basis they have all had careful consideration of: 

 The advertised selection criteria 

                                                       120 In this respect, the department had also tried to fax the approval instrument to the delegate for his signature on 17 March 2010, but the fax had not gone through. The failure report was annotated that ‘…there is more to be done

before we try again. Need ARC sign off on some [questions].’ 121 After the decision to redirect funding to the Insulation Worker Adjustment package (see paragraph 1.21).

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 Financial viability risks 

 The  capacity  of  projects  to  commence  in  accordance  with  program  guidelines 

 Quality and value for money.122 

4.45 The ARC chair further advised the delegate on 18 March 2010 that the  committee was satisfied that each of the delegate’s earlier questions had been  addressed and that: 

In summary, we considered the 65 possible projects. 15 were eliminated on the  basis  of  either  poor  value  for  money  or  high  risk  or  poor  alignment  with  programme objectives. 

4.46 The delegate approved the 50 recommended projects on 18 March 2010.  After  a  further  three  projects  (two  LJ  and  one  GCW)  were  approved  on  23 March  2010  for  $2.6 million  (see  paragraphs  4.79  to  4.88),  total  funding  approved in the second round was $39 million. This represented a significant  under‐allocation  compared  to  the  $81 million  available,  with  the  approved  projects  representing  just  five  per  cent  of  applications.  In  that  context,  it  is  reasonable  to  expect  there  to  be  a  high  degree  of  correlation  between  the  projects that had achieved the highest scores against the selection criteria and  those recommended for approval. However, this was  not the case. Specifically: 

 13 (68 per cent) of the 19 recommended LJ projects had scores equal to  or  higher  than  the  original  cut‐off  score  of  18,  and  represented  28 per cent of the 47 LJ projects with final pass scores of 18 or higher.123  The  other  six  recommended  projects  (nearly  a  third)  had  scores  of  16 (three projects) or 17 (three projects). The two additional LJ projects  approved by the delegate had scores of 21 and 17 respectively; and 

 13 (42 per cent) of the 31 recommended GCW projects had scores equal  to  or  higher  than  the  original  cut‐off  score  of  20,  and  represented  41 per cent  of  the  32 GCW  projects  with  final  pass  scores  of  20  or  higher. The other 18 recommended projects (more than half) had scores  of  16  (one  project),  17  (four  projects),  18 (eight  projects)  or  19 (five 

                                                       122 The minute further advised that: ‘The Committee has identified a number of projects which will be subject to meeting specific requirements prior to the Commonwealth executing Funding Agreements. Project descriptions will clearly reflect

the employment, social enterprise and green jobs benefits.’ 123 This includes the project assessed against the GCW criteria, but recommended for under LJ (see footnote 115). A further project achieved the cut-off score after a review during the ARC’s deliberations.

   

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projects). The additional GCW project approved by the delegate had a  score of 20. 

4.47 Table 4.2 sets out the final selection criteria scores allocated to projects  at the conclusion of the ARC’s deliberations (incorporating the outcomes of all  score reviews), and associated rates at which projects were recommended by  the ARC, and approved by the delegate. Table 4.2 also highlights the original  funding cut‐off score for each stream, based on national rankings and fully  allocating the available funding.  

   

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projects). The additional GCW project approved by the delegate had a  score of 20. 

4.47 Table 4.2 sets out the final selection criteria scores allocated to projects  at the conclusion of the ARC’s deliberations (incorporating the outcomes of all  score reviews), and associated rates at which projects were recommended by  the ARC, and approved by the delegate. Table 4.2 also highlights the original  funding cut‐off score for each stream, based on national rankings and fully  allocating the available funding.  

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Table 4.2

Projects with a ‘pass’ assessment outcome and associated rates of recommendation for approval

Aggregate pass score against criteria

Local Jobs stream

Get Communities Working stream

Projects with eligible scores

Recommended

Approved

Projects with eligible scores

Recommended

Approved

#

$ (m)

# (%)

$ (m)

# (%)

$ (m)

#

$ (m)

# (%)

$ (m)

# (%)

$ (m)

25 0 0.0 0 0.0. 0 0.0. 1 1.21 1 (100%) 1.21 1 (100%) 1.21 24 0 0.0 0 0.0 0 0.0. 3 1.53 2 (67%) 0.46 2 (67%) 0.46 23 3 1.85 1 (33%) 0.20 1 (33%) 0.20 3 2.52 0 (0%) 0.00 0 (0%) 0.00 22 2 2.69 1 (50%) 0.80 1 (50%) 0.80 5 4.98 2 (40%) 1.54 2 (40%) 1.54 21 5 6.32 2 (40%) 2.64 3 (60%) 4.11 2 3.02 0 (0%) 0.00 0 (0%) 0.00 20 13 16.70 3 (23%) 2.11 3 (23%) 2.11 18 17.13 8 (44%) 5.08 9 (50%) 5.68 19 9 8.97 2 (22%) 1.34 2 (22%) 1.34

22

24.14

5 (23%)

4.34

5 (23%)

4.34

18 15 16.65 4 (27 %) 4.25 4 (27 %) 4.25

33

30.92

8 (24%)

6.16

8 (24%)

6.16

17

15

12.85

3 (20%)

1.73

4 (27%)

2.29

36

36.72

4 (11%)

1.91

4 (11%)

1.91

16

14

10.79

3 (21%)

2.44

3 (21%)

2.44

27

26.79

1 (4%)

0.23

1 (4%)

0.23

15 18 12.42 0 (0%) 0.00 0 (0%) 0.00 31 30.08 0 (0%) 0.00 0 (0%) 0.00

Total

94

89.24

19 (20%)

15.51

21 (22%)

17.54

181

179.04

31 (17%)

20.93

32 (18%)

21.54

Source: ANAO analysis of DEEWR assessment and selection process records for the second funding round of the Jobs Fund.

   

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4.48 Despite the significantly different outcome that had resulted from the  ARC’s  deliberations,  when  compared  with  the  relative  merit  of  projects  as  indicated by the scores allocated against the published selection criteria, the  ARC did not seek to recalibrate the national ranking in order to provide an  objective  measure  of  the  final  assessed  relative  merits  of  each  competing  project within each stream. As with the first round, this reflected an approach  under which the assessment criteria set out in the program guidelines as the  basis for measuring the relative merit of competing projects (as reflected in the  scoring methodology adopted) were subsequently applied in the ARC process  as  more  in  the  nature  of  eligibility  criteria  setting  a  minimum  threshold.  While it is appropriate for the ARC to adopt an holistic view, in the interests of  transparency and equitable outcomes, greater attention to being clear on the  differentiating factors between applications would have been expected. 

Consideration of geographical distribution 4.49 In noting at its 28 January 2010 meeting the then Minister’s agreement  that it was not necessary for all funding to be allocated if the proposals failed  to  demonstrate  positive  job  outcomes   and  value  for  money  (see paragraph 4.22),  the  ARC  had  also  noted  advice  that  the  Minister  ‘  ...  wants the best projects to be recommended regardless of which State they are  in.’  

4.50 The Minister’s direction in this regard was consistent with the program  guidelines which did not provide for geographical distribution to be a factor  taken into account in selecting projects for funding, including in regard to the  PEAs.  Rather,  the  guidelines  included,  as  one  of  five  selection  criteria,  a  requirement that projects were to assist disadvantaged groups or regions. In  responding to that criterion, applicants were asked to identify the PEA their  project was located in or, if not in a PEA, to outline why the area it was located  in  and/or  the  project’s  target  group  was  disadvantaged  and  in  need  of  assistance. Projects were scored on the basis of the response provided. 

4.51 In that context, the project selection and approval guidelines endorsed  by the ARC at its 28 January 2010 meeting stated that: 

ARC considers details of proposals in each stream ranked according to their  scores against the assessment criteria, generally on a State by State basis (but  also having regard to the loca tion of projects in priority employment areas). 

   

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4.48 Despite the significantly different outcome that had resulted from the  ARC’s  deliberations,  when  compared  with  the  relative  merit  of  projects  as  indicated by the scores allocated against the published selection criteria, the  ARC did not seek to recalibrate the national ranking in order to provide an  objective  measure  of  the  final  assessed  relative  merits  of  each  competing  project within each stream. As with the first round, this reflected an approach  under which the assessment criteria set out in the program guidelines as the  basis for measuring the relative merit of competing projects (as reflected in the  scoring methodology adopted) were subsequently applied in the ARC process  as  more  in  the  nature  of  eligibility  criteria  setting  a  minimum  threshold.  While it is appropriate for the ARC to adopt an holistic view, in the interests of  transparency and equitable outcomes, greater attention to being clear on the  differentiating factors between applications would have been expected. 

Consideration of geographical distribution 4.49 In noting at its 28 January 2010 meeting the then Minister’s agreement  that it was not necessary for all funding to be allocated if the proposals failed  to  demonstrate  positive  job  outcomes   and  value  for  money  (see paragraph 4.22),  the  ARC  had  also  noted  advice  that  the  Minister  ‘  ...  wants the best projects to be recommended regardless of which State they are  in.’  

4.50 The Minister’s direction in this regard was consistent with the program  guidelines which did not provide for geographical distribution to be a factor  taken into account in selecting projects for funding, including in regard to the  PEAs.  Rather,  the  guidelines  included,  as  one  of  five  selection  criteria,  a  requirement that projects were to assist disadvantaged groups or regions. In  responding to that criterion, applicants were asked to identify the PEA their  project was located in or, if not in a PEA, to outline why the area it was located  in  and/or  the  project’s  target  group  was  disadvantaged  and  in  need  of  assistance. Projects were scored on the basis of the response provided. 

4.51 In that context, the project selection and approval guidelines endorsed  by the ARC at its 28 January 2010 meeting stated that: 

ARC considers details of proposals in each stream ranked according to their  scores against the assessment criteria, generally on a State by State basis (but  also having regard to the loca tion of projects in priority employment areas). 

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Consideration of state and territory distribution

4.52 As  noted  at  paragraph  4.29,  six  of  the  69  LJ  projects  given  explicit  consideration  by  the  ARC  during  the  state‐based  meetings  had  failed  to  achieve either the cut‐off score of 18 or the alternative score of 17. Three of  those projects had scores of 16, two with a pass outcome and one that had  failed two criteria. These projects were respectively located in the Australian  Capital Territory (ACT) (fail), Tasmania (pass) and Western Australia (pass)124,  with each of those jurisdictions considered at the ARC’s second meeting on  2 February 2010. The available evidence is that these projects first came to be  specifically  considered,  despite  their  low  scores,  having  regard  for  the  potential geographic distribution of recommended projects. 

4.53 At that meeting, the ARC noted advice that only one application from  each of the Northern Territory and the ACT had pass assessments, but neither  met the relevant cut‐off score. None of the LJ projects in the ACT had a pass  score, such that the project with a fail score of 16 that was considered at the  2 February  2010  meeti ng  was  the  highest  scoring  LJ  project  in  the  ACT.  One GCW project in the ACT had a pass score of 18 (below the cut‐off score of  20).  The  ARC  agreed  to  recommend  that  project,  resulting  in  one  recommended project in the ACT. Despite the subsequent significant reduction  in the number of recommended projects, this project was included in the final  50 projects approved on 18 March 2010.125 

4.54 Of  the  25  LJ applications  from  Tasmania,  five  had  a  pass  score.  Of those, only one had achieved the cut‐off score of 18 and two had scores  of 17.  The  remainder  had  low  pass  scores  of  16  and  15,  respectively.  In considering projects from that state, the ARC agreed to recommend one of 

                                                       124 This was the only LJ project in the South West Perth PEA with a pass score. Despite being below the cut-off score based on national rankings, it was considered but rejected by the ARC at its 2 February 2010 meeting. At the same

meeting, the ARC had agreed to recommend the highest ranking GCW project in that PEA (with a score of 24), which was ultimately the only project approved in that PEA in the second round. See further at paragraph 4.66 and footnote 134. 125

The decision was recorded as follows: ‘Although the organisation has received an assessment score of 18 (which represents a “pass” score against each assessment criterion), it has not scored highly in terms of the national order of ranking. The proponent has links with [Job Services Australia providers] and proposes a total of 70 jobs. It will establish a retail outlet, replicated from its Goulburn and Queanbeyan outlets.’ At the time this project was agreed, the ARC had yet to consider projects from New South Wales and Queensland, which represented 58 per cent of GCW applications and 64 per cent of the GCW projects with scores above the cut-off. No other commentary in terms of the project’s merits was recorded until the delegate’s comments of 10 March 2010, which were: ‘Supplements a well-established social enterprise. Ready-to-go 'green' project. Very reasonable unit cost if you consider the focus on disadvantaged job seekers.’ The delegate also annotated the project as one of the 19 best (see paragraph 4.40). As noted at paragraph 4.39, the schedule of 65 projects provided to the delegate did not identify assessment scores or the basis on which the ARC had decided these projects represented the most meritorious such that they had been included in the projects on which the delegate had the opportunity to comment, compared to other projects that were not.

   

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the LJ projects with a score of 17 subject to further review, together with the  highest ranked GCW project (with a score of 19, below the cut‐off score of 20).  Both were included in the final 50 projects recommended by the ARC. The  remaining  three  GCW  projects  in  Tasmania  with  pass  scores  (17  and  16 respectively)  were  also  considered  at  the  2  February  2010  meeting,  but  rejected. The ARC also agreed to recommend the LJ project with a low pass  score of 16, subject to further clarification. On 2 March 2010, the ARC decided  not  to  recommend  the  project  after  confirmation  the  land  involved  was  privately owned and the project was not in a PEA, as originally thought.  

4.55 At the conclusion of its 2 February 2010 meeting, the ARC had recorded  decisions  in  relation  to  28  LJ  projects  in  states  other  than  Queensland  and  New South  Wales,  comprising  24 projects  with  a  pass  score  (26  per  cent  of  LJ projects with a pass score) and four projects with a fail score. In that context,  the rationale for considering the three projects with a score of 16 (compared to  the  national  merit  ranking  cut‐off  score  of  18)  at  t hat  stage  of  the  ARC’s  deliberations  was  not  recorded.  In  total,  27 LJ  projects  had  a  score  of  16,  14 with a pass outcome. None of the remaining projects in that score group  were  considered  by  the  ARC  until  a  review  of  lower  ranked  projects  was  undertaken on 12 February 2010 (see paragraphs 4.32 to 4.33). 

4.56 The  remaining  three  LJ  projects  considered  by  the  ARC  despite  not  achieving scores of either 18 or 17 had each failed the assessment.126 The only  two  LJ  proposals  in  the  Northern  Territory  both  had  a  fail  score  of  14.  However,  their  respective  merits  were  nevertheless  given  explicit  consideration  at  the  2 February  2010  meeting,  with  each  being  rejected.  No ARC  consideration  of  the  remaining  21  LJ  projects  with  an  assessment  score of 14 was recorded. The only GCW project in the Northern Territory that  passed the assessment (with a score of 15 compared to the cut‐off score of 20)  was also considered, but rejected. The ARC also asked for a score review for  another GCW project that had scored 16, but failed one criterion. This resulted  in the project’s score against that criterion being increased to the minimum  pass  level,   resulting  in  an  aggregate  pass  score  of  17.  The  ARC  agreed  to 

                                                       126 One related to a project with a score of 12 that failed three criteria. That proposal was considered by the ARC due to it having received supportive comments from the relevant LEC, but was rejected.

   

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the LJ projects with a score of 17 subject to further review, together with the  highest ranked GCW project (with a score of 19, below the cut‐off score of 20).  Both were included in the final 50 projects recommended by the ARC. The  remaining  three  GCW  projects  in  Tasmania  with  pass  scores  (17  and  16 respectively)  were  also  considered  at  the  2  February  2010  meeting,  but  rejected. The ARC also agreed to recommend the LJ project with a low pass  score of 16, subject to further clarification. On 2 March 2010, the ARC decided  not  to  recommend  the  project  after  confirmation  the  land  involved  was  privately owned and the project was not in a PEA, as originally thought.  

4.55 At the conclusion of its 2 February 2010 meeting, the ARC had recorded  decisions  in  relation  to  28  LJ  projects  in  states  other  than  Queensland  and  New South  Wales,  comprising  24 projects  with  a  pass  score  (26  per  cent  of  LJ projects with a pass score) and four projects with a fail score. In that context,  the rationale for considering the three projects with a score of 16 (compared to  the  national  merit  ranking  cut‐off  score  of  18)  at  t hat  stage  of  the  ARC’s  deliberations  was  not  recorded.  In  total,  27 LJ  projects  had  a  score  of  16,  14 with a pass outcome. None of the remaining projects in that score group  were  considered  by  the  ARC  until  a  review  of  lower  ranked  projects  was  undertaken on 12 February 2010 (see paragraphs 4.32 to 4.33). 

4.56 The  remaining  three  LJ  projects  considered  by  the  ARC  despite  not  achieving scores of either 18 or 17 had each failed the assessment.126 The only  two  LJ  proposals  in  the  Northern  Territory  both  had  a  fail  score  of  14.  However,  their  respective  merits  were  nevertheless  given  explicit  consideration  at  the  2 February  2010  meeting,  with  each  being  rejected.  No ARC  consideration  of  the  remaining  21  LJ  projects  with  an  assessment  score of 14 was recorded. The only GCW project in the Northern Territory that  passed the assessment (with a score of 15 compared to the cut‐off score of 20)  was also considered, but rejected. The ARC also asked for a score review for  another GCW project that had scored 16, but failed one criterion. This resulted  in the project’s score against that criterion being increased to the minimum  pass  level,   resulting  in  an  aggregate  pass  score  of  17.  The  ARC  agreed  to 

                                                       126 One related to a project with a score of 12 that failed three criteria. That proposal was considered by the ARC due to it having received supportive comments from the relevant LEC, but was rejected.

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recommend the project. This resulted in one approved project in the Northern  Territory in the second round.127 

Consideration of priority employment area distribution

4.57 In the context of being advised of strategies for allocating remaining  funding on 11 February 2010 (see paragraph 4.31), the ARC was advised that: 

To date, all Sates/Territories and Priority Employment Areas (PEAs) have at  least one LJ or GCW project either recommended or considered as possible 

 Noting that in the Southern Wide Bay Burnett and Ballarat Bendigo  PEAs, there are no projects which have been recommended.128 

4.58 At that time, those two PEAs each had one project rated as possible,  both  under  GCW.  The  minutes  of  the  next  meeting  on  12 February  2010  recorded that, in considering projects that could be recommended to allocate  remaining  funding,  the  ARC  also  reviewed  the  two  PEAs  where  no  recommendations had been made to date.  

Southern Wide-Bay Burnett

4.59 The only LJ project in the Southern Wide Bay‐Burnett PEA that met all  the selection criteria had a score of 17 (below the cut‐off score of 18), but had  been  considered  by  the  ARC  at  its  5 February  2010  meeting  in  which  Queensland proposals were considered. The proposal was rejected on the basis   it did not represent value for money. Five GCW projects in this area had pass  assessment scores. The two highest ranked projects (both with scores of 19,  compared to the national cut‐off score of 20), were the only other projects from  this PEA considered at the 5 February 2010 meeting. One was rejected due to  the low number of jobs to be created. The other, seeking $2 million, was agreed  as  possible  subject  to  further  clarification  of  the  employment  outcomes.  The ARC noted that the relevant LEC’s comments were positive and that: ‘It is  an excellent project with a focus on local jobs.’  

