Australian Government Grants – Briefing, Reporting, Evaluating and Election Commitments (RMG 412)

1.  The objective of grants administration is to promote the proper use and management of public resources through collaboration with the non-government sector to achieve government policy outcomes.
2. Grants administration encompasses all the processes undertaken by entities and can be described through the grants lifecycle (see paragraph 2.8 of the CGRGs):
    
   1. design of grant opportunities and activities, such as:
      • planning
      • defining objectives and determining desired outcomes
      • identifying, managing and mitigating risks, and
      • collaborating with government and non-government stakeholders
   2. assessment and selection of grantees, including:
      • compliance with eligibility requirements
      • assessment of grant applications (where applicable), and
      • decision making
   3. the establishment of grants, such as:
      • making of a grant
      • developing the grant agreement (where applicable) – based on the whole-of-government grant agreement template suite and
      • finalising the grant agreement with the potential grantee
   4. the ongoing management of grantees and grant activities, such as:
      • stakeholder management and managing grant agreements
      • monitoring grantee performance and compliance with the grant agreement
      • managing risks and issues, and
   5. evaluation of grant opportunities and activities, such as:
      • review of individual grantees or grants, and
      • evaluation of the grant opportunity against the desired policy outcomes and any performance indicators.
3. In addition to the guidance contained in this RMG, there are tools and templates attached for officials to assist them to comply with the briefing requirements in the CGRGs, the PGPA Act and to assist with promoting the proper use of Commonwealth resources. These tools are aids and are not designed to capture each particular circumstance.
   • Attachment A provides a checklist for officials briefing ministers on proposed grants.
   • Attachment B provides a template letter for reporting on grants awarded in a Minister’s own electorate.
   • Attachment C provides a template for the annual ministerial report where a minister has approved a grant that the relevant entity official recommended be rejected.

4. Accountability arrangements in grants administration relate to both the processes of grants administration, including grants allocation processes and ongoing grants management as well as the achievement of Government policy outcomes.
5. Ministers, accountable authorities, officials and grantees all have their respective roles to play in achieving specific government policy outcomes and should be held accountable for the manner in which they fulfil these roles.

1.1 Documenting decisions

6. The CGRGs contain a number of provisions regarding documenting decisions or recording the basis for certain decisions, for example:
   • Officials must establish and document whether a proposed activity is a grant prior to applying the CGRGs^[2] (see paragraph 4.2, CGRGs)
   • Where an accountable authority or official approves the proposed commitment of relevant money in relation to a grant, the accountable authority or official who approves it must record, in writing, the basis for the approval relative to the grant opportunity guidelines and key consideration of value with relevant money (see paragraph 4.5, CGRGs).
   • Where a method, other than a competitive merit-based selection process is planned to be used, officials should document the decision and record why a different approach will be used (see paragraph 11.5, CGRGs).
7. Officials should develop policies, procedures and documentation necessary for the effective and efficient governance and accountability of grants administration (see paragraph 12.4 of the CGRGs). Documented internal procedures and associated operational guidance assist in guiding each aspect of the grants lifecycle and support sound administration of grant opportunities and grant activities. They can also assist with setting out processes for documenting decisions to meet the requirements in the CGRGs. It is important that internal procedures and operational guidance are developed prior to the commencement of a grant opportunity or program and are reviewed and maintained over the grants lifecycle. For example:
   • Officials should develop appropriate risk management frameworks and procedures
   • Risks should be reviewed and managed throughout the grants lifecycle to minimise the impact of risks developing into issues
   • Issues management policies and procedures should be clearly documented
   • Decision makers should be appropriately and consistently briefed on risks as they eventuate throughout the grants lifecycle
   • Officials should establish grants assessment and negotiation processes that are consistent with the published grant opportunity guidelines
   • Decision-makers should be provided with clear, consistent documentation outlining the processes and recommendations of a grant opportunity
   • Officials should develop consistent processes to commit relevant money for grants programs
   • Officials should provide clear and accessible feedback and complaint mechanisms for stakeholders, and
   • Processes and documents should be standardised where practicable.
8. Processes for keeping accurate and complete records are important not only to inform and support the outcomes of assessments but also to:
   • form the basis for developing appropriate and complete advice to decision-makers, and
   • provide feedback to applicants, (see paragraph 13.2 of the CGRGs).

