A dozen NSW water authorities have granted their board members, staff and relatives more than $3.4 million in funding, sparking a state government investigation.
Internal documents obtained by The Sun-Herald show that 12 out of the 13 NSW catchment management authorities have granted 93 funding incentives to 66 board members, staff and family members from 2005 to last year.
The documents show funding from the authorities, which manage natural resources at a local level, went to initiatives including sustainable farming, fencing, grassland conservation and grazing management.
The Minister for Primary Industries, Katrina Hodgkinson, ordered an inquiry into Catchment Management Authorities, citing concerns of bias and potential conflicts of interest.
''This is a questionable outcome,'' she said. ''The appropriate management of public funding is a public interest priority and an absolute for good government.''
Tony Thompson, a board member from the western Catchment Management Authority, received nine grants totalling more than $750,000, while the wife of a board member for the central west authority received about $2000 for ''catering for a large meeting in a remote location''.
Mr Thompson said he was initially concerned about issues of bias when he joined the board in 2007, as he had already received four grants. ''I definitely declared a conflict of interest,'' he said.
The chairman of the western authority, Rory Treweeke, said it would be unfair if his board members could not apply for the grants, some of which could last up to 15 years, saying the process was hands-off.
''Given the area we are working in, it would be actually inequitable to prevent board members applying from the same programs that their neighbours could,'' he said. ''I don't believe there is any nepotism.''
Mr Treweeke received a grant of $7374 for works to improve sustainability. In total, the catchment, located in the state's north-west, gave $1,181,910 worth of grants to their board and staff members, which were granted by an ''independent panel'', Mr Treweeke said.
The western authority has no plans to exempt board or staff members from grants, Mr Treweeke said.
The general manager of the Murray authority in the state's south-west, David Leslie, said he ''welcomed'' the government's investigation. From 2008 to 2010, Mr Leslie authorised four grants to a staff member's partner totalling $104,475.54.
''The conflict of interest was declared and the staff member was removed from the project,'' Mr Leslie said. The female staff member's partner received the grants for conservation and fencing for flood damaged areas.
But last year, the general manager of Namoi authority, in north-west NSW, decided not to allow board or staff members to take part in their programs. In 2007, they issued two grants to staff members totalling $114,427.
'The general manager wanted to remove any perception of favouritism in the granting process,'' Anne Ferguson, a spokeswoman for the catchment, said.
The Sydney metropolitan authority is the only catchment that has not given any staff members grants.
Tom Gavel, the chairman of the Central West authority and spokesman for Catchment Management Authorities, said he was confident the investigation would be a ''straightforward process''.