The Regional Investment Corporation (RIC) was set up in 2018 with $4 billion in Commonwealth financing to streamline administration of farm business and water infrastructure concessional loans. The ANAO previously examined the Department of Agriculture, Water and the Environment’s administration of concessional loans and found several deficiencies and areas for improvement.
This audit examines the effectiveness of the design and establishment of RIC. It includes assessment of whether lessons from prior programs were adopted in the design of RIC and the extent to which its loan arrangements are effective.
To form a conclusion against the audit objective, the ANAO adopted the following high level audit criteria:
- was the design process effective?
- are governance arrangements sound?
- are loan arrangements effective?
- The design and establishment of RIC was largely effective. RIC is at the early stages of its roll-out of the farm business loans, the NWILF and other products. To optimise the outcomes from its products, RIC needs to improve its governance via enhanced risk management and developing a compliance and assurance strategy. Planned monitoring and evaluation requires review.
- The design process to establish RIC was largely effective. The Department of Agriculture, Water and the Environment (the department) partially applied lessons from prior programs in developing RIC and managed constitutional constraints on Commonwealth loan delivery. However, it did not analyse the effectiveness of prior loans programs and more robust data should have been used to forecast loan uptake and default rates.