4.60 On 12 February 2010, the ARC considered two further GCW proposals  in  Southern  Wide  Bay‐Burnett  with  lower  pass  scores  of  17  and  agreed  to  recommend one for $687 028.129 The ARC’s next meeting on 16 February 2010 

                                                       127 The delegate had also identified this project as one of the best 19, but asked for further advice regarding potential risks. The state manager agreed there were risks but that the project had merit. 128

In that context, it was suggested by an attending official that: ‘...ARC should look at Priority Areas particularly where they did not receive funding during either Round 1 or this Round.’ 129 Consideration of the GCW project in this PEA with a pass score of 16 was not recorded—see paragraphs 4.66 to 4.66.

   

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was advised of the outcome of the inquiries made regarding the higher ranked  project identified as possible on 5 February, with the committee agreeing to  recommend the project if the applicant agreed to partial funding of $1 million  for a reduced scope and that, should the applicant agree, the lower ranked  project agreed on 12 February would be rejected. If the applicant did not agree,  the lower ranked project would remain as recommended. Prior to the ARC’s  meeting at which it was to present its recommendations to the delegate, both  projects were still identified as possible, with committee papers indicating the  ARC was ‘likely to approve one’. 

4.61 At the 2 March 2010 meeting, the ARC was advised that the applicant  for the higher ranked project had indicated a reduced scope was achievable,  but at a cost of $1.75 million and with considerably reduced jobs outcomes.  The ARC agreed the project would not be recommended on the basis it did not  represent  value  for  money  at  the  reduced  scale  proposed;  and  agreed  to  reinstate  the  lower  ranked  project  from  this  PEA  as  recommended.  In  that  context,  the  ARC’s  deliberations  were  based  upon  comparing  the  relative  merits  of  the   only  two  projects  in  the  Southern  Wide  Bay‐Burnett  PEA  considered  able  to  be  funded,  instead  of  comparing  those  projects’  relative  merits with those of the full population of competing applications, as would be  expected in an effectively conducted competitive grant selection process.  

Ballarat-Bendigo

4.62 At the 11 February 2010 meeting at which it was noted no projects had  been recommended to date in the Ballarat‐Bendigo PEA, the ARC asked for the  scores of two GCW projects in that PEA be reviewed. One had not yet been  considered due to its low score of 16 (compared to the cut‐off score of 20).  The ARC asked for a review to be conducted to ensure the scores were correct.  The project had received support from the relevant state office. The other had a  fail score of 15, with one criterion not being met. The ARC minutes recorded  that this project was to be reviewed ‘to confirm whether it failed taking into  account the LEC comments.’ 

4.63 Based  on  the  national  cut‐off  scores,  the  only  project  in  Ballarat‐Bendigo considered at the ARC’s 28 January 2010 meeting (at which  proposals in Victoria were considered) was a GCW project with a score o f 22.  None  of  the  LJ  projects  in  that  PEA  had  scored  higher  than  13.  The GCW project was agreed as possible and then agreed to be recommended  for  $581 886  on  12 February  2010,  but  was  rejected  at  the  next  meeting  on 

   

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was advised of the outcome of the inquiries made regarding the higher ranked  project identified as possible on 5 February, with the committee agreeing to  recommend the project if the applicant agreed to partial funding of $1 million  for a reduced scope and that, should the applicant agree, the lower ranked  project agreed on 12 February would be rejected. If the applicant did not agree,  the lower ranked project would remain as recommended. Prior to the ARC’s  meeting at which it was to present its recommendations to the delegate, both  projects were still identified as possible, with committee papers indicating the  ARC was ‘likely to approve one’. 

4.61 At the 2 March 2010 meeting, the ARC was advised that the applicant  for the higher ranked project had indicated a reduced scope was achievable,  but at a cost of $1.75 million and with considerably reduced jobs outcomes.  The ARC agreed the project would not be recommended on the basis it did not  represent  value  for  money  at  the  reduced  scale  proposed;  and  agreed  to  reinstate  the  lower  ranked  project  from  this  PEA  as  recommended.  In  that  context,  the  ARC’s  deliberations  were  based  upon  comparing  the  relative  merits  of  the   only  two  projects  in  the  Southern  Wide  Bay‐Burnett  PEA  considered  able  to  be  funded,  instead  of  comparing  those  projects’  relative  merits with those of the full population of competing applications, as would be  expected in an effectively conducted competitive grant selection process.  

Ballarat-Bendigo

4.62 At the 11 February 2010 meeting at which it was noted no projects had  been recommended to date in the Ballarat‐Bendigo PEA, the ARC asked for the  scores of two GCW projects in that PEA be reviewed. One had not yet been  considered due to its low score of 16 (compared to the cut‐off score of 20).  The ARC asked for a review to be conducted to ensure the scores were correct.  The project had received support from the relevant state office. The other had a  fail score of 15, with one criterion not being met. The ARC minutes recorded  that this project was to be reviewed ‘to confirm whether it failed taking into  account the LEC comments.’ 

4.63 Based  on  the  national  cut‐off  scores,  the  only  project  in  Ballarat‐Bendigo considered at the ARC’s 28 January 2010 meeting (at which  proposals in Victoria were considered) was a GCW project with a score o f 22.  None  of  the  LJ  projects  in  that  PEA  had  scored  higher  than  13.  The GCW project was agreed as possible and then agreed to be recommended  for  $581 886  on  12 February  2010,  but  was  rejected  at  the  next  meeting  on 

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16 February.130  In respect  to  the  two  GCW  projects  in  Ballarat‐Bendigo  for  which the ARC had requested score reviews (see paragraph 4.62), the review  for the project with a score of 16 out of 25 concluded the score was correct.  On 16 February 2010, the ARC agreed to recommend the project for $99 375,  with the decision recorded in the ARC meeting spreadsheet noting that this  was ‘one of few potential proposals in [the] Ballarat area.’ The ARC did not  seek to reconcile the confirmed score of 16 with a decision that the project  represented one of the most meritorious applications on a national basis and  should  be  recommended.131  The  application  was  later  withdrawn  by  the  applicant before the selection process was finalised. The review for the other  project confirmed the fail score and it was rejected. 

4.64 The minutes of the ARC’s 16 February 2010 meeting recorded that: 

Following the review of the two Ballarat proposals which had not previously  been considered by ARC because of their relatively low scores, the [internal  departmental  probity  advisor]  advised  that  all  the  GCW  Bendigo/Ballarat  proposals that had “passes” will need to be considered. 

4.65 The  ARC  reviewed  a  f urther  four  of  the  six  GCW  projects  in  Ballarat‐Bendigo with pass scores of 15 or higher132, and agreed to recommend  a  total  of  $518 935  for  two  projects  (with  scores  of  16  and  17 respectively).  When  combined  with  the  project  recommended  for  $99 375  at  the  same  meeting after a score review confirmed its score of 16 (see paragraph 4.63), this  took total funding agreed for these three projects in the Ballarat‐Bendigo PEA  to  $618 310.  At  the  same  meeting,  the  ARC  reversed  the  earlier  decision  to  recommend $581 886 for one highly scored project (see paragraph 4.63). 

                                                       130 The recorded deliberations for this project highlight the difficulty in reconciling assessment scores with the recorded reason for decisions to recommend or not recommend projects; and in reconciling ARC decisions as recorded at

various stages of its deliberations. Specifically, in identifying this highly scored project as possible only on the first occasion, the ARC had noted: ‘There were a low number of jobs for the funding sought. Strategies for placing trainees into jobs were described. There appeared to be direct and indirect employment. This has been a drought affected area for over 10 years and is also a bushfire affected area.’ The basis for the ARC’s subsequent 12 February 2010 decision to recommend the project was recorded as: ‘This is a sound proposal with good value for money’. However, the 16 February 2010 decision to not recommend the project was recorded as: ‘The project is for $581K and only 5 jobs are created. ARC noted earlier concerns as to the low number of jobs and rejected this proposal as it is not good value for money with only 5 jobs being created.’ See further at paragraphs 4.68 to 4.78. 131

The formal minutes recorded the decision as follows: ‘There were no changes to the scores following a review (and the score remains at 16 with a pass against each of the assessment criteria). The 20 traineeships are actually [work experience] positions; however the project is cost effective for a redesign of their service delivery model, which will extend their targeted client group to disadvantaged as well as disabled. ARC noted that there is good support for this project.’ 132

A fifth project had been agreed following a score review (see paragraphs 4.57 and 4.63). There is no recorded consideration of the sixth project, with a pass score of 15—see paragraphs 4.66 to 4.66.

   

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4.66 In  this  respect,  ARC  deliberations  were  recorded  in  respect  to  14 (15 per cent) of the 94 GCW projects with low pass scores of between 15 and  17. This comprised: five projects in the Ballarat‐Bendigo PEA (see paragraphs  4.63  to  4.65);  two  Northern  Territory  projects  (see  paragraph  4.56);  two  in  Southern  Wide  Bay‐Burnett  PEA  (see  paragraphs  4.59  to  4.61);  three  in  Tasmania  (see  paragraph  4.54);  and  one  each  in  the  Northern  and  Western  Adelaide133  and  South  West  Perth  PEAs.134  There  were  a  further  80 GCW projects nationally that received pass scores of between 15 and 17 for  which there is no recorded consideration, other than a reference in the minutes  of the ARC’s 12 February 2010 meeting that members were asked to review all  GCW projects that had a ‘pass’. To the extent the merits of those projects were  considered  as  part  of  this  review  process,  no  record  was  made  of  those  deliberations. 

4.67 In  advising  the  delegate  of  the  50  recommended  projects  on  18 March 2010, the ARC chair further advised of the national distribution of  the recommended projects by state and territory which included at least one  project in every state a nd territory (including one each in South Australia, the  Northern Territory and the ACT). The chair further advised that: 

An issue the committee identified is that [South Australia] only has one project  with  possible  5  jobs  and  10  traineeships.  However,  we  examined  this  very  closely on the way through, and the applications were not of sufficient quality  to make it to the final selection. 

                                                       133 One GCW project in the Northern and Western Adelaide PEA exceeded the cut-off score of 20—that project was submitted and highly ranked under both streams and recommended under the GCW stream. However, it was later

decided that the risks identified by a financial viability assessment could not be adequately mitigated. The next highest scoring GCW project in this area, with a score of 19 (which had been submitted in response to the first round-see footnote 55) was rejected as not representing value for money. Of the five remaining projects in that PEA with a pass assessment, the highest ranked was a GCW project with a score of 17. The ARC considered that project on 2 February 2010 and agreed to recommend it. That decision was confirmed at the final meeting subject to conditions to improve its cost-effectiveness. It was the only project approved in this PEA in the second round of the Jobs Fund. 134

One LJ project in the South West Perth PEA received a pass assessment, with a score of 16. Despite being below the LJ cut-off score, it received explicit consideration at the 2 February 2010 ARC meeting, but was not recommended. The two GCW projects in this PEA that exceeded the cut-off score for that stream of 20 were recommended at the same meeting, one of which was subsequently rejected at the ARC’s final meeting following consideration of delegate comments that the project was: ‘one of the most expensive projects listed with very narrow goals and limited opportunities.’ The ARC rejected the project ‘as it represents low value for money and is an existing program.’ Also on 2 February 2010, the ARC had considered the two GCW projects in this PEA below the cut-off score. One, with a score of 19, was considered possible but was ultimately not recommended. The ARC agreed to recommend the other project (with a score of 17), with that decision being confirmed on 11 February 2010. However, after considering comments from the delegate that the project was a good concept, but the employment targets were low, the ARC’s 18 March 2010 meeting decided it would reject the project as not representing good value for money on the basis: ‘The proponent has subsequently advised that it will be revising the number of jobs downwards. This consequently increases the unit cost to a very high level.’

   

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4.66 In  this  respect,  ARC  deliberations  were  recorded  in  respect  to  14 (15 per cent) of the 94 GCW projects with low pass scores of between 15 and  17. This comprised: five projects in the Ballarat‐Bendigo PEA (see paragraphs  4.63  to  4.65);  two  Northern  Territory  projects  (see  paragraph  4.56);  two  in  Southern  Wide  Bay‐Burnett  PEA  (see  paragraphs  4.59  to  4.61);  three  in  Tasmania  (see  paragraph  4.54);  and  one  each  in  the  Northern  and  Western  Adelaide133  and  South  West  Perth  PEAs.134  There  were  a  further  80 GCW projects nationally that received pass scores of between 15 and 17 for  which there is no recorded consideration, other than a reference in the minutes  of the ARC’s 12 February 2010 meeting that members were asked to review all  GCW projects that had a ‘pass’. To the extent the merits of those projects were  considered  as  part  of  this  review  process,  no  record  was  made  of  those  deliberations. 

4.67 In  advising  the  delegate  of  the  50  recommended  projects  on  18 March 2010, the ARC chair further advised of the national distribution of  the recommended projects by state and territory which  included at least one  project in every state and territory (including one each in South Australia, the  Northern Territory and the ACT). The chair further advised that: 

An issue the committee identified is that [South Australia] only has one project  with  possible  5  jobs  and  10  traineeships.  However,  we  examined  this  very  closely on the way through, and the applications were not of sufficient quality  to make it to the final selection. 

                                                       133 One GCW project in the Northern and Western Adelaide PEA exceeded the cut-off score of 20—that project was submitted and highly ranked under both streams and recommended under the GCW stream. However, it was later

decided that the risks identified by a financial viability assessment could not be adequately mitigated. The next highest scoring GCW project in this area, with a score of 19 (which had been submitted in response to the first round-see footnote 55) was rejected as not representing value for money. Of the five remaining projects in that PEA with a pass

assessment, the highest ranked was a GCW project with a score of 17. The ARC considered that project on 2 February 2010 and agreed to recommend it. That decision was confirmed at the final meeting subject to conditions to improve its cost-effectiveness. It was the only project approved in this PEA in the second round of the Jobs Fund. 134

One LJ project in the South West Perth PEA received a pass assessment, with a score of 16. Despite being below the LJ cut-off score, it received explicit consideration at the 2 February 2010 ARC meeting, but was not recommended. The two GCW projects in this PEA that exceeded the cut-off score for that stream of 20 were recommended at the same meeting, one of which was subsequently rejected at the ARC’s final meeting following consideration of dele gate comments that the project was: ‘one of the most expensive projects listed with very narrow goals and limited opportunities.’ The ARC rejected the project ‘as it represents low value for money and is an existing program.’ Also on 2 February 2010, the ARC had considered the two GCW projects in this PEA below the cut-off score. One, with a score of 19, was considered possible but was ultimately not recommended. The ARC agreed to recommend the other project (with a score of 17), with that decision being confirmed on 11 February 2010. However, after considering comments from the delegate that the project was a good concept, but the employment targets were low, the ARC’s 18 March 2010 meeting decided it would reject the project as not representing good value for money on the basis: ‘The proponent has subsequently advised that it will be revising the number of jobs downwards. This consequently increases the unit cost to a very high level.’

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Value for money deliberations 4.68 As Table 4.2 illustrated, the conclusions by the ARC as to whether a  project  represented  value  for  money  were  determinative  as  to  whether  the  project was successful. Many highly scored projects were not funded despite  the significant under‐allocation of available funding, while other lower‐scored  projects were approved. Accordingly, it is essential for the transparency and  accountability of the selection process that the rationale applied in forming  those conclusions is readily discernable from the documented deliberations. 

Recording the basis for value for money decisions

4.69 The  establishment  of  a  final  merit  ranking  of  competing,  eligible  projects was not part of the ARC decision‐making process. Individual projects  were  declared  to  be  good  value  for  money  or  not,  rather  than  framing  the  deliberations  in  a  relative  sense.  In  that  context,  the  clarity  of  the  ARC  decision‐making would have benefited from the recorded basis for deciding  whether a project should be funded being framed by direct reference to the  published selection criteria and the relative merits of competing projects. In the  absence of such an approach, there is an increased risk of decisions appearing  somewha

t arbitrary or being difficult to reconcile based on available records.  For example, as noted at paragraphs 4.39 to 4.43, 15 of the 65 projects provided  to the delegate for approval on 17 March 2010 were rejected by the ARC the  next day, following further consideration of the delegate’s comments. Table 4.3  sets out the documented decisions in relation to three of the LJ projects selected  during  both  the  state‐based  reviews  and  subsequent  value  for  money  confirmation  exercise  (see  paragraph  4.35)  as  being  among  the  most  meritorious, but which were rejected at the ARC’s final meeting.  

   

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Table 4.3

Examples of ARC reversal of earlier decisions to recommend projects

Date

Recorded decision

Date

Recorded decision

28 Jan 2010 Agreed. ARC noted that: This proposal

creates 35 jobs and is good value for money.

18 Mar 2010 Rejected. ARC considered the following comments from the Delegate: The participant numbers are large for such a low-priced project. It is assumed, therefore, that the $60,000 [requested] is a minor

contribution (such as the purchase of equipment) to a large existing social enterprise. ARC noted that: The proponent is seeking $2 million over a period of three years, well beyond the end date for Jobs Fund funding, and this is the first component of the required funding. The funding being sought is actually $1.25 million which was entered incorrectly by the proponent on the application form. ARC agreed not to recommend this project on the grounds that it represents low value for money and the funds sought are beyond the Jobs Fund funding period.

5 Feb 2010

Agreed. ARC noted that: This organisation has good connections and is providing good local jobs creating green skills. Good value for money with 9 jobs created.

18 Mar 2010 Rejected. ARC considered the following comments from the Delegate: Solid environmental projects, but with low placement targets and high costs. Not sure what would be the value in the community

education sessions 'to complement formal education'? ARC agreed not to recommend this proposal as it was not good value for money and not a good fit for the objectives of Jobs Fund.

4 Feb 2010

Agreed. ARC noted that: This is a sound project with good value for money resulting in 2 jobs.

18 Mar 2010 Rejected. ARC considered the following comments from the Delegate: Looks like an important research and environmental project, but is just a project with a few jobs, which might be better

accommodated through existing assistance? Is there tertiary sector buy-in, given the research and field-work component? Is there anything about this project which makes it a particularly good match for the Jobs Fund's objectives? ARC agreed not to recommend the project as there are no clear benefits against the Job Fund’s objectives.

Source: DEEWR ARC meeting minutes for the second funding round of the Jobs Fund.

   

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Table 4.3

Examples of ARC reversal of earlier decisions to recommend projects

Date Recorded decision Date Recorded decision

28 Jan 2010 Agreed. ARC noted that: This proposal

creates 35 jobs and is good value for money.

18 Mar 2010 Rejected. ARC considered the following comments from the Delegate: The participant numbers are large for such a low-priced project. It is assumed, therefore, that the $60,000 [requested] is a minor

contribution (such as the purchase of equipment) to a large existing social enterprise. ARC noted that: The proponent is seeking $2 million over a period of three years, well beyond the end date for Jobs Fund funding, and this is the first component of the required funding. The funding being sought is actually $1.25 million which was entered incorrectly by the proponent on the application form. ARC agreed not to recommend this project on the grounds that it represents low value for money and the funds sought are beyond the Jobs Fund funding period. 5 Feb 2010

Agreed. ARC noted that: This organisation has good connections and is providing good local jobs creating green skills. Good value for money with 9 jobs created.

18 Mar 2010 Rejected. ARC considered the following comments from the Delegate: Solid environmental projects, but with low placement targets and high costs. Not sure what would be the value in the community

education sessions 'to complement formal education'? ARC agreed not to recommend this proposal as it was not good value for money and not a good fit for the objectives of Jobs Fund.

4 Feb 2010

Agreed. ARC noted that: This is a sound project with good value for money resulting in 2 jobs.

18 Mar 2010 Rejected. ARC considered the following comments from the Delegate: Looks like an important research and environmental project, but is just a project with a few jobs, which might be better

accommodated through existing assistance? Is

there tertiary sector buy-in, given the research and

field-work component? Is there anything about this project which makes it a particularly good match for the Jobs Fund's objectives? ARC agreed not to recommend the project as there are no clear benefits against the Job Fund’s objectives.

