ANALYSIS
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Sports Australia did not cover itself with glory at Thursday's hearing into the sports grants controversy, where its evidence suggested that it became stuck in a kind of tin-eared feedback loop, asking the minister what she wanted before recommending just that.
The organisation did raise the red flag more than once as Bridget McKenzie's office carved up $100 million in grants to sports groups around the country, handing money to groups depending on whether the Coalition was targeting the electorate in last year's election.
But it also failed at the last, going through an exhaustive process to rank 1925 applications and choose the top 426 of them, but then ignoring its own choices to send McKenzie recommendations based on the ones she wanted.
"We worked with the minister's office and provided a list to the minister of the applications that the minister would likely approve," is how Sport Australia's Luke McCann explained it on Thursday.
Sport Australia did give McKenzie's office its rankings but its recommendations were different.
"We sent a list of recommended applications we knew the minister was supportive of."
"So, right from the start the minister was selecting the recommendations that Sport Australia were going to provide?" Labor's Don Farrell quizzed.
"The minister was advising us under the grant guidelines which applicants she was supportive of and we were reflecting that in our submissions," McCann said.
By this, you can read a deeply confused process.
By the third round of funding, as the election loomed, things changed. It was only at that point that Sport Australia finally sent the minister its own recommendations, this time "much more aligned", it says, with the 426 the board had originally approved.
Why did you do it for round 3? Farrell asked.
"It was in our view that as we worked through the iterative process of this grants program we needed to be better in providing our advice and consistent with better practice," McCann said.
Chairman John Wylie said Sport Australia got better at its "documentation" as time went on. The first round of funding was "based on what projects the minister would approve". During the second round, Sports Australia made sure it noted that "the list the minister wished to approve carried risks because it was different from the list of 426 that we had endorsed". By the third round, Sport Australia made clear recommendations to McKenzie's office based on its own original rankings.
What the officials didn't spell out was that by the third round the Audit Office was on the scene. The Audit Office started working with Sport Australia from March 2019. On March 21 McKenzie's office told Sport Australia which groups it was going to fund. On April 3, Sport Australia wrote back to McKenzie with its list.
On April 11, 15 minutes after the caretaker period began, McKenzie told Sport Australia which she had funded - and no they weren't the ones recommended. She continued the hair-raising rodeo-ride process she had adopted from the start, inputs from every direction, decisions made and torn up, funding shifted and shifted again, projects in and out, spreadsheets amended and amended again, colour-coded so at least someone could keep track of which marginal electorates were being given money.
The fact that it took Sport Australia until the third round to stand up to the minister and make proper independent recommendations is worrying.
It is also worrying that Sport Australia didn't seek legal advice on whether McKenzie was entitled to make funding decisions in the first place. The auditor-general in his report said it was not clear to him that McKenzie had the authority. The Health Department also raised the question in 2018. But Wylie told the hearing that the program had been built from the beginning on the basis that McKenzie was the approver, that was written into the guidelines, and therefore was unexceptional to us that she had an active role in the approval process".
Acting chief executive Robert Dalton added that there was precedent in other grants programs, so this one didn't set off alarm bells. Only when the auditor raised doubt in January this year did Sport Australia seek legal advice - from an "eminent Queen's Counsel". He had concluded all was in order, the organisation says.
READ MORE:
- Pauline Hanson changes her mind, saving Mathias Cormann over sports grant
- Senate threatens to strip Mathias Cormann of role over sports grant
- Deputy Nationals leader Bridget McKenzie gave grants to marginal seats, audit finds
- 'Unchecked' conflict of interest uncovered in Sport Australia audit
- Bridget McKenzie has nowhere to hide in sports grants scandal
- Phil Gaetjens accused of being Scott Morrison's 'butler'
- Phil Gaetjens rejects allegations of bias over sports rorts report
What Sport Australia evidently did do was document its concerns behind the scenes. Wylie told the hearing that the process was raised with the board's finance and risk committee on December 13, and "duly noted". It was also discussed by the board.
"The message conveyed was that this program was being carried out in a manner that was consistent with the way that the program guidelines had been expressed. But the organisation's view of the risks of that had been appropriately registered."
The concerns were also conveyed to McKenzie's office.
"On a number of occasions we raised risks involved in decisions being made independently from the board-endorsed list that had gone forward at the initial stage to the minister," Wylie said.
So, process a debacle. Concerns raised, concerns written down somewhere. Which, from Sport Australia's viewpoint, apparently means duty discharged. Everyone free to dust off their hands and put their feet up.