The objective of the audit is to examine the effectiveness of the design and governance of the National Water Infrastructure Development Fund (the Fund).
To form a conclusion against the audit objective, the ANAO adopted the following high level audit criteria:
- Was an appropriate design process established to support the achievement of the Government’s objectives for the Fund?
- Was a sound governance framework established for the Fund, including robust performance monitoring, reporting and evaluation arrangements?
The audit did not examine the merits-based assessment and selection of projects under the feasibility and capital components of the Fund, or the subsequent management of projects.
Agriculture administered the Fund until January 2018. In January 2018, after the completion of audit fieldwork, Machinery of Government changes resulted in the transfer of administrative responsibility for dam infrastructure programs, including the Fund, from Agriculture to the Department of Infrastructure, Regional Development and Cities. Recommendations related to Fund governance have been directed to the Department of Infrastructure, Regional Development and Cities.
The design of the National Water Infrastructure Development Fund (the Fund) was effective. There is scope to improve governance arrangements to better support the implementation of the Fund.
Informed by extensive stakeholder consultation, the advice prepared by Agriculture on the design of the Fund was sound in relation to the rationale for the Fund’s feasibility component and the expected outcomes of the Fund, as well as its funding composition and duration, and design arrangements. The advice could have more clearly: outlined the evidence-base for including a capital component to the Fund; justified the capital funding envelope; and set out implementation arrangements at the time of the Fund’s approval. The advice provided to Government by Agriculture and PM&C informing the selection of the four Fund projects for announcement in the Developing Northern Australia White Paper was not underpinned by consistent assessment processes demonstrating that the most meritorious projects were recommended.
Appropriate oversight and project assessment arrangements have been established by Agriculture to support the implementation of the Fund. There were, nonetheless, weaknesses in program planning, risk management, and processes to demonstrate the proper use of relevant money, which put at risk effective implementation of the Fund going forward. In addition, the Fund’s performance monitoring, measurement and reporting framework requires further development to enable Agriculture to report against the Fund’s objectives.