Source: DEEWR ARC meeting minutes for the second funding round of the Jobs Fund.

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4.70 A further example of the benefit that would have arisen from recording  the  ARC  decision‐making  at  each  stage  of  the  selection  process  within  a  framework that clearly related each project’s assessed overall merit to both the  published  selection  criteria  and  that  of  other  projects  relates  to  one  of  the  19 LJ projects  recommended  to  the  delegate.  In  considering  this  eligible  but  low‐scoring (16) project on 12 February 2010, the ARC had concluded that it  was  a  ‘sound  project  which  enables  people  with  a  disability  to  enter  mainstream jobs‘, but only identified it as ‘possible, agreed if there is sufficient  funding  left  when  all  projects  have  been  reviewed’  (see  paragraph  4.33).  This decision indicated that the project was seen as a lower priority compared  to other LJ projects.135 The $2 million tentatively agreed for the project at that  time  represented  six  percent  of  $35.8 million  then  recommended  for  39 LJ projects.  

4.71 There were no further recorded deliberations regarding this project or  its relative merit, but it was subsequently included in the 24 recommended  LJ projects  advised  to  the  delegate  on  2  March  2010   (see  paragraph  4.39).  At that time, the project represented 11 per cent of recommended LJ funding.  At its final meeting on 18 March 2010, the ARC agreed to include the project as  one  of  now  19 recommended  LJ  projects  (representing  five  per  cent  of  LJ stream applications). The delegate had earlier commented that the project  was expensive, but had a good focus on Ê¹greenʹ jobs and a disadvantaged client  group and seemed to be building on an existing business service; but asked if  the  costs  could  be  renegotiated.  As  noted  at  paragraphs  4.39  to  4.40,  the  delegate had not been provided with advice as to the scores or relative merit of  the 65 projects on which he was to provide comments. In recommending the  project on 18 March 2010 for $2 million (representing 13 per cent of the total of  $15.5 million in LJ funding now recommended), the ARC noted that the jobs  and client group made this a good project, and necessary planning/building  approvals  were  to  be  obtained.  No  reference  was  made  to  the  project’s  assessment  score  of  16  against  the  selection  criteria  and  no  other  basis  for  concluding this project represented one of the just five per c ent of LJ projects to  merit funding was recorded. 

                                                       135 The entry in the ARC spreadsheet for the 12 February 2010 meeting reflected this, stating: ‘Recommended, but lower priority project.’

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Transparency of the basis for selection

4.72 As discussed at paragraph 3.49, in the context of a competitive grant  program,  value  for  money  relates  to  the  extent  to  which  a  project  will  contribute  to maximising the achievement of program objectives within the  funding  available.  In  that  respect,  the  department  invested  considerable  resources  in  developing  a  methodology  for  assessing  and  scoring  each  competing  application  against  the  published  selection  criteria.  If  soundly  designed and implemented, the resulting scores can reasonably be expected to  reflect the relative merit of projects against the program objectives.  

4.73 As noted at paragraph 4.9, the assessment guidelines had instructed  assessors that an independent person should be able to read the justification  statement and understand the reasons for the score allocated, and should not  have to read the claims made in the application to understand those reasons.  The  emphasis  placed  on  ensuring  the  assessment  scores  were  robust  was  highlighted to the delegate in the ARC’s 2 March 2010 presentation.136  

4.74 However,  as  with  the  first  round,  the  committee’s  subsequent  deliberations were not undertaken within a framework that sought to reconcile  the  range  of  scores  achieved  by  each  of  the  eligible  projects  against  the  published selection criteria with the committee’s reasons for deciding whether  they

 respectively merited funding.137 Instead, the judgements brought to bear  by  the  ARC  were  expressed  in  qualitative  terms.  The  extent  to  which  the  resulting selection outcomes differed from the relative merit indicated by the  scored assessments significantly diminished the utility of applying a robust  quantitative ranking methodology.  

4.75 The ARC presentation also advised the delegate that: 

Of the highly ranked proposals not recommended by the Assessment Review  Committee,  the  main  consideration  was  low  value  for  money  compared  to  other highly ranking projects138, especially in terms of: 

                                                       136 Specifically, the presentation advised the delegate that: 113 assessors and 28 moderators assessed the project proposals against five assessment criteria and applied a rating out of five; the majority of assessments were undertaken

in state offices, and that this had ensured that an understanding and appreciation of the needs of the local community were applied to the assessment process; and quality assurance checks were conducted on 10 per cent of the assessments. 137 Of the 970 projects assessed, there were documented score reviews in respect of 19. 138 As discussed at paragraph 4.7, the term ‘highly ranked’ was applied to all projects that had met each of the five selection criteria to at least the minimum pass threshold score.

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Transparency of the basis for selection

4.72 As discussed at paragraph 3.49, in the context of a competitive grant  program,  value  for  money  relates  to  the  extent  to  which  a  project  will  contribute to maximising the achievement of program objectives within the  funding  available.  In  that  respect,  the  department  invested  considerable  resources  in  developing  a  methodology  for  assessing  and  scoring  each  competing  application  against  the  published  selection  criteria.  If  soundly  designed and implemented, the resulting scores can reasonably be expected to  reflect the relative merit of projects against the program objectives.  

4.73 As noted at paragraph 4.9, the assessment guidelines had instructed  assessors that an independent person should be able to read the justification  statement and understand the reasons for the score allocated, and should not  have to read the claims made in the application to understand those reasons.  The  emphasis  placed  on  ensuring  the  assessment  scores  were  robust  was  highlighted to the delegate in the ARC’s 2 March 2010 presentation.136  

4.74 However,  as  with  the  first  round,  the  committee’s  subsequent  deliberations were not undertaken within a framework that sought to reconcile  the  range  of  scores  achieved  by  each  o f  the  eligible  projects  against  the  published selection criteria with the committee’s reasons for deciding whether  they respectively merited funding.137 Instead, the judgements brought to bear  by  the  ARC  were  expressed  in  qualitative  terms.  The  extent  to  which  the  resulting selection outcomes differed from the relative merit indicated by the  scored assessments significantly diminished the utility of applying a robust  quantitative ranking methodology.  

4.75 The ARC presentation also advised the delegate that: 

Of the highly ranked proposals not recommended by the Assessment Review  Committee,  the  main  consideration  was  low  value  for  money  compared  to  other highly ranking projects138, especially in terms of: 

                                                       136 Specifically, the presentation advised the delegate that: 113 assessors and 28 moderators assessed the project proposals against five assessment criteria and applied a rating out of five; the majority of assessments were undertaken

in state offices, and that this had ensured that an understanding and appreciation of the needs of the local community were applied to the assessment process; and quality assurance checks were conducted on 10 per cent of the assessments. 137

Of the 970 projects assessed, there were documented score reviews in respect of 19. 138 As discussed at paragraph 4.7, the term ‘highly ranked’ was applied to all projects that had met each of the five selection criteria to at least the minimum pass threshold score.

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 the  level  of  funding  expenditure  against  the  number  of  jobs  to  be  created and/or retained through the project; and 

 the focus on infrastructure construction and/or the purchase of land  and  capital  over  an  offer of  training  and  support  to  disadvantaged  groups/regions.  

4.76 In  this  respect,  as  discussed  at  paragraph  3.62,  the  inclusion  of  a  mechanism  to  establish  a  final  merit  ranking  incorporating  relevant  ARC  deliberations  would  have  enhanced  the  capacity  to  demonstrate  that  the  funded projects represented the most meritorious. This includes providing a  capacity to reconcile the documented criteria scores with the selection process  outcome in a manner that the brief qualitative comments recorded by the ARC  had  a  limited  capacity  to  do.  In  particular,  subject  to  appropriate  probity  controls and documentation, reflecting the matters considered by the ARC in  deciding each project’s overall merit in the scores assigned at the conclusion of  the selection process would enhance the capacity to demonstrate: 

 that  all  matters  taken  into  account  directly  related  to  the  published  selection  criteria,  and  only  matters  provided  for  under  the  program  guidelines had been taken into account; and 

 the

  relative  merits  of  competing  projects  as  a  basis  for  formulating  recommendations to the decision‐maker. 

4.77 At  a  minimum,  this  would  be  supported  by  confirmation  that  the  scores allocated to a project would not have been different had the assessor  had access to additional information obtained during the ARC deliberations. 

4.78 The  outcomes  of  both  rounds  of  the  Jobs  Fund  also  highlight  the  difficulties  for  maintaining  appropriate  transparency  over  grant  funding  decisions  where,  as  in  this  case,  important  considerations  relating  to  the  assessment of value for money (including, but not limited to, cost effectiveness  measures),  and  risk  are  not  incorporated  into  the  scoring  or  rating  methodology  used  to  rank  competing  projects.  Reflecting  all  matters  considered  in  determining  a  project’s  overall  merit  against  the  program  objectives in the scores or ratings assigned to each project provides a much  better basis for demonstrating competing projects’ relative merits. 

Supplementary approval of projects by the delegate 4.79 Following the 18 March 2010 approval of the 50 projects recommended  by the ARC, the delegate sought information from the department in relation  to a small number of unapproved projects, primarily focussed on: 

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the other, from the GCW stream, had been included in the suggested  possible list141; and 

 ACT applications were revisited and the one already approved project  was the only one that passed the selection criteria. 

4.83 The  criteria  applied  in  selecting  which  of  the  unsuccessful  ‘pass’  projects in South Australia and Western Australia would be included on the  ‘next best’ list were not identified. 

4.84 The delegate was also provided with a spreadsheet of eight projects,  which were identified as having been drawn from the 15 projects removed by  the ARC. However, one of the projects (in Western Australia) on the version of  the spreadsheet held in department records had not been considered by the  ARC due to not meeting any of the selection criteria. Again, the spreadsheet  provided details of the projects, but did not identify their respective criteria  scores. The criteria on which the projects included in the list had been selected  were not recorded. The seven projects on this list that had been included in the  15 rejected by the ARC on 18 March 2010 had scores ranging from 17 to 21,  with the remaining eight projects in that group that were not highlighted to th e  delegate having scores ranging from 17 to 22.  

4.85 The delegate was provided with electronic copies of the applications for  the projects included on both spreadsheets, together with the applications for  the 50 projects that had been approved on 18 March 2010. The department did  not provide the delegate with the completed selection criteria assessments for  any projects to inform his consideration of their respective merits. 

4.86 As noted at paragraph 4.69, the establishment of a final merit ranking  of  competing,  eligible  projects  was  not  part  of  the  ARC  decision‐making  process, including within the 65 projects from which the final 50 recommended  projects  had  been  selected.  Consequently,  the  ARC  had  also  not  sought  to  identify a merit ranking between the 15 projects ultimately excluded. Had a  ranking approach been adopted, the ‘next best’ for consideration within the  population of competing applications based on the assessed merits against the  program guidelines would have been readily apparent. 

                                                       141 In compiling the ‘next best’ list, it had been noted within the department that, for the Northern Territory: ‘There were no applications, whether LJ or GCW, that were considered by ARC to be suitable for funding other than the one which is

already recommended.’ As noted at paragraphs 4.53 and 4.56, the only project in the Northern Territory with a pass score was rejected at the ARC’s 2 February 2010 meeting. The recommended project’s score was improved from a fail to a pass following a score review.

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 unapproved projects in jurisdictions with lower approval levels, being  South  Australia,  Western  Australia,  the  Northern  Territory  and  the  ACT; and 

 the  15  projects  the  ARC  had  originally  recommended  but  had  reconsidered prior to the final recommendation to the delegate. 

4.80 The delegate subsequently recorded that this process had been initiated  because, upon his return from overseas, he: 

... wanted to conduct a bit of due diligence on my decision making, given that  I had pushed hard for the benchmark to be at a very high level.139 

4.81 The department provided the delegate with a spreadsheet described as  a ‘next best’ list of projects for potential approval. None of those proposals had  been included in the 65 recommended and possible projects provided to the  delegate  for  comment  on  2  March  2010.  The  ‘next  best’  list  included  seven  projects  (four  GCW  and  three  LJ),  and  comprised  four  projects  in  South Australia, two in Western Australia and one in the Northern Territory. 

4.82 The  spreadsheet  provided  details  in  relation  to  each  project  and  a  comment relating to the earlier consideration by the ARC, but did not identify  their respective criteria scores. Although identified as a ‘next best’ list, th ere is  no evidence of the department giving consideration in compiling the list to any  unsuccessful projects outside of those four jurisdictions.140 The projects on the  ‘next  best’  list  had  achieved  assessment  scores  ranging  from  15  to  23.  The delegate was advised that, in compiling the list: 

 all  applications  that  scored  a  ‘pass’  score  in  South  Australia  were  revisited, with four (two in each stream) being suggested as possible; 

 all applications that scored a ‘pass’ score in Western Australia had been  revisited, with two projects (one GCW and one LJ) being suggested as  possible; 

 Northern Territory applications were revisited: two applications from  the Northern Territory passed, one of which had been approved and 

                                                       139 See the delegate’s comments to the ARC, set out in paragraph 4.42. 140

As noted at paragraph 4.50, the program guidelines did not provide for geographical distribution to be a factor taken into account in determining which projects would be selected for funding.

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the other, from the GCW stream, had been included in the suggested  possible list141; and 

 ACT applications were revisited and the one already approved project  was the only one that passed the selection criteria. 

4.83 The  criteria  applied  in  selecting  which  of  the  unsuccessful  ‘pass’  projects in South Australia and Western Australia would be included on the  ‘next best’ list were not identified. 

4.84 The delegate was also provided with a spreadsheet of eight projects,  which were identified as having been drawn from the 15 projects removed by  the ARC. However, one of the projects (in Western Australia) on the version of  the spreadsheet held in department records had not been considered by the  ARC due to not meeting any of the selection criteria. Again, the spreadsheet  provided details of the projects, but did not identify their respective criteria  scores. The criteria on which the projects included in the list had been selected  were not recorded. The seven projects on this list that had been included in the  15 rejected by the ARC on 18 March 2010 had scores ranging from 17 to 21,  with the remaining eight projects in that group that were not highlighted to th e  delegate having scores ranging from 17 to 22.  

4.85 The delegate was provided with electronic copies of the applications for  the projects included on both spreadsheets, together with the applications for  the 50 projects that had been approved on 18 March 2010. The department did  not provide the delegate with the completed selection criteria assessments for  any projects to inform his consideration of their respective merits. 

4.86 As noted at paragraph 4.69, the establishment of a final merit ranking  of  competing,  eligible  projects  was  not  part  of  the  ARC  decision‐making  process, including within the 65 projects from which the final 50 recommended  projects  had  been  selected.  Consequently,  the  ARC  had  also  not  sought  to  identify a merit ranking between the 15 projects ultimately excluded. Had a  ranking approach been adopted, the ‘next best’ for consideration within the  population of competing applications based on the assessed merits against the  program guidelines would have been readily apparent. 

                                                       141 In compiling the ‘next best’ list, it had been noted within the department that, for the Northern Territory: ‘There were no applications, whether LJ or GCW, that were considered by ARC to be suitable for funding other than the one which is

already recommended.’ As noted at paragraphs 4.53 and 4.56, the only project in the Northern Territory with a pass score was rejected at the ARC’s 2 February 2010 meeting. The recommended project’s score was improved from a fail to a pass following a score review.

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 unapproved projects in jurisdictions with lower approval levels, being  South  Australia,  Western  Australia,  the  Northern  Territory  and  the  ACT; and 

 the  15  projects  the  ARC  had  originally  recommended  but  had  reconsidered prior to the final recommendation to the delegate. 

4.80 The delegate subsequently recorded that this process had been initiated  because, upon his return from overseas, he: 

... wanted to conduct a bit of due diligence on my decision making, given that  I had pushed hard for the benchmark to be at a very high level.139 

4.81 The department provided the delegate with a spreadsheet described as  a ‘next best’ list of projects for potential approval. None of those proposals had  been included in the 65 recommended and possible projects provided to the  delegate  for  comment  on  2  March  2010.  The  ‘next  best’  list  included  seven  projects  (four  GCW  and  three  LJ),  and  comprised  four  projects  in  South Australia, two in Western Australia and one in the Northern Territory. 

4.82 The  spreadsheet  provided  details  in  relation  to  each  project  and  a  comment relating to the earlier consideration by the ARC, but did not identify  their respective criteria scores. Although identified as a ‘next best’ list, th ere is  no evidence of the department giving consideration in compiling the list to any  unsuccessful projects outside of those four jurisdictions.140 The projects on the  ‘next  best’  list  had  achieved  assessment  scores  ranging  from  15  to  23.  The delegate was advised that, in compiling the list: 

 all  applications  that  scored  a  ‘pass’  score  in  South  Australia  were  revisited, with four (two in each stream) being suggested as possible; 

 all applications that scored a ‘pass’ score in Western Australia had been  revisited, with two projects (one GCW and one LJ) being suggested as  possible; 

 Northern Territory applications were revisited: two applications from  the Northern Territory passed, one of which had been approved and 

                                                       139 See the delegate’s comments to the ARC, set out in paragraph 4.42. 140

As noted at paragraph 4.50, the program guidelines did not provide for geographical distribution to be a factor taken into account in determining which projects would be selected for funding.

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Approval of second tranche of projects

4.87 On 23 March 2010, the delegate advised that he had decided to approve  $2.63 million for a further three projects (two LJ and one GCW). Each of those  had been included in the extract of projects from the 15 eliminated by the ARC  provided  to  the  delegate.  The  delegate  advised  that  he  had  reviewed  the  proposals on which further information had been provided and that: 

... it was very reassuring in terms of our decision making. It confirmed for me  that we had good reason not to have considered further the [Local Jobs] projects  (outside the 15) and those below the line in the States that did not get as many  projects approved. I endorse again the ARC’s judgement that there were not  other projects I would have been prepared to approve in those groups. 

Among  the  fifteen  projects  that  had  originally  been  proposed  for  my  consideration, I also agree that there were good reasons not to have proceeded.  There were just three in that group that, on reflection, I have decided that I  would  like  to  reconsider  and  approve.  This  do esn’t  mean  that  I  don’t  understand  the  ARC  decision  not  to  take  these  three  to  the  next  level  of  approval but each of the three is significantly enough better than the others not  approved and similar enough in quality to some approved that I have decided  to add those to the approved list, subject to conditions that address some of the  issues ARC considered in relation to each.  

4.88 The  delegate  advised  that  he  had  decided  to  approve  one  of  the  LJ projects subject to further discussion with the applicant about the possibility  of more job and training outcomes and less reliance on wage subsidies; and the  other  LJ  project  subject  to  further  discussion  of  unit  cost  for  the  proposed  employment outcomes. The delegate approved the three additional projects on  23 March 2010 after being advised that both applicants had agreed to increase  the number of jobs created for the same level of funding, thereby reducing the  unit cost.142 

Conclusion 4.89 The  approach  initially  adopted  for  presenting  applications  for  ARC  consideration in the second round of the LJ and GCW streams of the Jobs Fund 

                                                       142 One applicant agreed to increase jobs from 31 to 50. With 40 work experience and nine traineeships also proposed, this represented a unit cost of $14 701. These outcomes were identified in the approval instrument signed on

23 March 2010. On 24 March 2010, the delegate was advised the applicant wished to reduce the jobs to 41, resulting in a unit cost of $16 270. The department suggested that: ‘…a new Delegate’s instrument is not required because the funding level is unchanged and with Round 1 several projects had changed outcomes as a result of Funding Agreement negotiations which did not require a revised Delegate’s instrument.’ The delegate confirmed that the project was still approved.