1.2 Grants administration through hubs

9. When developing policy proposals, entities should seek to leverage whole-of-government initiatives. Entities should make the best use of existing entity structures, business processes, and ICT architecture that is compatible with relevant whole-of-government strategies and the Government’s Digital Transformation Agenda.
10. The Government has established the Streamlining Government Grants Administration (SGGA) program, under which participating entities are required to consume grants administration services from one of the Community or Business Grants Hubs. 
11. Entities that consume grant administration services from Hubs should clearly advise their Minister on which services have been delivered by a Hub, how these services have informed decision-making by the entity, and any recommendations for Ministerial approval.
12. Consuming grant administration services from a Hub does not reduce accountable authorities’ responsibilities under PGPA Act.  Further information on the responsibilities of accountable authorities as part of these arrangements is available via the Shared Services Arrangements Guide 04/2017: Governance (Assurance) Framework – available from grantsadmin@finance.gov.au.

1.3 Briefing Ministers

13. Accurate, complete and timely advice to decision makers assists Government to achieve the policy outcomes of a grant opportunity and value with relevant money (refer below).
14. The CGRGs also require that Ministers must not approve a grant or group of grants without first receiving written advice from officials on the merits of the grant or group of grants. That advice must meet the requirements of the CGRGs (see CGRGs paragraph 4.6). Officials can refer to Attachment A, which outlines the minimum briefing requirements and provides a checklist for officials to use when preparing advice where Ministers are approving grants.
    • The CGRGs provide that when briefing Ministers on the application and selection process followed, for demand driven selection processes, the advice should include how the grant allocation method was developed, explain how implementation issues were considered and outline the risk mitigation strategies.  Officials may consider providing similar information for other grant selection processes, when briefing Ministers.
15. Entities may seek advice from committees comprised of external representatives (external committees).  For the purposes of briefing Ministers, recommendations from external committees can be provided (either directly or through the department), so long as the briefing includes information noting which applications:
    • Fully met the selection criteria;
    • Partially met the selection criteria; and
    • Did not meet the selection criteria.
16. Ministers must also record, in writing, the terms and basis for the approval of the grant, relative to the grant opportunity guidelines and the consideration of value with relevant money. In addition to the requirements in the CGRGs, there are further requirements in section 71 of the PGPA Act.

2.1   Ministers' grants reporting obligations

17. When briefing Ministers in their role as an approver, officials must provide information on the applicable requirements of the PGPA Act and Rule and the CGRGs, including the legal authority for the grant (see paragraph 4.6.b,of the CGRGs).
18. Officials must advise their Minister on whether a grant will provide for activities in the Minister’s own electorate. This must be identified in the brief to the Minister when advising on grants approval options, in line with the minimum briefing requirements.
19. Paragraphs 4.11 and 4.12 of the CGRGs contain specific requirements for Ministers where they approve grants in their own electorate and where they approve grants that are not recommended by the relevant officials.
20. Paragraph 4.11(a) provides that where a Minister (including an Assistant Minister) approves a proposed grant in his/her own electorate, the Minister must write to the Finance Minister advising of the details. To assist with this requirement, Attachment B provides a template letter.
21. Paragraph 4.12(a) provides that Ministers (including Senators) must report annually to the Finance Minister on all instances where they have decided to approve a particular grant which the relevant official has recommended be rejected. The report must include a brief statement of reasons (i.e. the basis of the approval for each grant). The report must be provided to the Finance Minister by 31 March each year for the preceding calendar year.
    • The information that should be included in the annual report to the Finance Minister is outlined at Attachment C.

