Finance Department secretary Rosemary Huxtable has declared that clarity and transparency are critical in awarding Commonwealth grants, striking a stark contrast with the federal government's handling of the sports infrastucture program which has claimed a minister's scalp.
While studiously avoiding commenting directly on the government's handling of the Community Sport Infrastructure Grant program, Ms Huxtable said robust rules and processes were "the right thing" in allocating public funds.
In an oblique reference to the sports rorts saga, the Finance head told an Institute of Public Administration Australia forum on Friday that "there have been many Auditor-General reports about many grants programs over the years, and I'm sure there will be many more in the future. People have different views about the outcomes of those processes often."
"But, what I would say is that I think the right thing is that we have very strong institutions, that we have very clear guidelines."
Ms Huxtable said that the Finance Department, through two "grants hubs", administered 328 grants programs worth $10 billion of behalf departments and agencies.
She said all grants overseen by Finance were administered in accordance with Commonwealth Grant Rules and Guidelines, which set out key legislative and policy requirements and "better practice principles of grants administration".
The Finance secretary admitted there had been "some resistance" to the hubs, but they "are actually really important ... and shouldn't be underestimated because they are essentially forming centres of excellence around grants administration".
The funding guidelines used in administering the Sport Infrastructure Grant program have come under scrutiny after the Auditor-General revealed that because Sport Australia was a corporate Commonwealth entity it was not subject to the Commonwealth Grant Rules and Guidelines.
But the legality of the government's management of the sports grants program has been challenged at a Senate inquiry into the affair.
In a submission to the inquiry, Sydney University constitutional law expert Anne Twomey claimed that "large amounts of public money were spent unlawfully" and called for reform of the grants system.
Professor Twomey said that even though the CGRGs did not apply to Sport Australia, "it is unclear why they do not apply to the minister".
She said that if the-then Sport Minister Bridget McKenzie had intervened in the grants process as a delegate of the Australian Sports Commission, then she would not have been answerable to the grant rules.
But the government has argued that Senator McKenzie exercised her ministerial discretion. Professor Twomey said that, if this was true, then the CGRGs "would appear to apply", and the minster was in breach of requirements that she provide written reasons for her funding decisions and report to the Finance Minister for her reasons for departing from the advice of Sport Australia officials.
"There were multiple failures in the management and assessment process," the law professor said, and warned the episode was contributing to the erosion of trust in government.
"If Members of Parliament are concerned by the increasing disengagement of the public from the political system and the lack of respect for politicians, then this is a potent example of precisely what causes it," Professor Twomey said in her submission. "Serious action to reform the grants system and restore integrity to governance is necessary to arrest the ongoing corrosion of public confidence in our democratic system."
In his report, the Auditor-General recommended the CGRGs be extended to apply to corporate Commonwealth entities "where a minister approves grant funding".