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Approval of second tranche of projects

4.87 On 23 March 2010, the delegate advised that he had decided to approve  $2.63 million for a further three projects (two LJ and one GCW). Each of those  had been included in the extract of projects from the 15 eliminated by the ARC  provided  to  the  delegate.  The  delegate  advised  that  he  had  reviewed  the  proposals on which further information had been provided and that: 

... it was very reassuring in terms of our decision making. It confirmed for me  that we had good reason not to have considered further the [Local Jobs] projects  (outside the 15) and those below the line in the States that did not get as many  projects approved. I endorse again the ARC’s judgement that there were not  other projects I would have been prepared to approve in those groups. 

Among  the  fifteen  projects  that  had  originally  been  proposed  for  my  consideration, I also agree that there were good reasons not to have proceeded.  There were just three in that group that, on reflection, I have decided that I  would  like  to  reconsider  and  approve.  This  do esn’t  mean  that  I  don’t  understand  the  ARC  decision  not  to  take  these  three  to  the  next  level  of  approval but each of the three is significantly enough better than the others not  approved and similar enough in quality to some approved that I have decided  to add those to the approved list, subject to conditions that address some of the  issues ARC considered in relation to each.  

4.88 The  delegate  advised  that  he  had  decided  to  approve  one  of  the  LJ projects subject to further discussion with the applicant about the possibility  of more job and training outcomes and less reliance on wage subsidies; and the  other  LJ  project  subject  to  further  discussion  of  unit  cost  for  the  proposed  employment outcomes. The delegate approved the three additional projects on  23 March 2010 after being advised that both applicants had agreed to increase  the number of jobs created for the same level of funding, thereby reducing the  unit cost.142 

Conclusion 4.89 The  approach  initially  adopted  for  presenting  applications  for  ARC  consideration in the second round of the LJ and GCW streams of the Jobs Fund 

                                                       142 One applicant agreed to increase jobs from 31 to 50. With 40 work experience and nine traineeships also proposed, this represented a unit co st of $14 701. These outcomes were identified in the approval instrument signed on

23 March 2010. On 24 March 2010, the delegate was advised the applicant wished to reduce the jobs to 41, resulting in a unit cost of $16 270. The department suggested that: ‘…a new Delegate’s instrument is not required because the funding level is unchanged and with Round 1 several projects had changed outcomes as a result of Funding Agreement negotiations which did not require a revised Delegate’s instrument.’ The delegate confirmed that the project was still approved.

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represented  a  significant  improvement  over  that  taken  in  the  first  round.  Specifically,  the  assessment  of  applications  against  the  published  selection  criteria was largely completed prior to the ARC commencing its deliberations.  Projects needed to achieve the minimum identified pass score for each of the  five  selection  criteria  to  be  eligible  for  funding  consideration.  Based  on  the  scores allocated, a national merit ranking and recommended funding cut‐off  score for each stream was prepared, having regard for the funding available. 

4.90 However, proposals were not considered by the ARC in the order of  their respective national ranking, but rather on a state by state basis. In that  context, the available evidence is that some projects under both streams that  had scores below the relevant funding cut‐off score first came to be specifically  considered by the ARC having regard for the potential geographic distribution  of  recommended  projects  in  terms  of  both  jurisdictions  and  PEAs.  Such  an  approach had not been provided for in the program guidelines. 

4.91 Following consideration of comments from the departmental approval  delegate on 65 projects identified as recommended or possible across the  two  streams, the ARC recommended 50 projects for approval. Those projects were  approved  by  the  delegate  on 18 March  2010.  Some  days  later,  the delegate  approved  a  further  three  projects,  taking  total  approved  funding  to  $39 million. This represented a significant under‐allocation compared to the  $81 million available, with the approved projects representing just five per cent  of applications received. In that context, it is reasonable to expect that there  would be a high degree of correlation between the projects that had achieved  the  highest  scores  against  the  selection  criteria  and  those  that  were  recommended for approval. However, this was not the case. 

4.92 The conclusions by the ARC as to whether a project represented ‘value  for money’ were determinative as to whether it was successful. Many highly  scored  projects  were  not  funded  despite  the  significant  under‐allocation  of  available funding, while other lower scored projects were approved. In that  context,  the  judgements  brought  to  bear  by  the  ARC  were  expressed  in  qualitative  terms.  The  transparency  of  the  ARC  decision‐making  process  would have greatly benefited from the committee directly relating its decisions  as to whether each project was suitable for funding to the selection criteria set  out in the  program guidelines, and the relative merits of competing projects.  However, the ARC did not seek to recalibrate the national ranking in order to  provide an objective measure of the final assessed relative merits of competing  projects  within  each  stream.  This  significantly  diminished  the  utility  of  applying a robust quantitative ranking methodology.  

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4.93 The  outcomes  of  both  rounds  also  highlight  the  difficulties  for  maintaining  appropriate  transparency  over  grant  funding  decisions  where  important  considerations  relating  to  the  assessment  of  value  for  money  (including, but not limited to, cost effectiveness measures), and risk are not  incorporated  into  the  scoring  or  rating  methodology.  Establishing  a  mechanism  for  reflecting  in  the  scores  assigned  at  the  conclusion  of  the  selection process the matters considered by the ARC in deciding each project’s  overall merit would have significantly enhanced the capacity to demonstrate  that the selected projects were the most meritorious in terms of the program  guidelines. 

Recommendation No.1 4.94 ANAO recommends that, for future competitive grant programs, the  Department of Education, Employment and Workplace Relations incorporates  within the design of the program guidelines and assessment methodology: 

(a) criteria and an associated scoring or rating approach that encapsulates  all  matters  considered  relevant  to  identifying  the  most  meritorious  projects, having regard for the program objectives and the obligations  applying to decisions to approve grants of public money; and 

(b) the process by which the final score or rating assigned to each project  will reflect the matters considered in the  selection deliberations and be  used to drive the compilation of the merit list of eligible applications. 

DEEWR response: 

4.95 Agreed. 

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4.93 The  outcomes  of  both  rounds  also  highlight  the  difficulties  for  maintaining  appropriate  transparency  over  grant  funding  decisions  where  important  considerations  relating  to  the  assessment  of  value  for  money  (including, but not limited to, cost effectiveness measures), and risk are not  incorporated  into  the  scoring  or  rating  methodology.  Establishing  a  mechanism  for  reflecting  in  the  scores  assigned  at  the  conclusion  of  the  selection process the matters considered by the ARC in deciding each project’s  overall merit would have significantly enhanced the capacity to demonstrate  that the selected projects were the most meritorious in terms of the program  guidelines. 

Recommendation No.1 4.94 ANAO recommends that, for future competitive grant programs, the  Department of Education, Employment and Workplace Relations incorporates  within the design of the program guidelines and assessment methodology: 

(a) criteria and an associated scoring or rating approach that encapsulates  all  matters  considered  relevant  to  identifying  the  most  meritorious  projects, having regard for the program objectives and the obligations  applying to decisions to approve grants of public money; and 

(b) the process by which the final score or rating assigned to each project  will reflect the matters considered in the  selection deliberations and be  used to drive the compilation of the merit list of eligible applications. 

DEEWR response: 

4.95 Agreed. 

Program Outcomes

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5. Program Outcomes

This chapter examines the administration of Local Jobs projects, with a focus on the  extent to which the program demonstrably delivered economic stimulus outcomes. 

Introduction 5.1 The criterion adopted by the Government for the design of the stimulus  packages established in response to the global financial crisis was that they be  timely,  targeted  and  temporary.143  For  the  LJ  stream,  the  projects  through  which employment stimulus and skill development was to be achieved were to  be  focussed  on  also  providing  community  and  environmental  benefits.  Projects were  required  to  be  in  an  area  experiencing  high  or  increasing  unemployment or vulnerability (for the first round) and assist disadvantaged  groups or regions; be ‘ready to start’; and be completed within the defined  program  window  to  enable  all  funding  to  be  paid  to  proponents  by  30 June 2011. Accordingly, ANAO examined DEEWR’s: 

 arrangements  for  administering  grant  payments  and  the  extent  to  which the program demonstrably delivered timely financial stimulus; 

 development and implementation of an evaluation framework for the  Jobs Fund as a component of the Jobs and Training Compact; and 

 monitoring of achieved employment and training outcomes. 

Delivery of financial stimulus 5.2 Funding  agreements  were  signed  for  92  of  the  93 projects  approved  under  the   LJ stream,  with  one  project  being  withdrawn  by  the  proponent.  DEEWR  developed  a  comprehensive  suite  of  material  to  guide  the  establishment and management of funding agreements.  

Timeliness of funding agreement execution

5.3 Draft agreements for the 64 first round LJ projects were provided to  funding  recipients  shortly  following  finalisation  of  the  selection  process  on  14 August 2009. By the end of December 2009, around two thirds had been 

                                                       143 House of Representatives Standing Committee on Infrastructure, Transport, Regional Development and Local Government, The Global Financial Crisis and regional Australia, November 2009, p. 55.

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executed (41 projects, 64 per cent). A further 18 (28 per cent) were signed in  January 2010, and the remaining five by the end of March 2010. In a number of  cases, this process was delayed by the need to obtain additional information  from  applicants  and/or  negotiate  revised  timeframes  and  budgets.144  Finalisation of funding agreements for the 21 second round projects approved  on 23 March 2010 was more timely, with 18 (86 per cent) being signed by the  end of May 2010 (about two months after the selection process was finalised).  The remaining three agreements were signed by the end of June 2010. 

5.4 In  contrast,  funding  agreements  for  the  seven  bike  path  projects  approved  on  7  January  2010145  were  not  executed  until  June  2010,  nearly  six months after approval. This delay arose as a result of ongoing uncertainty  as to which department would be responsible for administering the projects.  Letters  advising  the  relevant  applicants  of  their  success  were  not  sent  by  DEEWR until agreement had been reached between relevant Ministerial offices  (in late March 2010) that, while DEEWR had undertaken the selection process  utilising  funding  it  administered,  the  then  DITRDLG  would  administer  the  projects.  This  approach  was  reflected  in  letter s  provided  to  the  successful  applicants by DEEWR on 7 April 2010, which advised that DITRDLG would be  shortly contacting them to develop a funding agreement.  

5.5 However, this arrangement could not proceed due to the absence of an  appropriate  mechanism  for  transferring  the  funding.  As  a  result,  DEEWR  provided  the  proponents  with  draft  funding  agreements  in  late  May  2010,  which were all signed in June 2010. The milestone payments for these projects  were  structured  in  a  significantly  different  manner  to  that  used  for  other  projects (see further at paragraphs 5.7 to 5.10). 

5.6 The funding agreement for one of the 92 contracted LJ projects was  terminated in April 2011 with the project not having commenced. The funding 

                                                       144 In September 2009, DEEWR advised the then Minister for Employment Participation that progress in finalising funding agreements had been affected by the high complexity of some projects ‘...which involve, for example: infrastructure

upgrades including on property which is owned or controlled by third parties; purchase of significant assets; and projects relying on funding from other sources which is critical to the project’s success. In addition, many applications for funding did not include sufficiently detailed information to enable drafting of the legal document. As a result, requests for more information from proponents has been required.’ In early October 2009, the Minister was further advised that clarifications being sought related to issues including project budgets, arrangements with third parties, ownership of the facilities to be upgraded and/or ownership of land where building was planned. Other reasons for delays included organisations asking to review the level of funding because they had made errors in their application or to change the project; and budgets based on a two year project commencing in July 2009 now being reviewed to allow funding to end by 30 June 2011. In this respect, the applications submitted for 57 (89 per cent) of the 64 projects had a project commencement date of August 2009 or earlier. 145

See paragraphs 3.75 to 3.83.

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executed (41 projects, 64 per cent). A further 18 (28 per cent) were signed in  January 2010, and the remaining five by the end of March 2010. In a number of  cases, this process was delayed by the need to obtain additional information  from  applicants  and/or  negotiate  revised  timeframes  and  budgets.144  Finalisation of funding agreements for the 21 second round projects approved  on 23 March 2010 was more timely, with 18 (86 per cent) being signed by the  end of May 2010 (about two months after the selection process was finalised).  The remaining three agreements were signed by the end of June 2010. 

5.4 In  contrast,  funding  agreements  for  the  seven  bike  path  projects  approved  on  7  January  2010145  were  not  executed  until  June  2010,  nearly  six months after approval. This delay arose as a result of ongoing uncertainty  as to which department would be responsible for administering the projects.  Letters  advising  the  relevant  applicants  of  their  success  were  not  sent  by  DEEWR until agreement had been reached between relevant Ministerial offices  (in late March 2010) that, while DEEWR had undertaken the selection process  utilising  funding  it  administered,  the  then  DITRDLG  would  administer  the  projects.  This  approach  was  reflected  in  letter s  provided  to  the  successful  applicants by DEEWR on 7 April 2010, which advised that DITRDLG would be  shortly contacting them to develop a funding agreement.  

5.5 However, this arrangement could not proceed due to the absence of an  appropriate  mechanism  for  transferring  the  funding.  As  a  result,  DEEWR  provided  the  proponents  with  draft  funding  agreements  in  late  May  2010,  which were all signed in June 2010. The milestone payments for these projects  were  structured  in  a  significantly  different  manner  to  that  used  for  other  projects (see further at paragraphs 5.7 to 5.10). 

5.6 The funding agreement for one of the 92 contracted LJ projects was  terminated in April 2011 with the project not having commenced. The funding 

                                                       144 In September 2009, DEEWR advised the then Minister for Employment Participation that progress in finalising funding agreements had been affected by the high complexity of some projects ‘...which involve, for example: infrastructure

upgrades including on property which is owned or controlled by third parties; purchase of significant assets; and projects relying on funding from other sources which is critical to the project’s success. In addition, many applications for funding did not include sufficiently detailed information to enable drafting of the legal document. As a result, requests for more information from proponents has been required.’ In early October 2009, the Minister was further advised that clarifications being sought related to issues including project budgets, arrangements with third parties, ownership of the facilities to be upgraded and/or ownership of land where building was planned. Other reasons for delays included organisations asking to review the level of funding because they had made errors in their application or to change the project; and budgets based on a two year project commencing in July 2009 now being reviewed to allow funding to end by 30 June 2011. In this respect, the applications submitted for 57 (89 per cent) of the 64 projects had a project commencement date of August 2009 or earlier. 145

See paragraphs 3.75 to 3.83.

Program Outcomes

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agreement for another project (which involved the engagement and up‐skilling  of job seekers to undertake energy and water assessments and retrofits) was  varied in May 2010 to provide for the remaining $500 000 of the $1.4 million  approved  grant  to  be  paid  out  to  support  retention  of  existing  employees.  The project’s financing had been dependant on the Home Insulation Program  (HIP). The proponent wrote to DEEWR in February 2010 advising that, as a  result of the decision to terminate that scheme, it no longer had work for the  67 people  it  identified  as  being  then  employed  under  the  project.  DEEWR  agreed in February that the funding agreement was to be varied to pay out the  remaining  $500 000  in  advance  based  on  the  cost  of  the  equivalent  of  four  months  Newstart  allowance  for  67 workers  ($268 000),  with  the  remaining  $232 000 to be used to offset other costs. Retention of the 67 jobs was to be  acquitted at the end of the 2009-10 financial year. After negotiations to identify  the correct number of employees then engaged in relation to the Jobs Fund  project, the $500 000 payment was made in May 2010 on provision of evidence  the

 proponent would retain 30 workers on the project.146  

Structuring of contracted project payments

5.7 The guidelines for both rounds of the Jobs Fund stated that funding  agreements would generally be structured to provide for an initial payment of  between 25 and 50 per cent of the grant and remaining funds to be paid upon  achievement of negotiated milestones and satisfactory milestone reports. 

5.8 In this respect, the funding agreements established for the majority of  contracted  LJ  projects  adopted  a  prudent  risk  management  approach  to  structuring  grant  payments.  There  were  no  instances  where  payment  was  made solely because the funding agreement had been signed. In each case, the  funding  recipient  was  required  to  provide  evidence  as  to  relevant  matters  relating to the project’s readiness to proceed.147 

                                                       146 A further three milestones ending in June 2011 related to the proponent providing evidence of having implemented a new business plan, acquitting actual expenditure and providing evidence of having retained 30 jobs and created up to

170 jobs (which had been the originally contracted employment outcome). No payments were associated with those milestones, but the funding agreement provided for the recovery of nominated amounts in respect to any of the four milestones DEEWR determined had not been satisfied. The final reported employment outcomes for this project were the creation or retention of 68 jobs and three work experience places. 147

The then DITRDLG had taken a similar approach in administering projects funded under the IEP stream and quarantined bike path component of the Local Jobs stream. The approaches adopted by DEEWR and DITRDLG were an improvement over that adopted by the then DEWHA in administering projects under the quarantined heritage component, for which initial payments of up to 50 per cent were made upon signing of the funding agreement (see ANAO Audit Report No.11 2012-13, op. cit., pp. 144-147.

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5.9 More  than  three  quarters  of  grants  (71  projects,  77 per  cent)  were  contracted to be paid over four or more instalments upon the achievement of  nominated milestones, with higher value grants generally being delivered over  a  larger  number  of  milestone  payments.  While  first  payments  varied  significantly as a proportion of the approved grant (from one per cent up to  96 per cent), the average first payment represented 35 per cent of the grant. 

5.10 Of the eight projects (nine per cent) contracted to receive more than  75 per cent of the relevant grant as an initial payment, three involved relatively  low  value  grants  of  between  $33 360  and  $113 800  (with  first  payments  of  between  79 per  cent  and  89 per  cent).  The  remainder  related  to  five  of  the  seven bike path projects for which funding agreements were not signed until  June  2010  (see  paragraphs  5.4  to  5.5).  Those  projects  involved  one  grant  of  $75 000,  with  the  remaining  four  grants  ranging  from  $288 363  to  $362 000.  The first payment for those five projects represented between 86 per cent and  96 per cent of the approved  grant.148 The remaining two bike path projects,  involving grants o f $100 000 and $285 000 respectively, were to receive initial  payments of 69 per cent and 70 per cent respectively. 

Monitoring project progress

5.11 DEEWR  actively  monitored  the  provision  of  progress  reports  by  funding recipients, and also conducted site visits.149 These processes allowed  the  department  to  be  informed  about  the  progress  made  in  implementing  projects. Where projects experienced significant delays, DEEWR generally took  proactive steps to engage with the relevant proponents and develop remedial  strategies that would assist in maximising the delivery of the project within the  required timeframe while appropriately managing risk. 

5.12 There  was  some  variation  between  state  offices  in  terms  of  the  approaches adopted to administering funding agreements. Overall, however,  the administration of LJ stream funding agreements was effective in terms of 

                                                       148 For one of these projects, the first instalment paid in June 2010 of $300 000 represented 96.2 per cent of the approved grant. That project was one of five LJ stream projects that were extended into the 2011-12 financial year as a result of

being unable to be completed by the budgeted program end-date of 30 June 2011. The second instalment of $11 818 payable upon completion was not made until February 2012. 149 DEEWR’s contract management guidelines specified that contract managers were to ensure all projects were regularly

monitored via desktop activities (involving consideration of progress reports and regular contact with proponents, more frequent if milestone completion was delayed or remedial action needed) and project visits. In this latter respect, the guidelines stipulated that high risk/high value projects, for which a performance monitoring plan was to be prepared, were expected to be visited at least once, with more frequent visits required if the project was experiencing delays or under performance.