 2.2  ‘Report once, use often’

22. The CGRGs do not mandate any reporting requirements for grant recipients. However, appropriate performance and other information from grant recipients is important to achieving government policy outcomes. It can help evaluate whether a grant opportunity has achieved the desired results and achieved value with relevant money.
23. Officials should apply the ‘report once, use often’ and proportionality principles when designing grants application and reporting requirements. Officials should not seek information from grant applicants and grantees that has already been provided to an Australian Government entity and is available to officials. Officials should only seek information where it is necessary to assist them to properly administer or evaluate the grant.
24. Wherever possible, officials should seek to reduce/consolidate the amount of information requested from grantees. Officials may consider how standardising grantee reporting across multiple grant agreements can reduce the administrative burden on grantees.
25. If an organisation is registered with an Australian Government regulator, then a financial acquittal should not be required, unless the activity is high risk. Box 1 provides an example of an Australian Government regulator. Officials can still seek a declaration or certification from the grantee that the grant was spent for the purposes specified in the grant agreement, as well as requiring them to identify any underspends. This does not affect the need for grantees to maintain financial and other records that would enable a review of financial information if required.

26. A key principle of grants administration in the CGRGs is an outcomes orientation.  Paragraph 10.1 of the CGRGs notes that grants administration should be designed and implemented so that grantees focus on outcomes and outputs for beneficiaries, while seeking the most efficient and effective use of inputs. Accountable authorities and officials should focus on achieving government policy outcomes.

3.1   Evaluation Strategies

27. Entities should adopt an early focus on evaluation, through developing an evaluation strategy during the design phase of the grants lifecycle. Evaluation includes establishing appropriate performance measures on which to evaluate individual grants and the grant opportunity program as a whole.
28. An effective evaluation strategy should support assessment of:
    • the continued appropriateness of the grant opportunity
    • the effectiveness of the grant opportunity (that is, whether the stated objectives have been achieved, and any barriers to success). Effectiveness indicators should demonstrate the effect to which grant activities have made positive contributions to the outcomes of the grant opportunity
    • if there would be a more efficient or effective way of achieving the Government’s policy outcome(s), and
    • whether the Government’s resources should remain allocated at current levels, be increased, reduced or discontinued.
29. It is important that published grant opportunity guidelines, other guidance (if applicable) and the grant agreement clearly outlines the nature of information expected to be collected and reported by grantees as part of an evaluation. A sound strategy would be expected to identify the:
    • performance measures
    • performance indicators
    • data sources intended to be used, and
    • methodologies to be applied to analyse the data.

3.2   Conducting the evaluation

30. The evaluation of individual grants is best achieved through specifying their reporting requirements, including performance measures, in grant agreements. This data is also a common source of information used to evaluate the overall grant opportunity, or broader grant opportunity program. In this respect, it is important that entities take steps to ensure that grantee data has been presented on a comparable basis for analysis. This may be through standardised reporting systems, or analytical work undertaken in the entity.
31. There are also benefits in considering additional data sources. Additional data sources, such as statistics from the Australian Bureau of Statistics, other government data references (including State/Territory data), or stakeholder data may be useful for an evaluation. Entities can use population-level data to ascertain if grant activities have achieved broader Government policy outcomes.
32. Evaluation work may also involve qualitative approaches (for example, case studies of individual grants), to provide a deeper perspective into how the grant activities have assisted individual communities. Care should be taken to ensure case studies are prepared to ensure they accurately illustrate a particular scenario or can be representative of other grants awarded.

3.3   Reporting on the evaluation

33. The evaluation should provide a balanced assessment of the grant opportunity which:
    • has a particular focus on the extent to which the Government’s policy outcomes have been achieved
    • details the context of the grant opportunity
    • defines the validity and reliability of the evaluation data and methodology(ies) used
    • discusses any challenges in conducting the evaluation
    • links the analysis to the findings/conclusions and recommendations, and
    • identifies whether the outcomes were in line with the expectations of Government, grantees and the entity.
34. The proportionality principle should inform the conduct and reporting of grant opportunity evaluations.

35. During an election campaign, government and non-government candidates may undertake to provide certain funding, services or facilities if their relevant party is elected or re-elected to government. Election commitments are often implemented through a grant. In delivering on these ‘election commitments’, it is important that the award of a grant is consistent with the PGPA Act and Rule, in particular, the proper use and management of public resources, and the CGRGs.
36. The CGRGs are largely principles based and do not differentiate between proposed grants which stem from an election commitment and any other grant proposal. As such, election commitments implemented through a grant need to comply with the CGRGs.
37. Entities may consider whether it would be appropriate to fund election commitments through an existing grant opportunity or program, a dedicated grant opportunity or program, or as a one off, ad hoc grant.
38. Information below may assist officials in their consideration on administering election commitment grant opportunities.
    • Funding of election commitments through existing grant opportunities or programs needs to be carefully considered in terms of the potential for this to:
      • result in an expansion of the existing grant opportunity or program through a variation of the grant opportunity’s eligibility and assessment criteria, which may disadvantage those applications that do not relate to election commitments; or
      • reduce funding that would otherwise be available under the program, thereby possibly leading to calls for the size of the program to be increased.
         
