Audit Office sports grants report cites ‘conflict of interest’ at Sport Australia

January 16, 2020

Nigel Benton

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 election (below).

About the author

Nigel Benton

Co-owner / Publisher, Australasian Leisure Management

Nigel Benton is the co-owner and publisher of Australasian Leisure Management, Australia and New Zealand’s only magazine for professionals in all areas of the leisure industry. Having established the magazine in 1997, shortly after his relocation to Australia, he has managed its readership rising to over 11,500 and its acceptance as the industry journal for professionals in aquatics, attractions, entertainment, events, fitness, parks, recreation, sport, tourism and venues.

As of 2020, he has launched the new Asian Leisure Business website.

Among a range of published works and features, his comments on a Blog (blogspot) from 2007 to 2011, when this website went live in its current form, may be interesting to reflect back on.

Click here to connect with him via LinkedIn.