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5.9 More  than  three  quarters  of  grants  (71  projects,  77 per  cent)  were  contracted to be paid over four or more instalments upon the achievement of  nominated milestones, with higher value grants generally being delivered over  a  larger  number  of  milestone  payments.  While  first  payments  varied  significantly as a proportion of the approved grant (from one per cent up to  96 per cent), the average first payment represented 35 per cent of the grant. 

5.10 Of the eight projects (nine per cent) contracted to receive more than  75 per cent of the relevant grant as an initial payment, three involved relatively  low  value  grants  of  between  $33 360  and  $113 800  (with  first  payments  of  between  79 per  cent  and  89 per  cent).  The  remainder  related  to  five  of  the  seven bike path projects for which funding agreements were not signed until  June  2010  (see  paragraphs  5.4  to  5.5).  Those  projects  involved  one  grant  of  $75 000,  with  the  remaining  four  grants  ranging  from  $288 363  to  $362 000.  The first payment for those five projects represented between 86 per cent and  96 per cent of the  approved grant.148 The remaining two bike path projects,  involving grants of $100 000 and $285 000 respectively, were to receive initial  payments of 69 per cent and 70 per cent respectively. 

Monitoring project progress

5.11 DEEWR  actively  monitored  the  provision  of  progress  reports  by  funding recipients, and also conducted site visits.149 These processes allowed  the  department  to  be  informed  about  the  progress  made  in  implementing  projects. Where projects experienced significant delays, DEEWR generally took  proactive steps to engage with the relevant proponents and develop remedial  strategies that would assist in maximising the delivery of the project within the  required timeframe while appropriately managing risk. 

5.12 There  was  some  variation  between  state  offices  in  terms  of  the  approaches adopted to administering funding agreements. Overall, however,  the administration of LJ stream funding agreements was effective in terms of 

                                                       148 For one of these projects, the first instalment paid in June 2010 of $300 000 represented 96.2 per cent of the approved grant. That project was one of five LJ stream projects that were extended into the 2011-12 financial year as a result of

being unable to be completed by the budgeted program end-date of 30 June 2011. The second instalment of $11 818 payable upon completion was not made until February 2012. 149 DEEWR’s contract management guidelines specified that contract managers were to ensure all projects were regularly

monitored via desktop activities (involving consideration of progress reports and regular contact with proponents, more frequent if milestone completion was delayed or remedial action needed) and project visits. In this latter respect, the guidelines stipulated that high risk/high value projects, for which a performance monitoring plan was to be prepared, were expected to be visited at least once, with more frequent visits required if the project was experiencing delays or under performance.

Program Outcomes

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aligning  the  payment  of  grant  funds  with  the  achievement  of  project  milestones. In particular, the documented procedures for ensuring evidence  supporting the achievement of contracted milestones was provided prior to an  associated payment being made were soundly administered. 

Spending of economic stimulus funding

5.13 Collectively,  the  92  LJ  stream  projects  were  contracted  to  receive  payments totalling $69.16 million by 30 June 2011. Figure 5.1 compares total  payments contracted to be made in each quarter between October 2009 and  30 June 2011, with the actual total payments made in each quarter.  

Figure 5.1

Comparison of total contracted and actual quarterly payments for Local Jobs stream projects up to budgeted program end-date of June 2011

 

Source: ANAO analysis of funding agreements and DEEWR project management records.

5.14 As Figure 5.1 illustrates, expenditure was somewhat delayed compared  to the expectations established by the 92 funding agreements. By the end of 

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

Oct to Dec 09 Jan to Mar 10 Apr to June 10July to Sep 10 Oct to Dec 10 Jan to Mar 11 Apr to June 11

Total contracted and actual payments per quarter ($ million)

Quarter

Amount contracted to be paid in the quarter Actual payments made in the quarter

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March 2010 (12 months after the Jobs Fund was agreed to as a measure to  provide immediate employment stimulus, and more than seven months after  the first round was completed), actual payments totalled $12.2 million. This fell  $9.8 million (45 per cent) short of the $22 million contracted to have been paid  from September 2009 (when agreements were first signed) to 31 March 2010.  

5.15 This  significant  underspend  was  a  result  of  delays  in  funding  recipients’ ability to satisfy project milestones. For example, all but one of the  64 LJ projects approved in the first round concluded on 14 August 2009 were  contracted  to  receive  at  least  a  first  payment  by  the  end  of  March  2010  (totalling $12.55 million).150 Those payments were dependent upon the funding  recipients demonstrating that the relevant project was ready to commence or  underway. However, only 38 (60 per cent) of those 63 projects were assessed as  satisfying  the  relevant  milestone  requirements  by  the  end  of  March  2010  (resulting in total initial payments made to that time of $8.88 million). It was  not until October 2010 that all of the remaining 25 first round projects that did  proceed  had  progressed  sufficiently  toward  implementation  for  DEEWR  to  asses

s that an initial grant instalment was able to be paid.151 

5.16 This  reflected  a  disciplined  approach  to  funding  agreement  management by DEEWR. However, as a consequence of projects’ inability to  progress at the rate anticipated (despite having been approved on the basis  they  met  the  requirement  to  be  ready  to  start152),  delivery  of  the  expected  employment  stimulus  was  similarly  delayed.153  Subsequent  to  receiving  the  first grant instalment, a number of projects experienced further delays, which  was reflected in the rate at which further payments were able to be made. 

5.17 As Figure 5.1 further shows, project payments increased substantially  to  $24.5 million  in  the  quarter  ending  30  June  2010,  with  72 per  cent  ($17.6 million) of that expenditure  occurring in June 2010. As a result, total  payments  for  the  2009-10  financial  year  of  $34.4 million  represented 

                                                       150 The funding agreement for the remaining project was not signed until 24 March 2010 due to the original proponent being unable to meet the employment outcomes on which the approval had been based. An agreement with a

replacement proponent provided for a first payment of $250 000 (22 per cent of the $1.12 million grant) 40 days from the date of the agreement. The payment was approved in May 2010. 151 Initial payments were made to: nine projects in April 2010 ($928 786); 11 projects in May 2010 ($1.475 million);

four projects in June 2010 ($1.032 million) and one project in October 2010 ($40 775). 152 The second gateway criterion for the first round required that projects be ‘viable and ready to start’, with the program

guidelines advising that projects must be ‘ready-to-start’ within six months of signing the funding agreement and, where relevant, construction must commence within the six month timeframe. 153 See paragraph 5.42.

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March 2010 (12 months after the Jobs Fund was agreed to as a measure to  provide immediate employment stimulus, and more than seven months after  the first round was completed), actual payments totalled $12.2 million. This fell  $9.8 million (45 per cent) short of the $22 million contracted to have been paid  from September 2009 (when agreements were first signed) to 31 March 2010.  

5.15 This  significant  underspend  was  a  result  of  delays  in  funding  recipients’ ability to satisfy project milestones. For example, all but one of the  64 LJ projects approved in the first round concluded on 14 August 2009 were  contracted  to  receive  at  least  a  first  payment  by  the  end  of  March  2010  (totalling $12.55 million).150 Those payments were dependent upon the funding  recipients demonstrating that the relevant project was ready to commence or  underway. However, only 38 (60 per cent) of those 63 projects were assessed as  satisfying  the  relevant  milestone  requirements  by  the  end  of  March  2010  (resulting in total initial payments made to that time of $8.88 million). It was  not until October 2010 that all of the remaining 25 first round projects that did  proceed  had  progressed  sufficiently  toward  implementation  for  DEEWR  to  asses

s that an initial grant instalment was able to be paid.151 

5.16 This  reflected  a  disciplined  approach  to  funding  agreement  management by DEEWR. However, as a consequence of projects’ inability to  progress at the rate anticipated (despite having been approved on the basis  they  met  the  requirement  to  be  ready  to  start152),  delivery  of  the  expected  employment  stimulus  was  similarly  delayed.153  Subsequent  to  receiving  the  first grant instalment, a number of projects experienced further delays, which  was reflected in the rate at which further payments were able to be made. 

5.17 As Figure 5.1 further shows, project payments increased substantially  to  $24.5 million  in  the  quarter  ending  30  June  2010,  with  72 per  cent  ($17.6 million) of that expenditure  occurring in June 2010. As a result, total  payments  for  the  2009-10  financial  year  of  $34.4 million  represented 

                                                       150 The funding agreement for the remaining project was not signed until 24 March 2010 due to the original proponent being unable to meet the employment outcomes on which the approval had been based. An agreement with a

replacement proponent provided for a first payment of $250 000 (22 per cent of the $1.12 million grant) 40 days from the date of the agreement. The payment was approved in May 2010. 151 Initial payments were made to: nine projects in April 2010 ($928 786); 11 projects in May 2010 ($1.475 million);

four projects in June 2010 ($1.032 million) and one project in October 2010 ($40 775). 152 The second gateway criterion for the first round required that projects be ‘viable and ready to start’, with the program

guidelines advising that projects must be ‘ready-to-start’ within six months of signing the funding agreement and, where relevant, construction must commence within the six month timeframe. 153 See paragraph 5.42.

Program Outcomes

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85 per cent of  the  $40.3  million  contracted  to be  paid  in  that  period.154  This  outcome reflected a focus within DEEWR on maximising payments in 2009-10  where  project  circumstances  were  assessed  as  supporting  this  approach.  Strategies adopted in this respect included: 

 seeking to ensure that, wherever possible, initial payments were made  before 30 June 2010 in respect to the 21 LJ projects approved in the  second round finalised on 23 March 2010. As noted at paragraph 5.3,  funding  agreements  for  18  projects  were  signed  by  the  end  of  May 2010, all of which provided for an initial payment to be made by  the  end  of  June  2010,  subject  to  milestone  requirements  being  met.  This was achieved in respect to 15 of those 18 projects; 

 contracting for a significant initial payment to be made in respect to the  seven  bike  path  projects  for  which  agreements  were  signed  in  June 2010.  Those  agreements  provided  for  initial  payments  totalling  $1.5 million (88 per cent of the $1.7 million approved for these projects)  which,  as  noted  at  paragraph  5.10,  represented  from  69 per  cent  to  96 per cent of the approved grant155; and 

 for first round projects, varying f unding agreements to bring forward  or  split  contracted  milestone  payments  to  allow  for  additional  payments to be made in 2009-10 for projects assessed as progressing  well. 

5.18 A similar pattern emerged in the 2010-11 financial year. As Figure 5.1  illustrates, total payments of $10.8 million made in the first six months of that  financial year again fell significantly short of the $17.5 million that had been  contracted to be paid in the same period.156 There was a strong focus on the  need to effectively manage outstanding projects in the lead up to the budgeted  program end‐date of 30 June 2011. This included a co‐ordinated program of  contacting proponents to alert them to the requirement to complete projects by 

                                                       154 The DEEWR financial tracking spreadsheet for Jobs Fund projects recorded a further $2.3 million in payments as having been made for 10 projects in June 2010. However, acceptance of the relevant report and approval of the

associated payment was not finalised until July 2010 or later. 155 Six of those payments were processed in late June 2010 or very early July 2010. The seventh project experienced significant delays and was not in a position to receive its first payment until May 2011, 11 months after the funding

agreement had been signed. 156 Further in this respect, the expenditure of $10.8 million in this six month period included the $2.3 million for 10 projects

that had been contracted for payment in the previous financial year but not finalised for payment until July 2010 (nine projects) and September 2010 (one project) (see footnote 154).

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June  2011  and  monitoring  project  progress.  This  was  largely  successful  in  enabling projects to be finalised to the department’s satisfaction by that time.  

Finalising projects

5.19 Final grant installments were not payable until the project as contracted  had  been  completed.  In  this  respect,  guiding  principles  were  issued  in  April 2011 to assist funding agreement managers in finalising projects that had  not  been  identified  for  extension  into  the  2011-12  financial  year.157  Those  principles  advised that, for  projects that involved works  that would  not be  completed by 30 June 2011, judgment should be applied on a case‐by‐case and  risk  assessment  basis  as  to  whether  final  payments  should  be  approved  in  June 2011. State offices were advised that, where the uncompleted work and/or  budget  and/or  the  time  delay  was  minor,  contract  managers  could  allow  prepayment  of  the  final  grant  instalment  ‘as  long  as  the  benefit  to  the  Commonwealth can be demonstrated’ [emphasis as per DEEWR document]. 

5.20 This  advice  was  reflected  in  the  funding  agreement  management  subsequently applied in which final payments were approved in June 2011 for  projects that were substantially completed at that time and expected to be fully  completed within a short timeframe. This was based upon the expectation that  any  shortfall  in  project  delivery  or  underspend  of  grant  monies  would  be  accounted  for  through  the  project  acquittal,  which  was  the  last  contracted  milestone but had no associated payment.158 

5.21 Actual payments to 30 June 2011 totalled $62.52 million, $6.64 million  (10 per cent) less than contracted. While this involved underspends for nearly  half of contracted LJ projects (44, 48 per cent): 

 $2.7 million of the underspend related to final payments for 31 projects  that had been completed as at 30 June 2011, but for which acceptance of  the final reports was not finalised until after 30 June 2011159; and 

 total  payments  for  a  further  six  projects  had  been  reduced  by  $0.51 million  as  a  result  of:  a  funding  variation  to  reflect  reduced 

                                                       157 See further at paragraphs 5.23 to 5.25. 158

By 30 June 2012, acquittal reports had been approved in respect to 86 of the 92 contracted LJ projects, and payments had been reduced and/or recovered (or identified for recovery) for 10 projects for amounts totalling some $800 000. 159 The relevant invoices had been submitted by 30 June 2011, but acceptance of the final report was not signed off until

July 2011 or later. However, similar to the approach adopted for some projects in June 2010 (see footnote 154), DEEWR’s program financial tracking spreadsheet accounted for those payments as having been made by 30 June 2011.

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June  2011  and  monitoring  project  progress.  This  was  largely  successful  in  enabling projects to be finalised to the department’s satisfaction by that time.  

Finalising projects

5.19 Final grant installments were not payable until the project as contracted  had  been  completed.  In  this  respect,  guiding  principles  were  issued  in  April 2011 to assist funding agreement managers in finalising projects that had  not  been  identified  for  extension  into  the  2011-12  financial  year.157  Those  principles  advised that, for  projects that involved works  that would  not be  completed by 30 June 2011, judgment should be applied on a case‐by‐case and  risk  assessment  basis  as  to  whether  final  payments  should  be  approved  in  June 2011. State offices were advised that, where the uncompleted work and/or  budget  and/or  the  time  delay  was  minor,  contract  managers  could  allow  prepayment  of  the  final  grant  instalment  ‘as  long  as  the  benefit  to  the  Commonwealth can be demonstrated’ [emphasis as per DEEWR document]. 

5.20 This  advice  was  reflected  in  the  funding  agreement  management  subsequently applied in which final payments were approved in June 2011 for  projects that were substantially completed at that time and expected to be fully  completed within a short timeframe. This was based upon the e xpectation that  any  shortfall  in  project  delivery  or  underspend  of  grant  monies  would  be  accounted  for  through  the  project  acquittal,  which  was  the  last  contracted  milestone but had no associated payment.158 

5.21 Actual payments to 30 June 2011 totalled $62.52 million, $6.64 million  (10 per cent) less than contracted. While this involved underspends for nearly  half of contracted LJ projects (44, 48 per cent): 

 $2.7 million of the underspend related to final payments for 31 projects  that had been completed as at 30 June 2011, but for which acceptance of  the final reports was not finalised until after 30 June 2011159; and 

 total  payments  for  a  further  six  projects  had  been  reduced  by  $0.51 million  as  a  result  of:  a  funding  variation  to  reflect  reduced 

                                                       157 See further at paragraphs 5.23 to 5.25. 158

By 30 June 2012, acquittal reports had been approved in respect to 86 of the 92 contracted LJ projects, and payments had been reduced and/or recovered (or identified for recovery) for 10 projects for amounts totalling some $800 000. 159 The relevant invoices had been submitted by 30 June 2011, but acceptance of the final report was not signed off until

July 2011 or later. However, similar to the approach adopted for some projects in June 2010 (see footnote 154), DEEWR’s program financial tracking spreadsheet accounted for those payments as having been made by 30 June 2011.

Program Outcomes

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contracted project outcomes (one project), a reduced final payment to  reflect  underachievement  against  contracted  outcomes  (one  project)  and final project costs being lower than expected (four projects). 

5.22 The remaining underspend as at 30 June 2011 of $3.43 million related to  six projects (six per cent) that had not been completed by that date, involving: 

 $2 million contracted in respect to the project terminated in April 2011  without any payments being made; and 

 $1.43 million in outstanding payments for five LJ projects unable to be  completed by the original program end‐date. 

Extension of the Jobs Fund

5.23 On  23  March  2011,  DEEWR  sought  the  Minister  for  Employment  Participation’s agreement to the need to extend the Jobs Fund to 30 June 2012  to allow for completion of projects disrupted by floods and ‘other unavoidable  delays’ in order to enable the expected community benefits to come to fruition.  The Minister was advised that, at that time, this related to 26 projects across  the LJ and GCW streams (11 per cent of contracted projects across those two  streams), and that DEEWR had submitted a request to transfer a proportion of  funds into the 2011-12 financial year. DEEWR’s advice outlined that, while  weather conditions had caused delays for some projects :  

The most common reason for slippage in Jobs Fund project timeframes and  expenditure is delays in final development approvals for construction projects  by  local  and/or  state  authorities  together  with  the  need  in  some  cases  for  extended community consultations. 

5.24 Delays in obtaining necessary approvals had also been a common cause  of projects that had been completed by 30 June 2011 failing to meet the original  timeframe  for  commencement  and,  therefore,  providing  early  economic  stimulus. In this respect, ANAO notes that in both rounds of the Jobs Fund, the  selection criteria against which DEEWR had been required to assess projects  included explicit reference to the need for applicants to demonstrate that their  project was ready to commence, including consideration of whether relevant  licences or approvals had been granted or would be obtained shortly. In that  context, the potential for delays associated with obtaining necessary approvals  is  a  common  aspect  of  construction  projects  that  would  benefit  from  more  considered examination by DEEWR in assessing applications of that nature in  future grant programs. 

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5.25 The Jobs Fund program guidelines were amended on 24 March 2011 to  extend the end‐date for the LJ and GCW streams to 30 June 2012.160 Funding of  $14.5 million  was  moved  in  the  2011-12  Budget,  including  $1.43 million  for  five  LJ projects  (five  per  cent  of  contracted  LJ projects)  for  which  the  last  payment was made in June 2012. 

Evaluation of program outcomes

Jobs and Training Compact monitoring and evaluation

5.26 In agreeing the establishment of the Jobs Fund and related stimulus  measures, the Government also agreed that DEEWR would be responsible for  monitoring the relevant elements of the Jobs and Training Compact161, with  $3.91 million over two years allocated for this purpose in 2009-10.  

5.27 Reflecting this requirement, a draft evaluation strategy was circulated  by DEEWR in February 2010, and finalised in October 2010.162 The strategy  stated that evaluation findings would be available progressively and, to meet  government  requirements,  a  final  report  would  be  completed  in  2011.  The stated aim of the evaluation was to assess whether the Compact achieved  its objectives by assessing overall performance and that of its major elements.  Performance was to be asses sed on three criteria:  

 program  engagement—the  extent  to  which  the  Compact  connected  with the broad target groups of retrenched workers, youth and local  communities. This was to be examined on the criteria  of awareness,  participation, identification and equity, and connectivity and duration; 

 effectiveness, defined as involving an assessment of the extent to which  the Compact met its desired objectives; and 

 efficiency,  defined  as  concerning  the  costs  of  the  Compact  and  the  degree  to  which  programs  can  be  more  economically  delivered,  including aspects of actual versus projected costs and relative cost. 

