The Australian National Audit Office’s report into former Federal Sports Minister Bridget McKenzie having allocated funds from the Community Sport Infrastructure Grant Program to target marginal electorates prior to the May 2019 Federal election has highlighted a “conflict of interest” at Sport Australia.
The Auditor-General recommended Sport Australia address problems of conflict of interest, noting an "undeclared and unmanaged conflict of interest involving a senior Sport Australia employee" with responsibility for the program.
The Australian National Audit Office (ANAO) report - Award of Funding under the Community Sport Infrastructure Grant Program - noted “there is a risk that the sport linked to this organisation was provided with a competitive advantage compared to other sports and potential applicants by that Sport Australia employee.
"Sport Australia advised the ANAO that it took action in relation to this issue."
Sport Australia Chief Executive, Kate Palmer, who is stepping down this month, is not the senior Sport Australia employee referenced in the report in relation to the conflict of interest.
However, having to defend the allocation of funds by Senator McKenzie’s office is understood to have influenced Palmer’s decision to leave the role.
The Auditor-General found reasons for funding decisions made, and not those recommended by Sport Australia, were not clearly documented, which caused problems for the Federal Government agency, which was unable to provide feedback to unsuccessful applicants.
Here the report advised "Sport Australia was unable to communicate the full and actual reasons for the rejection of their application, or otherwise provide those applicants with advice on the reasons for their application being unsuccessful.
Following yesterday’s release of the report, Sport Australia released a statement that advised “we accept the Auditor General’s three recommendations in the report that relate specifically to Sport Australia and have already taken significant steps to implement them, including additional measures. We seek to continually improve the administration of our grants programs for the sport sector, and there are lessons from this for the future.
“The Community Sport Infrastructure Grant Program has been delivering positive outcomes for hundreds of grassroots sporting organisations and local communities around the country, supporting construction and upgrades at sporting facilities to help increase participation and get more Australians moving.
“We remain committed to delivering the very best for sport and ensuring all Australians are able to access safe, inclusive and quality community sporting facilities.”
A spokesperson for Senator McKenzie, who has not resigned from Prime Minister Scott Morrison’s Cabinet, said the program was "very popular" and all recipients were eligible.
The spokesperson added “the ANAO report is clear that no rules were broken."
Current Federal Sport Minister Richard Colbeck echoed this stance, noting "as the ANAO report found, no applications assessed as ineligible were awarded grant funding."
The report notes testimony from the Minister's office included the argument that the guidelines included a reference to "other factors" being taken into consideration.
Senator McKenzie’s former Chief of Staff, quoted in the report, also argued "the success of the program relied on the support across Parliament so needed to make sure the spread of projects reflected the statistics and could be seen as fair".
However, the report declared advice about assessing the applications was inconsistent with the guidelines, adding “the minister's office drew upon considerations other than those identified in the program guidelines, such as the location of projects, and also applied considerations that were inconsistent with the published guidelines.
"It was this assessment process that predominantly informed the minister's funding decisions, rather than Sport Australia's process."
The report also suggests the entire scheme may have been illegal, with no apparent legal authority for the minister to make these decisions.
The report prepared by the Australian National Audit Office: Award of Funding under the Community Sport Infrastructure Program can be viewed at www.anao.gov.au/work/performance-audit/award-funding-under-the-community-sport-infrastructure-program.
Images: Outgoing Sport Australia Chief Executive, Kate Palmer (top) and Liberal candidate Georgina Downer, the daughter of former Australian Foreign Minister Alexander Downer, presents a novelty cheque for $127,000 to a South Australian bowling club - instead of the sitting local MP - in the lead up to the May 2019 election (below).
15th January 2020 - Audit Office report confirms that Federal Government targeted marginal seats with potentially illegal sports grants
11th December 2019 - Kate Palmer apologises for ‘unauthorised access’ following Sport Australia email hack
23rd November 2019 - Former Government lawyer says Federal Minister’s Community Sport Infrastructure allocations were ‘illegal’
12th November 2019 - Sport Australia announces strengthening of National High Performance Sports Strategy
11th November 2019 - Marginal electorates benefit under ‘dodgy’ Federal Government sport grant scheme
8th November 2019 - Sport Australia advice ignored by former Federal Sports Ministers in award of community sport infrastructure funds
29th October 2019 - Sport Australia and Parks and Leisure Australia agree partnership
28th October 2019 - Kate Palmer to step down from Sport Australia Chief Executive role
21st September 2019 - NSW Sports Minister steps down in corruption probe
24th July 2019 - Athlete rights crucial to sporting integrity
21st June 2019 - Parks Australia’s management of Federal protected areas slammed in National Audit Office report
10th June 2019 - Sport Australia Chief Executive recognised in Queen’s Birthday Honours
27th May 2019 - Sport Australia and AIS welcome new Minister for Sport
22nd May 2019 - Federal Government won’t deliver on APOLA funding plea to reduce drownings
20th May 2019 - Federal Government Community Sporting Infrastructure Grants invests over $100 million
13th May 2019 - Sport Australia misses opportunity at remarkable SportAccord Gold Coast
24th April 2019 - Liberal leaders repeat $15 million budget commitment to Sydney Swans AFLW facilities
16th April 2019 - MP presents $1.5 million novelty cheque to sports club despite funds not being approved
4th April 2019 - Sport Australia’s John Wylie welcomes Federal budget funding boost
15th February 2019 - Australian Parliament to consider legislation to strengthen sporting integrity
17th February 2019 - Sport Minister McKenzie accepts ridicule in battle to combat obesity
13th February 2019 - Sport Australia welcomes creation of new integrity agency
17th October 2018 - Sport Australia announces new integrity role appointment
7th September 2018 - Sport Australia Chief Executive intervenes in FFA governance dispute
22nd January 2018 - New Sports Commission executive to focus on partnerships and participation
7th November 2017 - ‘Political’ appointments overshadow move to majority female board for Australian Sports Commission
16th March 2017 - John Wylie reappointed to lead Australian Sports Commission through to the Tokyo Olympics
9th September 2009 - Queensland Sport Grants Went to Labor electorates
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