This audit assessed the effectiveness of the design and implementation of the Liveable Cities Program, including the assessment and approval of applications.
Through the LCP, a total of $20 million in grant funding was awarded to 26 projects located in 14 major cities across all states and territories. These included seven infrastructure projects, primarily directed at improving pedestrian and cycling access but which also included the supply of low carbon energy, two residential developments and a rapid bus transit system. The other 19 projects approved were for planning, feasibility assessment and/or design activities that will inform future investment in infrastructure.
The distribution of funding in geographic terms and the nature of the demonstration projects provided the desired mix foreshadowed in the program guidelines so as to contribute to achieving the program objective of improving the planning and design of major cities. By the end of April 2013, funding agreements had been signed for the majority of the approved projects, with most of these projects contracted to be delivered by the program’s amended completion date of 30 June 2014.
Infrastructure’s management of the design and implementation of LCP was effective in most respects. Of note was that improvements were evident in the merit-assessment approach adopted by the department compared with earlier grant programs audited by ANAO. In particular:
- all eligible applications were assessed against published assessment criteria; and
- the scoring approach adopted enabled the comparison of the relative merits of applications against each criterion and in aggregate.
Infrastructure also adopted an improved approach to briefing the Minister on the outcome of the assessment process. The LCP briefing included a clear funding recommendation to the Minister based on the scores awarded against the assessment criteria and in consideration of the program objectives. In addition, a record was kept of the eight instances where the Minister’s decision diverged from the recommendation of the department—three projects not recommended by Infrastructure were approved by the Minister, and five projects recommended by the department were not approved for funding. This approach provides transparency and accountability for the advice given by Infrastructure, and the funding decisions that were subsequently taken.
However, there remain opportunities for further improvements to Infrastructure’s grants administration practices. Firstly, there were shortcomings with the assessment of applications in relation to the department’s eligibility checking and aspects of its conduct of the merit-assessment process. Secondly, it needs to be recognised that applications that are assessed as not satisfactorily meeting the published merit assessment criteria are most unlikely to represent value for money in the context of the program objectives.
In addition, an evaluation strategy was not developed at the outset of the program and remained outstanding as at May 2013, notwithstanding that most funding agreements had been signed by then and the program was nearly two years into its three year duration. Such a situation will have an adverse effect on the quality of advice to Ministers on any proposal to provide further funding to the program or to a similar program, as well as in assessing the contribution the program has made to the objectives of the National Urban Policy.
As indicated, this audit of the LCP has identified improvements in key aspects of Infrastructure’s grants administration practices, which should be embedded in all grant programs within the department. The ANAO has made three recommendations to address the further opportunities for improvement mentioned above relating to:
- enhancing the assessment of eligible applications, by clearly and consistently establishing benchmarks for scoring against assessment criteria and a minimum score an application is required to satisfy for each criterion in order for an application to be considered for possible recommendation;
- recording the value for money offered by each proposal under consideration, having regard to the published program objectives and assessment criteria; and
- developing an evaluation strategy during the design of a program.