                                                       160 The amendment was made by way of an explanatory note published on DEEWR’s website, which formed an addendum to the guidelines. This reflected the approach that had been used in July 2010 in relation to the IEP stream

(see ANAO Audit Report No.7 2011-12, op. cit., pp. 176 to 178). 161 In addition to the Jobs Fund, DEEWR was responsible for administering a further 12 initiatives as part of the Compact, with a further two related initiatives that were not strictly part of the Compact (but to which Jobs Fund funding had been

re-allocated—see paragraph 1.21) also being included in the evaluation. The scope of the evaluation excluded those elements of the LJ stream that were not administered by DEEWR. 162 The Jobs and Training Compact Evaluation Strategy is available from the DEEWR website at http://deewr.gov.au/jobs-

and-training-compact-evaluation-strategy [accessed 6 March 2013].

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5.25 The Jobs Fund program guidelines were amended on 24 March 2011 to  extend the end‐date for the LJ and GCW streams to 30 June 2012.160 Funding of  $14.5 million  was  moved  in  the  2011-12  Budget,  including  $1.43 million  for  five  LJ projects  (five  per  cent  of  contracted  LJ projects)  for  which  the  last  payment was made in June 2012. 

Evaluation of program outcomes

Jobs and Training Compact monitoring and evaluation

5.26 In agreeing the establishment of the Jobs Fund and related stimulus  measures, the Government also agreed that DEEWR would be responsible for  monitoring the relevant elements of the Jobs and Training Compact161, with  $3.91 million over two years allocated for this purpose in 2009-10.  

5.27 Reflecting this requirement, a draft evaluation strategy was circulated  by DEEWR in February 2010, and finalised in October 2010.162 The strategy  stated that evaluation findings would be available progressively and, to meet  government  requirements,  a  final  report  would  be  completed  in  2011.  The stated aim of the evaluation was to assess whether the Compact achieved  its objectives by assessing overall performance and that of its major elements.  Performance was to be asses sed on three criteria:  

 program  engagement—the  extent  to  which  the  Compact  connected  with the broad target groups of retrenched workers, youth and local  communities. This was to be examined on the criteria  of awareness,  participation, identification and equity, and connectivity and duration; 

 effectiveness, defined as involving an assessment of the extent to which  the Compact met its desired objectives; and 

 efficiency,  defined  as  concerning  the  costs  of  the  Compact  and  the  degree  to  which  programs  can  be  more  economically  delivered,  including aspects of actual versus projected costs and relative cost. 

                                                       160 The amendment was made by way of an explanatory note published on DEEWR’s website, which formed an addendum to the guidelines. This reflected the approach that had been used in July 2010 in relation to the IEP stream

(see ANAO Audit Report No.7 2011-12, op. cit., pp. 176 to 178). 161 In addition to the Jobs Fund, DEEWR was responsible for administering a further 12 initiatives as part of the Compact, with a further two related initiatives that were not strictly part of the Compact (but to which Jobs Fund funding had been

re-allocated—see paragraph 1.21) also being included in the evaluation. The scope of the evaluation excluded those elements of the LJ stream that were not administered by DEEWR. 162 The Jobs and Training Compact Evaluation Strategy is available from the DEEWR website at http://deewr.gov.au/jobs-

and-training-compact-evaluation-strategy [accessed 6 March 2013].

Program Outcomes

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5.28 The strategy identified a series of broad questions (or evaluation issues)  that it would seek to answer.163 However, it also identified that there would be  limitations to the capacity to evaluate outcomes. Specifically: 

 the  extent  to  which  the  performance  criteria  and  evaluation  issues  could be covered would largely depend on the availability of data and  how  possible  it  was  to  identify  effects  which  could  be  attributed  to  elements of the Compact (as opposed to other stimulus measures and  program assistance);  

 for  some  initiatives,  there  had  been  limited  opportunity  to  collect  baseline  information  or  have  the  IT  systems  support  necessary  for  administrative data collection. Where data was available, it may not be  possible to identify target groups, isolate program effects or quantify  the population eligible for these programs; and 

 the capacity to assess longer‐term outcomes was limited because, as the  evaluation  was  due  to  be  completed  by  June  2011,  longer‐term  outcomes  for  participants  (particularly  those  involving  an  education  placement) would not have had sufficient time to eventuate. 

5.29 Under  those  circumstances,  the  evaluation  strategy  stated  that  an  alternative was a more q ualitative approach based on case studies, supported  by  survey  and  administrative  data  on  program  inputs  and  outcomes.  The strategy  stated  that  it  would  be  possible  to  examine  what  was  implemented in which locations and gather the views of stakeholders on the  perceived contribution of this assistance to participants and the local economy.  However, it would not be possible to derive statistical estimates of the impact  of the package overall nor of its main components. 

Jobs and Training Compact monitoring reports

5.30 The  evaluation  strategy  noted  that  monitoring  was  an  important  component of the overall performance management of the Compact, and that  this  would  involve  the  quarterly  reporting  of  program  commencements,  outcomes, costs, and the achievements of milestones. These reports were to be  provided to the SPBC via responsible Ministers. Information collected was to  also provide an important source of data for the evaluation.  

                                                       163 Relevant issues identified for the Jobs Fund were: implementation; activities undertaken; relationships with stakeholders; demographic characteristics of participants; jobs generated; skills acquisition; capacity building;

community benefit of funded projects; and sustainability of projects and jobs.

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5.31 Monitoring  reports  were  initially  produced  in  relation  to  quarterly  activity,  starting  with  a  report  in  March  2010  for  the  quarter  ended  30 September  2009.  Subsequent  reports  were  produced  in  April,  July  and  December  2010.  The  next  report  in  March  2011  related  to  activity  in  the  six months to 31 December 2010, and the final report for the six months to  30 June 2011 was produced in August 2011. The monitoring reports provided  data  on  progress  achieved  in  relation  to  the  Compact’s  three  target  groups  (retrenched  workers,  young  Australians  and  local  communities).  For  the  compact with local communities (which, as noted at paragraph 1.4, included  the Jobs Fund), the data provided related to: 

 movements in labour market indicators in the period since June 2009 in  each of the 20 PEAs164; and  

 the number of LJ and GCW projects in each PEA and other areas and a  comparison  of  expected  employment  and  training  outcomes  with  progressive actual outcomes reported by funding recipients.  

Evaluation of Jobs Fund element of the Jobs and Training Compact

5.32 At the completion of ANAO fieldwork in December 2012, the Compact  evaluation report had yet to be finalised. However, a draft was well advanced,  including a draft chapter addressing the Jobs Fund which  concluded that: 

Jobs  Fund  projects  assisted  the  employment  and  training  opportunities  of  participants  in  disadvantaged  regions and  delivered  projects  of  community  benefit.  Assessing  whether  these  benefits  are  lasting,  however,  was  not  possible. 

5.33 The  draft  evaluation  report  also  reported  that,  as  a  result  of  data  limitations,  its  evaluation  of  the  effectiveness  of  the  Jobs  Fund  was  largely  based on interviews with funding recipients and participants for a sample of  projects. In that context, the evaluation reported that: 

 the  reported  benefits  included  the  employment,  social  and  human  capital  building  of  Jobs  Fund  participants  and  the  economic  environmental and community benefits of newly constructed facilities  and programs operating in the community; and 

                                                       164 The final monitoring report reported that labour market performance in the PEAs had been relatively stable in the six months to June 2011, and that these areas generally continued to report higher levels of disadvantage than the

Australian average. Unemployment had decreased in those areas by an average 0.4 percentage points since June 2009, compared to 0.8 percentage points Australia-wide.

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5.31 Monitoring  reports  were  initially  produced  in  relation  to  quarterly  activity,  starting  with  a  report  in  March  2010  for  the  quarter  ended  30 September  2009.  Subsequent  reports  were  produced  in  April,  July  and  December  2010.  The  next  report  in  March  2011  related  to  activity  in  the  six months to 31 December 2010, and the final report for the six months to  30 June 2011 was produced in August 2011. The monitoring reports provided  data  on  progress  achieved  in  relation  to  the  Compact’s  three  target  groups  (retrenched  workers,  young  Australians  and  local  communities).  For  the  compact with local communities (which, as noted at paragraph 1.4, included  the Jobs Fund), the data provided related to: 

 movements in labour market indicators in the period since June 2009 in  each of the 20 PEAs164; and  

 the number of LJ and GCW projects in each PEA and other areas and a  comparison  of  expected  employment  and  training  outcomes  with  progressive actual outcomes reported by funding recipients.  

Evaluation of Jobs Fund element of the Jobs and Training Compact

5.32 At the completion of ANAO fieldwork in December 2012, the Compact  evaluation report had yet to be finalised. However, a draft was well advanced,  including a draft chapter addressing the Jobs Fund which  concluded that: 

Jobs  Fund  projects  assisted  the  employment  and  training  opportunities  of  participants  in  disadvantaged  regions and  delivered  projects  of  community  benefit.  Assessing  whether  these  benefits  are  lasting,  however,  was  not  possible. 

5.33 The  draft  evaluation  report  also  reported  that,  as  a  result  of  data  limitations,  its  evaluation  of  the  effectiveness  of  the  Jobs  Fund  was  largely  based on interviews with funding recipients and participants for a sample of  projects. In that context, the evaluation reported that: 

 the  reported  benefits  included  the  employment,  social  and  human  capital  building  of  Jobs  Fund  participants  and  the  economic  environmental and community benefits of newly constructed facilities  and programs operating in the community; and 

                                                       164 The final monitoring report reported that labour market performance in the PEAs had been relatively stable in the six months to June 2011, and that these areas generally continued to report higher levels of disadvantage than the

Australian average. Unemployment had decreased in those areas by an average 0.4 percentage points since June 2009, compared to 0.8 percentage points Australia-wide.

Program Outcomes

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 the numbers of jobs, traineeships and work experience places reported  by  funding  recipients  suggested  that  total  employment  and  training  outcomes achieved had exceeded the announced (expected) outcomes.  However, it was noted that the numbers of reported jobs should be  treated cautiously.165 

5.34 The  draft  evaluation  report  further  concluded  that,  reflecting  the  requirement for projects to be ready to start, many of the funded projects had  already been planned, but that proponents’ believed that Jobs Fund funding  had brought forward the timing of their projects and increased the scale and  types  of  activities  undertaken.  In  April  2013,  DEEWR  advised  ANAO  that:  ‘The evaluation of the Jobs and Training Compact is currently being finalised,  and is expected to be released mid 2013.’ 

Jobs Fund best practice and innovation evaluation

5.35 In  June  2011,  DEEWR  advised  the  Minister  for  Employment  Participation that it proposed to conduct an evaluation of an expanded sample  of  successful  projects  to  capture  examples  of  best  practice,  innovation  and  lessons learned that could be used in future employment and social inclusion  policy development. This approach was expected to complement the Compact  evaluation and provide a larger evidence base of Jobs Fund projects than was  possible  with  the  broader  evaluation  (which  the  department  advis ed  was  examining  28  projects  that  had  been  selected  on  the  basis  of  results  based  performance).  In  December  2011,  DEEWR  commissioned  an  external  consultant to undertake the evaluation, with terms of reference to identify: 

 innovative  ideas  or  processes  used  in  the  running  of  the  project,  including in achieving employment and training outcomes; 

 successful  financial  and  project  management  strategies  and  methodologies;  

 strategies for increasing the level of community awareness of, support  for and engagement with the project; and 

 social  enterprises  which  had  successful  strategies  for  engaging  with  relevant  stakeholders  and  keeping  the  enterprise  on‐going  and  financially viable. 

                                                       165 See further at paragraphs 5.39 to 5.57.

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5.36 The evaluation examined 23 Jobs Fund projects (10 LJ and 13 GCW)  which had been identified as success stories by the department. The evaluation  report,  finalised  in  March  2012,  was  prepared  in  two  volumes.  The  first  volume166 provided an overarching report drawing on the projects examined.  It did  not  set  out  an  overall  conclusion,  but  rather  presented  a  range  of  findings in relation to examples of innovation and successful strategies under  the following themes: factors in successful achievement of employment and  training  outcomes;  management  of  projects;  factors  for  success  in  social  enterprises;  managing  relationships;  and  innovation  in  Jobs  Fund  projects.  Under a final theme, the report identified a range of implications for the design  of future policies and programs including that: 

 programs that are relatively short‐term or time restricted, such as the  Jobs Fund (which the government was intending to use as a vehicle to  have  funds  spent  locally  and  quickly),  do  not  lend  themselves  comfortably to infrastructure projects which generally require a long  time‐frame  for  planning,  getting  appropriate  government  approvals,  tendering to sub‐contractors and obtaining tradesmen; 

 to  be  of  use,   work  experience  must  be  substantial  and  a  history  of  employment established; and the skills need to be transferable and in  demand. The evaluation found that short time frames militate against  this; 

 the  benefits  of  a  jobs  project  can  be  lost  if  there  is  no  ongoing  employment  in  that  location,  and  DEEWR  may  wish  to  consider  options for matching demand to employment availability; 

 the interest taken in a project by DEEWR LECs or Employment Project  Officers was often the difference in a project succeeding, and DEEWR  may  wish  to  consider  a  process  that  allows  greater  involvement  by  local officers who have in‐depth knowledge of the local conditions, the  project and its proponents; 

 project leaders felt that, as many of the participants were working for  the first time, a mentor or work counsellor would have been helpful  during  the  project  and  to  assist  participants  for  up  to  six  months 

                                                       166 Volume 1 of the report is available at http://foi.deewr.gov.au/node/7476 [accessed 28 March 2013].

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5.36 The evaluation examined 23 Jobs Fund projects (10 LJ and 13 GCW)  which had been identified as success stories by the department. The evaluation  report,  finalised  in  March  2012,  was  prepared  in  two  volumes.  The  first  volume166 provided an overarching report drawing on the projects examined.  It did  not  set  out  an  overall  conclusion,  but  rather  presented  a  range  of  findings in relation to examples of innovation and successful strategies under  the following themes: factors in successful achievement of employment and  training  outcomes;  management  of  projects;  factors  for  success  in  social  enterprises;  managing  relationships;  and  innovation  in  Jobs  Fund  projects.  Under a final theme, the report identified a range of implications for the design  of future policies and programs including that: 

 programs that are relatively short‐term or time restricted, such as the  Jobs Fund (which the government was intending to use as a vehicle to  have  funds  spent  locally  and  quickly),  do  not  lend  themselves  comfortably to infrastructure projects which generally require a long  time‐frame  for  planning,  getting  appropriate  government  approvals,  tendering to sub‐contractors and obtaining tradesmen; 

 to  be  of  use,   work  experience  must  be  substantial  and  a  history  of  employment established; and the skills need to be transferable and in  demand. The evaluation found that short time frames militate against  this; 

 the  benefits  of  a  jobs  project  can  be  lost  if  there  is  no  ongoing  employment  in  that  location,  and  DEEWR  may  wish  to  consider  options for matching demand to employment availability; 

 the interest taken in a project by DEEWR LECs or Employment Project  Officers was often the difference in a project succeeding, and DEEWR  may  wish  to  consider  a  process  that  allows  greater  involvement  by  local officers who have in‐depth knowledge of the local conditions, the  project and its proponents; 

 project leaders felt that, as many of the participants were working for  the first time, a mentor or work counsellor would have been helpful  during  the  project  and  to  assist  participants  for  up  to  six  months 

                                                       166 Volume 1 of the report is available at http://foi.deewr.gov.au/node/7476 [accessed 28 March 2013].

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afterwards. It was acknowledged that this raises operating costs, so is a  factor for success that needs a policy position; and 

 relationships  with  Job  Services  Australia  (JSA)  providers  across  the  projects  reviewed  was  variable.  The  evaluation  commented  that  DEEWR could make additional efforts to inform JSA providers about  new programs and lay out its expectations for their engagement.167 

5.37 The  second  volume  of  the  evaluation  report  comprised  the  23  case  study  reports  which  examined  the  objectives,  implementation  and  employment, training and other community outcomes of each project. The case  studies  were  conducted  through  examination  of  the  funding  agreement  reporting  provided  to  DEEWR  and  discussions  with  project  leaders,  other  stakeholders and, where still engaged in the projects, participants. The case  study reports discussed reasons for identified successes, as well as identified  issues or lessons that related to the design of future grant programs. 

5.38 As noted, the projects examined in the evaluation had been selected by  DEEWR  as  they  were  seen  as  having  been  successful  in  achieving  their  expected employment and community objectives. Combined with the broader  Compact  evaluation,  this  has  provided  DEEWR  with  a  good   body  of  information on which to base policy advice to government in relation to the  design of future grant programs that are seeking to promote employment and  skills development. A useful addition to that would have been consideration of  the  reasons  for  other  projects  not  proceeding  as  successfully  in  order  to  provide the equivalent lessons for future programs. 

Employment and training outcomes 5.39 A  key  factor  taken  into  consideration  by  the  ARC  in  determining  whether  projects  represented  value  for  money  was  both  the  number  and  nature of the employment or training opportunities that would be provided.  The expected outcomes were included in the relevant funding agreements as  milestone requirements to be achieved in order for the funding recipient to  receive the associated payment. This was a significant improvement over the  approach adopted in relation to the other components of the Local Jobs stream.  Neither  of  the  departments  responsible  for  administering  the  quarantined 

                                                       167 Department of Education, Employment and Workplace Relations, Report on best practice and innovation in successful Jobs Fund projects, March 2012, pp. 38-41.

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components  included  employment  outcomes  within  the  contracted  project  outcomes or milestone requirements.168 

5.40 Funding  recipients  were  required  to  report  on  the  jobs,  apprenticeships/traineeships and work experience positions provided by their  project.  Appendix  2  sets  out  the  reporting  required  of  funding  recipients,  including the definitions included in the funding agreement in relation to the  terms: full‐time and part‐time; short‐term and long‐term; created and retained;  and direct versus indirect jobs. These reporting requirements were set out in  annexures  to  each  funding  agreement  and  templates  provided  to  funding  recipients to complete in submitting the required reports. 

Achievement of timely and targeted employment stimulus

5.41 The 92 LJ projects were collectively originally contracted to result in the  creation  or  retention  of  some  3230  paid  employment  positions  (comprising  around 2500 short and long‐term jobs and 730 traineeships or apprenticeships),  and  some 1070  work  experience  placements. As  at  October  2012,  DEEWR’s  aggregated performance information indicated that the projects had resulted in  the creation or retention of 3819 paid positions (3145 short and long‐term jobs  and  674 traineeships/apprenticeships),  and  1600  work  experience  positions,  indicating  significant  over‐achievement  against  overall  expectations.  Individual  project  outcomes  varied  widely,  in  terms  of  both  under  and  over‐achievement. However, more t han half (51 projects, 55 per cent) of the  92 LJ projects  reported  that  they  had  achieved  paid  employment  outcomes  greater  than  those  originally  contracted;  and  72 (78  per  cent)  reported  over‐achievement in terms of unpaid work experience positions. 

5.42 In terms of the timeliness of employment stimulus, less than a third  (29 per cent) of positions had been reported to DEEWR as achieved by the end  of the first year of the Job Fund on 30 June 2010. While it can be expected that  this  would  incorporate  some  lag  between  positions  being  created  and  the  reporting  being  provided,  this  outcome  is  also  reflective  of  the  delays  experienced in first round projects achieving the necessary project readiness in  order to receive an initial grant instalment (see paragraphs 5.13 to 5.17).  

5.43 In  terms  of  the  achievement  of  targeted  employment  stimulus,  68 (74 per cent) of the 92 LJ projects were located in one of the 20 identified 

                                                       168 See ANAO Audit Report No.27 2011-12, op. cit., pp. 143-145 and ANAO Audit Report No.11 2012-13, op. cit., p.153.

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components  included  employment  outcomes  within  the  contracted  project  outcomes or milestone requirements.168 

5.40 Funding  recipients  were  required  to  report  on  the  jobs,  apprenticeships/traineeships and work experience positions provided by their  project.  Appendix  2  sets  out  the  reporting  required  of  funding  recipients,  including the definitions included in the funding agreement in relation to the  terms: full‐time and part‐time; short‐term and long‐term; created and retained;  and direct versus indirect jobs. These reporting requirements were set out in  annexures  to  each  funding  agreement  and  templates  provided  to  funding  recipients to complete in submitting the required reports. 

Achievement of timely and targeted employment stimulus

5.41 The 92 LJ projects were collectively originally contracted to result in the  creation  or  retention  of  some  3230  paid  employment  positions  (comprising  around 2500 short and long‐term jobs and 730 traineeships or apprenticeships),  and  some 1070  work  experience  placements. As  at  October  2012,  DEEWR’s  aggregated performance information indicated that the projects had resulted in  the creation or retention of 3819 paid positions (3145 short and long‐term jobs  and  674 traineeships/apprenticeships),  and  1600  work  experience  positions,  indicating  significant  over‐achievement  against  overall  expectations.  Individual  project  outcomes  varied  widely,  in  terms  of  both  under  and  over‐achievement. However, more t han half (51 projects, 55 per cent) of the  92 LJ projects  reported  that  they  had  achieved  paid  employment  outcomes  greater  than  those  originally  contracted;  and  72 (78  per  cent)  reported  over‐achievement in terms of unpaid work experience positions. 

5.42 In terms of the timeliness of employment stimulus, less than a third  (29 per cent) of positions had been reported to DEEWR as achieved by the end  of the first year of the Job Fund on 30 June 2010. While it can be expected that  this  would  incorporate  some  lag  between  positions  being  created  and  the  reporting  being  provided,  this  outcome  is  also  reflective  of  the  delays  experienced in first round projects achieving the necessary project readiness in  order to receive an initial grant instalment (see paragraphs 5.13 to 5.17).  

5.43 In  terms  of  the  achievement  of  targeted  employment  stimulus,  68 (74 per cent) of the 92 LJ projects were located in one of the 20 identified 

                                                       168 See ANAO Audit Report No.27 2011-12, op. cit., pp. 143-145 and ANAO Audit Report No.11 2012-13, op. cit., p.153.

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PEAs.  A  further  five  projects  (five  per  cent)  were  located  in  the  Victorian  bushfire  areas  also  prioritised  by  DEEWR.  Collectively,  those  projects  accounted for 81 per cent of contracted positions, and 86 per cent of reported  actual positions. 

5.44 In the reporting required of funding recipients, the department did not  generally seek to identify whether the individuals employed had been sourced  from local workers. Particularly for projects involving construction work, the  evidence provided by funding recipients to support reported jobs primarily  comprised  invoices  or  letters  from  contractors  identifying  the  number  of  workers involved. This did not include reference to where the workers had  been sourced from. In this respect, the draft Compact evaluation report noted  that discussions with funding recipients had identified that: 

Where Jobs Fund projects required skilled labour, project managers often had  to  go  beyond  their  local  community.  Construction  workers,  business  development  managers  and  project  coordinators  in  particular  were  more  difficult to find in some regions. This was particularly so in parts of Western  Australia,  and  to  a  lesser  extent,  South  Australia  and  Queensland,  where  skilled labour had often moved out to work in mining centres. Cases were also  reported  of  skilled  labour  being  tied  up  in  other  constructi on  projects,  including Building the Education Revolution projects.  

Jobs Fund projects that involved construction were often contracted out by the  proponent. Even when contracts were awarded to local businesses, contractors  were not obliged to source labour from the local area. This suggests that while  the Jobs Fund was directed at disadvantaged communities, this practice had  the  potential  to  reduce  part  of  the  financial  stimulus  and  employment  opportunities in the communities it was designed to benefit. 

Target groups of job seekers

5.45 Under  both  rounds  of  the  Jobs  Fund,  applicants  were  required  to  specify which target group of job seekers would be assisted by their project.  Based on the advice set out in applications, DEEWR maintained statistics in  relation  to  the  target  group(s)  each  funded  project  was  expected  to  assist,  including:  mature  age,  youth,  culturally  and  language  diverse,  long‐term  unemployed, ex‐offender, Indigenous, persons with a disability, homeless and  women.  

5.46 In  that  context,  as  part  of  the  broader  Compact  evaluation,  DEEWR  engaged  an  external  consultant  to  undertake  a  review  of  the  operation  of  five projects  directed  to  Indigenous  people  and  communities  (four  under  GCW and  one  LJ).  The  May  2011 review  report  found  that  all  five  projects 

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provided  employment  for  participants  and  noted  that,  based  on  reports  provided to DEEWR and visits by the reviewer, two of the five projects had  met all of their targets as at March 2011. Collectively, the projects had created  216 jobs against a target of 298 jobs, with the shortfall relating to longer term  jobs. Traineeships were well short of target, but this result had been largely  influenced by the outcomes for one project. The review further reported that,  in terms of more medium‐term outcomes: 

As the time of writing there were very mixed results on ongoing employment  participation ... The expectation is that only [one of the five projects reviewed] will  have a large group of continuing workers while most of the other projects will  rely on further government funding or external finance if the jobs are to be  retained. 

5.47 More broadly, other than by reference to the target group(s) a project  had  been  identified  as  relating  to,  DEEWR’s  aggregated  performance  information did not generally seek to specifically demonstrate the extent to  which  the  actual  participants  in  each  project  reflected  the  expected  target  group. On a project level, in some cases it was evident from the  nature of a  project  and  the  associated  reporting  as  to  whether  it  had  addressed  the  expected  target  group.  For  example,  where  the  project  involved  work  placement jobs or traineeships for certain types of job seekers that were to be  sourced through JSA providers. In this respect, DEEWR provided advice to  funding recipients where  it was apparent they were not aware of available  services through which to source suitable participants. However, both the draft  Compact  evaluation  and  the  evaluation  on  best  practice  and  innovation  in  successful  Jobs  Fund  projects  highlighted  that  funding  recipients  had  experienced difficulties with JSA providers not supplying suitable candidates.  

5.48 As noted at paragraph 5.33, the draft Compact evaluation report noted  that one of the factors that had limited the extent to which the Jobs Fund’s  contribution could be analysed was that information was largely restricted to  qualitative data. The draft report further noted that: 

The  reporting  of  employment  outcomes  without  a  customised  information  management system was a limitation on the analysis. It was not possible to  further  disaggregate  the  data  on  reported  jobs  to  adequately  address  the  evaluation’s research questions. Furthermore, job seekers registered as looking  for work in employment services were not able to be identified  from other Jobs  Fund  participants,  thereby  limiting  the  extent  to  which  target  populations  could be identified. This also limited the extent to which the evaluation could  measure  whether  Jobs  Fund  projects  influenced  disadvantaged  participant 

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provided  employment  for  participants  and  noted  that,  based  on  reports  provided to DEEWR and visits by the reviewer, two of the five projects had  met all of their targets as at March 2011. Collectively, the projects had created  216 jobs against a target of 298 jobs, with the shortfall relating to longer term  jobs. Traineeships were well short of target, but this result had been largely  influenced by the outcomes for one project. The review further reported that,  in terms of more medium‐term outcomes: 

As the time of writing there were very mixed results on ongoing employment  participation ... The expectation is that only [one of the five projects reviewed] will  have a large group of continuing workers while most of the other projects will  rely on further government funding or external finance if the jobs are to be  retained. 

5.47 More broadly, other than by reference to the target group(s) a project  had  been  identified  as  relating  to,  DEEWR’s  aggregated  performance  information did not generally seek to specifically demonstrate the extent to  which  the  actual  participants  in  each  project  reflected  the  expected  target  group. On a project level, in some cases it was evident from the  nature of a  project  and  the  associated  reporting  as  to  whether  it  had  addressed  the  expected  target  group.  For  example,  where  the  project  involved  work  placement jobs or traineeships for certain types of job seekers that were to be  sourced through JSA providers. In this respect, DEEWR provided advice to  funding recipients where it was apparent they were not aware of available  services through which to source suitable participants. However, both the draft  Compact  evaluation  and  the  evaluation  on  best  practice  and  innovation  in  successful  Jobs  Fund  projects  highlighted  that  funding  recipients  had  experienced difficulties with JSA providers not supplying suitable candidates.  

5.48 As noted at paragraph 5.33, the draft Compact evaluation report noted  that one of the factors that had limited the extent to which the Jobs Fund’s  contribution could be analysed was that information was largely restricted to  qualitative data. The draft report further noted that: 

The  reporting  of  employment  outcomes  without  a  customised  information  management system was a limitation on the analysis. It was not possible to  further  disaggregate  the  data  on  reported  jobs  to  adequately  address  the 

evaluation’s research questions. Furthermore, job seekers registered as looking  for work in employment services were not able to be identified  from other Jobs  Fund  participants,  thereby  limiting  the  extent  to  which  target  populations  could be identified. This also limited the extent to which the evaluation could  measure  whether  Jobs  Fund  projects  influenced  disadvantaged  participant 

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employment  and  training  outcomes.  The  short  timeframe  for  analysis  also  meant  longer‐term  outcomes,  such  as  project  sustainability  beyond  the  funding period, could not be measured. 

Comparability of reported outcomes

5.49 The  funding  agreements  required  funding  recipients  to  provide  evidence  supporting  the  employment  and  training  outcomes  reported  for  comparison with the contracted outcomes.  

Equivalency of expectations and outcomes

5.50 A  key  requirement  for  reliable  measurement  of  achievement  against  expectation  is  that  both  measures  have  been  compiled  on  the  same  basis.  The employment  outcomes  included  in  funding  agreements  were,  for  the  majority of projects, a reflection of the estimated positions identified in the  relevant application. For most projects, there is no means of demonstrating that  the number of jobs and other positions proposed by funding recipients in their  application (or in negotiating funding agreements) had been estimated on the  same  basis  DEEWR  subsequently  applied  in  counting  actual  positions  for  inclusion in project and program performance measures.169 

5.51 The employment outcomes for each project were monitored against the  contracted  requirements  on  the  basis  of  the  number  of  short‐term  jobs,  long‐term  jobs,  traineeships/apprenticeships  and  work  experience  positions  reported  by  the  funding  recipient.  The  positions  reported  in  each  category  were aggregated within a project, and across the prog ram. In that context, an  underlying  premise  for  aggregating  reported  outcomes  should  be  that  each  position  is  of  the  same  value  in  terms  of  demonstrating  the  program’s  contribution to creating employment opportunities that would not otherwise  have been available to the participants. However, the available evidence is that  this was not the case.  

                                                       169 For example, in one case the application had claimed a project to upgrade a building would create in excess of 20 short term jobs and retain over 40 long term jobs. In the assessment process, the ARC had only taken into account the

20 short-term jobs on the basis the proposed 40 long-term jobs had not been substantiated. The announced employment outcomes for the project reflected the ARC’s deliberations. However, the funding agreement as originally drafted reverted to the outcomes set out in the application. The funding recipient advised DEEWR that it had spoken with the contractors involved in the project and adjusted the job numbers accordingly, which provided for considerably different outcomes of 11 short term and 16 long term jobs. Advice as to the nature of those expected jobs or how they had been determined was not sought by DEWR prior to including them in the funding agreement subsequently executed. The achieved outcomes for this project included in DEEWR’s performance information of 43 jobs, three apprenticeships and one work experience position related to the various tradespeople involved in undertaking the work. This included part time office staff and the owner of the pest controller, and flooring personnel who worked on the project for around one day.

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5.52 The reporting required from funding recipients included information  on whether positions were not just short‐term or long‐term, but also whether  they  were  part‐time  or  full‐time  (as  set  out  in  Appendix  2).  However,  the  department did not utilise that information or otherwise seek to translate the  diverse  range  of  employment  outcomes  into  a  comparable  basis  for  aggregating reported positions within and across projects, such as through the  use of a full‐time equivalent (FTE) measure. Instead, all personnel reported as  being involved in a project in some way were counted on a one for one basis,  regardless of their duration or extent of involvement.  

5.53 This was reflected in advice DEEWR provided to the then DEWHA in  September  2010.  Specifically,  in  response  to  a  query  from  that  department,  DEEWR advised that it did not have a formula for converting hours worked  into a calculation of the number of jobs involved. DEEWR advised that this  was because the approach it had adopted was to count the number of jobs  produced  by  each  project  (which  may  have  been  for  a  day,  a  week  or  long‐term), with the only differentiation made in reporting relating to whether  positions represented

 jobs, work experience or apprenticeship positions.170 

Nature of engagement in the project by reported participants

5.54 The reported positions aggregated as representing the actual outcomes  from completed LJ projects included positions that had clearly been created as  a  direct  result  of  the  funded  project,  including  cases  where  the  achieved  outcomes  exceeded  those  expected.  For example,  one  LJ project  was  to  establish  a  self‐sustaining  business  to  provide  a  pathway  for  placement  of  unemployed youth into long‐term jobs. The funding agreement requirements  included the engagement in four groups of 40 unemployed youth with low  skills in work placement trainee positions, as short term jobs created by the  project.  At  the  conclusion  of  each  group’s  work  placement,  the  funding  agreement required evidence of at least six trainees being placed in long‐term  jobs with other employers (a total of 24). The final reporting by the funding  recipient identified that it had overachieved in both aspects. 

5.55 However, for a number of projects, the majority of participants were  subcontracted tradesmen, service providers and incidental support staff who  were not engaged on the project either full‐time or for an extended period.  This approach runs a significant risk of overstating the employment stimulus 

                                                       170 See ANAO Audit Report No.11 2012-13, op. cit., p.155.

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5.52 The reporting required from funding recipients included information  on whether positions were not just short‐term or long‐term, but also whether  they  were  part‐time  or  full‐time  (as  set  out  in  Appendix  2).  However,  the  department did not utilise that information or otherwise seek to translate the  diverse  range  of  employment  outcomes  into  a  comparable  basis  for  aggregating reported positions within and across projects, such as through the  use of a full‐time equivalent (FTE) measure. Instead, all personnel reported as  being involved in a project in some way were counted on a one for one basis,  regardless of their duration or extent of involvement.  

5.53 This was reflected in advice DEEWR provided to the then DEWHA in  September  2010.  Specifically,  in  response  to  a  query  from  that  department,  DEEWR advised that it did not have a formula for converting hours worked  into a calculation of the number of jobs involved. DEEWR advised that this  was because the approach it had adopted was to count the number of jobs  produced  by  each  project  (which  may  have  been  for  a  day,  a  week  or  long‐term), with the only differentiation made in reporting relating to whether  positions represented

 jobs, work experience or apprenticeship positions.170 

Nature of engagement in the project by reported participants

5.54 The reported positions aggregated as representing the actual outcomes  from completed LJ projects included positions that had clearly been created as  a  direct  result  of  the  funded  project,  including  cases  where  the  achieved  outcomes  exceeded  those  expected.  For example,  one  LJ project  was  to  establish  a  self‐sustaining  business  to  provide  a  pathway  for  placement  of  unemployed youth into long‐term jobs. The funding agreement requirements  included the engagement in four groups of 40 unemployed youth with low  skills in work placement trainee positions, as short term jobs created by the  project.  At  the  conclusion  of  each  group’s  work  placement,  the  funding  agreement required evidence of at least six trainees being placed in long‐term  jobs with other employers (a total of 24). The final reporting by the funding  recipient identified that it had overachieved in both aspects. 

5.55 However, for a number of projects, the majority of participants were  subcontracted tradesmen, service providers and incidental support staff who  were not engaged on the project either full‐time or for an extended period.  This approach runs a significant risk of overstating the employment stimulus 

                                                       170 See ANAO Audit Report No.11 2012-13, op. cit., p.155.

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that was directly attributable to the funded projects. For example, the actual  ‘jobs’ included in DEEWR’s performance information as having been created  or retained as a direct result of the funded project included examples such as: 

 one job for which the supporting evidence was an invoice for $600 from  a construction firm; 

 three  permanent  employees  of  a  local  council  proponent,  whom  the  council estimated had each been involved in oversighting the project  for between one and five hours a week, including the manager of the  council’s multi‐level car parks which were the subject of the relevant  project. There is no evidence that any of these positions had been at risk  of not being retained in the absence of this project being funded; and 

 eight staff (one full‐time and seven part‐time) of a firm contracted to  manufacture  jerseys  for  a  completed  project’s  opening  ceremony.  The funding  recipient  advised  DEEWR  that  the  hours  each  staff  member had spent undertaking relevant work was unknown, with the  email from the firm relied on in counting those staff as eight short‐term  jobs  retained  or  created  as  a  result  of  the  project  advising  that  the  employee count include d ‘supplier resourcing.’ 

5.56 A similar issue arises in terms of the aggregated reporting of achieved  traineeships  and  apprenticeships.  The  reported  positions  for  this  category  include traineeships that were directly created as part of the relevant project’s  implementation plan, with evidence of the participants being employed and  enrolled in relevant courses in the course of the project having been provided  to DEEWR. However, it also includes apprentices included in the workforce  used  by  their  employing  subcontractor  in  undertaking  a  short‐term  construction job. For many of those reported positions, the involvement of the  apprentices is an indicator of the project’s general contribution to economic  activity, but there is no evidence that the employer either took on or retained  the relevant apprentices on the basis of having gained that particular piece of  work. 

5.57 Other  areas  in  which  the  employment  outcomes  included  in  the  department’s performance information should be treated with caution include: 

 the  inclusion  of  prospective  indirect  jobs  as  achieved  jobs  at  the  completion  of  the  project.  For  example,  one  project  was  funded  to  redevelop  a  community  centre  that  provides  certificate  education  courses. The employment outcomes included in DEEWR’s performance 

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information for that project included as 20 long‐term ‘jobs’ created by  the project an expectation that, based on past placement rates advised  by  the  funding  recipient,  at  least  20  future  graduates  of  childcare  certificate  courses  (who  were  yet  to  be  enrolled  at  the  centre)  will  achieve a job in that industry with an unknown employer;  

 the extent to which a position created by a project should be identified  on an FTE basis (thereby accounting for instances where two or more  individuals occupied the same position in the course of the project), or  by  counting  each  individual  who  occupies  the  same  position  as  representing a separate job created by the project; and 

 the  inclusion  of  professionals,  such  as  architects,  engineers,  land  surveyors  and  geotechnical  inspectors,  that  provided  services  to  a  project as jobs that had been created or retained as a direct result of the  project.  In  no  case  did  DEEWR  seek  to  establish  that  the  relevant  professional’s on‐going employment had been at risk in the absence of  being engaged on the project, or that the professional was otherwise  unemployed prior to being engaged to provide services  to the project. 

Conclusion 5.58 Through financial stimulus, the primary objective of the Jobs Fund was  to  support  and  create  jobs  and  employment  opportunities  in  communities  affected  by  the  global  recession  and  for  disadvantaged  job  seekers.  For  the  LJ stream, this was to be achieved through projects focussed on also providing  community and environmental benefits. In this respect, expected employment  and  training  outcomes  were  included  in  funding  agreements  as  milestone  requirements to be achieved in order for the funding recipient to receive the  associated payment. This was a significant improvement over the approach  adopted in relation to the other components of the Local Jobs stream.171 

5.59 DEEWR’s administration of the 92 contracted LJ stream projects was  effective  in  terms  of  aligning  the  payment  of  grant  funds  with  the  demonstrated achievement of project milestones and outcomes. This included  a  prudent  risk  management  approach  to  structuring  contracted  grant  payments.  DEEWR  actively  monitored  project  progress  and,  where  projects 

                                                       171 Neither of the departments responsible for administering the quarantined components included employment outcomes within the contracted project outcomes or milestone requirements (see ANAO Audit Report No.27 2011-12, op. cit.,

pp. 143-145 and ANAO Audit Report No.11 2012-13, op. cit., p.153).

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information for that project included as 20 long‐term ‘jobs’ created by  the project an expectation that, based on past placement rates advised  by  the  funding  recipient,  at  least  20  future  graduates  of  childcare  certificate  courses  (who  were  yet  to  be  enrolled  at  the  centre)  will  achieve a job in that industry with an unknown employer;  

 the extent to which a position created by a project should be identified  on an FTE basis (thereby accounting for instances where two or more  individuals occupied the same position in the course of the project), or  by  counting  each  individual  who  occupies  the  same  position  as  representing a separate job created by the project; and 

 the  inclusion  of  professionals,  such  as  architects,  engineers,  land  surveyors  and  geotechnical  inspectors,  that  provided  services  to  a  project as jobs that had been created or retained as a direct result of the  project.  In  no  case  did  DEEWR  seek  to  establish  that  the  relevant  professional’s on‐going employment had been at risk in the absence of  being engaged on the project, or that the professional was otherwise  unemployed prior to being engaged to provide services  to the project. 

Conclusion 5.58 Through financial stimulus, the primary objective of the Jobs Fund was  to  support  and  create  jobs  and  employment  opportunities  in  communities  affected  by  the  global  recession  and  for  disadvantaged  job  seekers.  For  the  LJ stream, this was to be achieved through projects focussed on also providing  community and environmental benefits. In this respect, expected employment  and  training  outcomes  were  included  in  funding  agreements  as  milestone  requirements to be achieved in order for the funding recipient to receive the  associated payment. This was a significant improvement over the approach  adopted in relation to the other components of the Local Jobs stream.171 

5.59 DEEWR’s administration of the 92 contracted LJ stream projects was  effective  in  terms  of  aligning  the  payment  of  grant  funds  with  the  demonstrated achievement of project milestones and outcomes. This included  a  prudent  risk  management  approach  to  structuring  contracted  grant  payments.  DEEWR  actively  monitored  project  progress  and,  where  projects 

                                                       171 Neither of the departments responsible for administering the quarantined components included employment outcomes within the contracted project outcomes or milestone requirements (see ANAO Audit Report No.27 2011-12, op. cit.,

pp. 143-145 and ANAO Audit Report No.11 2012-13, op. cit., p.153).

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experienced  significant  delays,  generally  took  proactive  steps  to  develop  remedial strategies that would assist in maximising the delivery of the project  within the required timeframe, while appropriately managing risk. 

5.60 The establishment of funding agreements for a number of the 64 first  round  projects  approved  in  August  2009  and  the  seven  bike  path  projects  approved in January 2010 was somewhat delayed. Further, as a consequence of  projects’  inability  to  progress  at  the  rate  anticipated  (despite  having  been  approved on the basis they met the requirement to be ready to start), program  expenditure  was  delayed  compared  to  the  expectations  established  by  the  92 funding  agreements.  By  the  end  of  March  2010  (12 months  after  the  Jobs Fund  was  agreed  to  as  a  measure  to  provide  immediate  employment  stimulus, and more than seven months after the first round selection process  had  been  completed),  actual  payments  totalled  $12.2 million.  This  fell  $9.8 million (45 per cent) short of the $22 million contracted to have been paid  from  September  2009  (when  funding  agreements  were  first  signed)  to  31 March 2010.  

5.61 A  number  of  projects  subsequently  experienced  further  delays  in  m eeting contracted project milestones, with this being reflected in the rate at  which further payments were able to be made. There was a strong focus on the  need to effectively manage outstanding projects in the lead up to the budgeted  program end‐date of 30 June 2011 which was largely successful in enabling  projects to be finalised to the department’s satisfaction by that time. However,  in March 2011, the end‐date for the Jobs Fund was extended from 30 June 2011  to 30 June 2012 to allow for completion of projects disrupted by floods and  other delays, in order to enable the expected community benefits to come to  fruition. Funding of $14.5 million was moved into the 2011-12 financial year,  including  $1.43 million  for  five  LJ projects  (five  per  cent  of  contracted  LJ projects). The last payment for those five projects was made in June 2012. 

5.62 DEEWR has undertaken a range of evaluation activities in relation to  the Jobs Fund and the broader Jobs and Training Compact. In this respect, the  available evidence is that projects funded under the general component of the  LJ  stream  contributed  to  the  provision  of  employment  and  training  opportunities  in  areas  affected  by  the   economic  downturn,  and  to  the  availability of community and environmentally‐friendly facilities and services.  

5.63 More than half (51 projects, 55 per cent) of the 92 LJ projects reported  that  they  had  achieved  paid  employment  outcomes  greater  than  those  originally contracted; and 72 (78 per cent) reported over‐achievement in terms 

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of unpaid work experience positions. However, reflecting the project delays  that affected the rate of program expenditure, less than a third (29 per cent) of  positions had been reported to DEEWR as achieved by the end of the first year  of the Jobs Fund on 30 June 2010. 

In  addition,  aspects  of  the  methodology  adopted  for  identifying  the  actual  employment  and  training  outcomes  of  each  project  indicate  that  DEEWR’s  performance information for individual projects, and the program as a whole,  needs to be treated with some caution as a reliable measure of the employment  stimulus directly generated by funded projects. This particularly relates to the  comparability  of  the  bases  on  which  expected  and  actual  outcomes  were  measured, and the extent to which reported positions reflect a contribution to  general economic activity rather than direct employment outcomes. In terms of  the  achievement  of  targeted  employment  stimulus,  68 (74 per  cent)  of  the  92 LJ projects  were  located  in  one  of  the  20 identified  PEAs.  A  further  five projects (five per cent) were located in the Victorian bushfire areas also  prioritised by DEEWR. Collectively, those projects accounted for 81  per cent of  contracted positions, and 86 per cent of reported actual positions. However,  there is not a reliable measure of the extent to which the participants engaged  in the reported positions had been drawn from the targeted areas and groups  of job seekers. 

 

Ian McPhee 

Auditor‐General 

Canberra ACT 

12 June 2013 

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of unpaid work experience positions. However, reflecting the project delays  that affected the rate of program expenditure, less than a third (29 per cent) of  positions had been reported to DEEWR as achieved by the end of the first year  of the Jobs Fund on 30 June 2010. 

In  addition,  aspects  of  the  methodology  adopted  for  identifying  the  actual  employment  and  training  outcomes  of  each  project  indicate  that  DEEWR’s  performance information for individual projects, and the program as a whole,  needs to be treated with some caution as a reliable measure of the employment  stimulus directly generated by funded projects. This particularly relates to the  comparability  of  the  bases  on  which  expected  and  actual  outcomes  were  measured, and the extent to which reported positions reflect a contribution to  general economic activity rather than direct employment outcomes. In terms of  the  achievement  of  targeted  employment  stimulus,  68 (74 per  cent)  of  the  92 LJ projects  were  located  in  one  of  the  20 identified  PEAs.  A  further  five projects (five per cent) were located in the Victorian bushfire areas also  prioritised by DEEWR. Collectively, those projects accounted for 81 per cent of  contracted positions, and 86 per cent of reported actual p ositions. However,  there is not a reliable measure of the extent to which the participants engaged  in the reported positions had been drawn from the targeted areas and groups  of job seekers. 

 

Ian McPhee 

Auditor‐General 

Canberra ACT 

12 June 2013 

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Appendices

ANAO Audit Report No.43 2012-13 Establishment, Implementation and Administration of the General Component of the Local Jobs Stream of the Jobs Fund

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Appendix 1: Program funding for the Jobs Fund streams administered by DEEWR

Local Jobs

($m)

Get Communities Working ($m) Total ($m)

Original funding: 2009-10 Budget

Available for grants 193.0 193.0 386.0

Allocation of Jobs Fund funding:

Grants approved through open submission process:

Temporary Financial Assistance (June 2009) 0.0 11.0 11.0

Round 1 (August 2009) 50.1 82.2 132.3

Supplementary Round 1-bike path projects reallocating funding from project withdrawals (January 2010) 1.7 (2.1) (0.4)

Round 2 (March 2010) 17.5 21.5 39.0

Total approved grants 69.3 112.6 181.9

Re-allocations to other initiatives:

Apprentice Kickstart package 66.1 28.4 94.5

Delivery of Job Expos and financial information seminars in Priority Employment Areas by Centrelink 0.0 4.1 4.1

Five youth centres in priority employment regions 10.0 0.0 10.0

Insulation Workers Adjustment Fund and Insulation Employment Coordinators 11.5 0.0 11.5

Social Enterprise Development and Investment Fund (SEDIF) 0.0 20.0 20.0

Victorian bushfire recovery 11.0 4.4 15.4

Total reallocated funding 98.6 56.9 155.5

Savings in 2010-11 Budget 24.7 23.9 48.6

Other adjustments and rounding errors 0.4 (0.4) 0.0

Total 193.0 193.0 386.0

Source: ANAO analysis of DEEWR records and Portfolio Budget Statements.

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Appendix 1: Program funding for the Jobs Fund streams administered by DEEWR

Local Jobs

($m)

Get Communities Working ($m) Total ($m)

Original funding: 2009-10 Budget

Available for grants 193.0 193.0 386.0

Allocation of Jobs Fund funding:

Grants approved through open submission process:

Temporary Financial Assistance (June 2009) 0.0 11.0 11.0

Round 1 (August 2009) 50.1 82.2 132.3

Supplementary Round 1-bike path projects reallocating funding from project withdrawals (January 2010) 1.7 (2.1) (0.4)

Round 2 (March 2010) 17.5 21.5 39.0

Total approved grants 69.3 112.6 181.9

Re-allocations to other initiatives:

Apprentice Kickstart package 66.1 28.4 94.5

Delivery of Job Expos and financial information seminars in Priority Employment Areas by Centrelink 0.0 4.1 4.1

Five youth centres in priority employment regions 10.0 0.0 10.0

Insulation Workers Adjustment Fund and Insulation Employment Coordinators 11.5 0.0 11.5

Social Enterprise Development and Investment Fund (SEDIF) 0.0 20.0 20.0

Victorian bushfire recovery 11.0 4.4 15.4

Total reallocated funding 98.6 56.9 155.5

Savings in 2010-11 Budget 24.7 23.9 48.6

Other adjustments and rounding errors 0.4 (0.4) 0.0

Total 193.0 193.0 386.0

Source: ANAO analysis of DEEWR records and Portfolio Budget Statements.

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Appendix 2: Employment outcomes reporting required of DEEWR Jobs Fund funding recipients

Period covered Type of employment outcome to be reported

Milestone progress reports:

For the period from the date of the funding agreement to the current milestone due date.

Total number of jobs on payroll for the project. Reported jobs on the payroll were to be further identified as:

 full-time jobs (employment of 35 hours or more a week) or part-time jobs (employment of less than 35 hours a week);

 short-term jobs (a duration of six months or less) or long-term jobs (a duration of longer than six months); and

 whether the job had been:

 retained as a result of the project (defined as employment in the project by the funding recipient or its agents or subcontractors of a person who was employed by those parties prior to the date of the funding agreement and continued to be in employment with those parties); or

 created as a result of the project (defined as employment in the project of a person who was not in employment prior to the date of the funding agreement).

Total number of apprenticeships and traineeships provided by the project

Total number of work experience positions provided by the project.

Final report upon completion of the project:

Entire project period

Number of direct positions created or retained1 by the project, being positions whose wages were funded directly by the Jobs Fund. Direct jobs were to be categorised as either full-time or part-time employment; and short-term or long-term jobs. Apprenticeships, Work Experience and Volunteer Work were also to be reported, also under the categories of short-term jobs or long-term jobs.

2

Number of indirect jobs, being jobs not funded directly by the Jobs Fund, but created or retained as a result of the project. Indirect jobs were to be categorised as either full-time or part-time employment; and short-term or long-term jobs.

Notes:

1. The final report provided by funding recipients was not required to differentiate between jobs that had been created by the project and those that had been retained as a result of the project being funded.

2. Although the reporting template required the final report to account for both apprenticeships and work experience positions under the columns ‘short-term jobs’ and ‘long-term jobs’, the funding agreement separately defined both of those latter terms as excluding work experience positions.

Source: ANAO analysis of funding agreements used for projects funded through the two rounds of the general component of the Local Jobs stream of the Jobs Fund administered by DEEWR.

 

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Index

B

Bike paths component of the Local Jobs  stream ........................ 30, 31, 36, 86-89 

D

Demonstrating relative merit of  competing applications  consideration of geographic  distribution .. 65-71, 79-82, 110-16, 

121-23  first funding round ........ 64-82, 84-86  prioritising applications for funding  consideration ............. 65-71, 79-82  second funding round ............ 93-124  value for money, overall merit ..... 42, 

61-65, 76-79, 94-96, 99, 103, 115,  117-24  Department of Infrastructure,  Transport, Regional Development 

and Local Government 30, 41, 86-89,  128, 129  Department of the Environment,  Water, Heritage and the Arts .. 30, 41, 

49, 52, 83, 129, 146 

E

Employment and training outcomes132  measuring outcomes . 138-39, 141-48  Evaluation and reporting  Jobs and Training Compact 

evaluation ............... 136-39, 143-45  Jobs Fund evaluation ...... 139-41, 144 

H

Heritage component of the Local Jobs  stream .....   20, 30, 31, 36, 49, 51-52, 82,  83, 129 

I

Infrastructure Employment Projects  stream 20, 28, 30, 33, 35, 36, 48, 50-51,  82, 83, 85, 86, 129, 136 

J

Jobs and Training Compact .. 29, 136-39 

L

Local Employment Coordinators 29, 52,  96-98, 99, 100, 101, 103, 112, 113, 114,  140 

N

Nation Building and Jobs Plan ........... 28 

P

Priority Employment Areas ... 29-30, 32,  63, 64, 65-71, 79-82, 97, 1 03-4, 110,  111, 112, 113-16, 138, 143  Probity ....... 37, 38-40, 48, 84, 86, 88, 115  Procedural departures 38-40, 46-52, 53, 

55-57, 101  supplementary assessment  processes ................................. 83-89 

Program extension ......... 35, 134, 135-36 

R

Re‐targeting of the Jobs Fund 32-34, 93,  136  Keep Australia Working reports .......   32-34, 70, 84 

 

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Index

B

Bike paths component of the Local Jobs  stream ........................ 30, 31, 36, 86-89 

D

Demonstrating relative merit of  competing applications  consideration of geographic  distribution .. 65-71, 79-82, 110-16, 

121-23  first funding round ........ 64-82, 84-86  prioritising applications for funding  consideration ............. 65-71, 79-82  second funding round ............ 93-124  value for money, overall merit ..... 42, 

61-65, 76-79, 94-96, 99, 103, 115,  117-24  Department of Infrastructure,  Transport, Regional Development 

and Local Government 30, 41, 86-89,  128, 129  Department of the Environment,  Water, Heritage and the Arts .. 30, 41, 

49, 52, 83, 129, 146 

E

Employment and training outcomes132  measuring outcomes . 138-39, 141-48  Evaluation and reporting  Jobs and Training Compact 

evaluation ............... 136-39, 143-45  Jobs Fund evaluation ...... 139-41, 144 

H

Heritage component of the Local Jobs  stream .....   20, 30, 31, 36, 49, 51-52, 82,  83, 129 

I

Infrastructure Employment Projects  stream 20, 28, 30, 33, 35, 36, 48, 50-51,  82, 83, 85, 86, 129, 136 

J

Jobs and Training Compact .. 29, 136-39 

L

Local Employment Coordinators 29, 52,  96-98, 99, 100, 101, 103, 112, 113, 114,  140 

N

Nation Building and Job s Plan ........... 28 

P

Priority Employment Areas ... 29-30, 32,  63, 64, 65-71, 79-82, 97, 103-4, 110,  111, 112, 113-16, 138, 143  Probity ....... 37, 38-40, 48, 84, 86, 88, 115  Procedural departures 38-40, 46-52, 53, 

55-57, 101  supplementary assessment  processes ................................. 83-89 

Program extension ......... 35, 134, 135-36 

R

Re‐targeting of the Jobs Fund 32-34, 93,  136  Keep Australia Working reports .......   32-34, 70, 84 

 

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Series Titles

ANAO Audit Report No.1 2012-13  Administration of the Renewable Energy Demonstration Program  Department of Resources, Energy and Tourism 

ANAO Audit Report No.2 2012-13  Administration of the Regional Backbone Blackspots Program  Department of Broadband, Communications and the Digital Economy 

ANAO Audit Report No.3 2012-13  The Design and Conduct of the First Application Round for the Regional Development  Australia Fund  Department of Regional Australia, Local Government, Arts and Sport 

ANAO Audit Report No.4 2012-13  Confidentiality in Government Contracts: Senate Order for Departmental and Agency  Contracts (Calendar Year 2011 Compliance)  Across Agencies 

ANAO Audit Report No.5 2012-13  Management of Australia’s Air Combat Capability—F/A‐18 Hornet and Super  Hornet Fleet Upgrades and Sustainment  Department of Defence  Defence Materiel Organisation 

ANAO Audit Report No.6 2012-13  Management of Australia’s Air Combat Capability—F‐35A Joint Strike Fighter  Acquisition   Department of Defence  Defence Materiel Organisation 

ANAO Audit Report No.7 2012-13  Improving Access to Child Care—the Community Support Program  Department of Education, Employment and Workplace Relations 

ANAO Audit Report No.8 2012-13  Australian Government Coordination Arrangements for Indigenous Programs  Department of Families, Housing, Community Services and Indigenous Affairs 

ANAO Audit Report No.43 2012-13 Establishment, Implementation and Administration of the General Component of the Local Jobs Stream of the Jobs Fund

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ANAO Audit Report No.9 2012-13  Delivery of Bereavement and Family Support Services through the Defence  Community Organisation  Department of Defence  Department of Veterans’ Affairs 

ANAO Audit Report No.10 2012-13  Managing Aged Care Complaints  Department of Health and Ageing 

ANAO Audit Report No.11 2012-13  Establishment, Implementation and Administration of the Quarantined Heritage  Component of the Local Jobs Stream of the Jobs Fund  Department of Sustainability, Environment, Water, Population and  Communities 

ANAO Audit Report No.12 2012-13  Administration of Commonwealth Responsibilities under the National Partnership  Agreement on Preventive Health  Australian National Preventive Health Agency  Department of Health and Ageing 

ANAO Audit Report No.13 2012-13  The Provision of Policing Services to the Australian Capital Territory  Australian Federal Police 

ANAO Audit Report No.14 2012-13  Delivery of Workplace Relations Services by the Office of the Fair Work Ombudsman  Department of Education, Employment and Workplace Relations  Office of the Fair Work Ombudsman 

ANAO Audit Report No.15 2012-13  2011-12 Major Projects Report   Defence Materiel Organisation 

ANAO Audit Report No.16 2012-13  Audits of the Financial Statements of Australian Government Entities for the Period  Ended 30 June 2011  Across Agencies 

ANAO Audit Report No.43 2012-13 Establishment, Implementation and Administration of the General Component of the Local Jobs Stream of the Jobs Fund

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ANAO Audit Report No.9 2012-13  Delivery of Bereavement and Family Support Services through the Defence  Commun