    • Existing grant opportunities or programs will have objectives, eligibility requirements and assessment criteria that have been established in relation to that opportunity or program and which a proposed grant would need to satisfy in order to be funded. The policy intent underpinning an election commitment may not be consistent with those objectives, eligibility requirements and assessment criteria and therefore is unlikely to satisfy these requirements.
       
    • A more appropriate mechanism for the implementation of one or more election commitments relating to a particular portfolio of responsibility may be the establishment of a separate grant opportunity to be used for the exclusive purpose of administering election commitments.
      • Officials should consider proportionality (having regard for the policy objective of the grant opportunity) while developing robust processes to ensure the decision maker’s capacity to demonstrate that funding decisions have been taken in accordance with the relevant statutory and policy requirements.
      • An important role for officials is to ensure Ministers are appropriately informed as to the nature of the project and whether it is likely to make proper use of relevant money.
      • Given election commitments are typically announced in broad terms, this process will usually involve project proposals being sought from proposed grantees. Those proposals are then to be assessed against the guidelines in order to determine their suitability for a grant, including assessing relevant risks to the Commonwealth, and achieving value with relevant money and the extent to which those risks might be able to be treated or mitigated. They must be approved in accordance with the relevant sections of Part 1 of the CGRGs.
         
    • The guidelines established for such grant opportunities, provide the vehicle for advising proposed grantees of election commitment projects:
      • that funding can only be approved where the Government is satisfied that the project would be an efficient, effective, economical and ethical use of relevant money
      • of the factors that will be considered in making that determination (including as appropriate, the standards their project proposal will need to meet), and
      • of the obligations that proposed grantees will be expected to satisfy.  

There are many considerations that a minister needs to take into account before deciding to award a grant. This checklist contains a list of items that officials may consider when preparing the brief for ministers. Note that the list provided is not exhaustive and officials can include additional information in the brief.

Minister for Finance

Parliament House

CANBERRA ACT 2600

Dear Minister,

I am writing as required by paragraph 4.11 of the Commonwealth Grants Rules and Guidelines to notify you of a grant that I approved in my electorate.

The grant was assessed as part of [an open, competitive, merit–based process] [a targeted process] and was recommended for approval by [the expert panel engaged to assess the grant on its merits][officials within the Community/Business Grants Hub][officials within my entity].

Details of the grant are [included in the table below][contained in the copy of the attached letter to the grant recipient].

Please contact [officials] on [phone] if you have any queries regarding this grant.

Yours sincerely

accountable authority see subsection 12(2) of the PGPA Act.

authority means the legal authority (whether expressed or implied) to exercise a power or function that can be given directly through legislation (e.g. accountable authorities’ powers under section 23 of the PGPA Act, section 32B of the Financial Framework (Supplementary Powers) Act 1997 or other specific legislation) or through a delegation or authorisation.

assessment criteria are the specified principles or standards against which applications will be judged. These criteria are also used to assess the merits of the proposals against a benchmark and, in the case of a competitive granting activity, to determine the applicant rankings.

arrangement includes a contract, agreement, deed or understanding (see subsection 23(2).

Commonwealth Grants Rules and Guidelines 2017 (CGRGs) establish the overarching Commonwealth grants policy framework within which entities develop their own specific grants administration practices. They also articulate the expectations for all non-corporate Commonwealth entities in relation to grants administration.

eligibility criteria refer to the mandatory criteria which must be met to qualify for a grant. Assessment criteria may apply in addition to eligibility criteria.

entity means a Commonwealth entity and includes a Department of State, a Parliamentary Department, a listed entity or a body corporate established by a law of the Commonwealth (see section 8 of the PGPA Act).

financial acquittal refers to the report of financial transactions relating to a grant. The report may require recipients to provide item by item expenditure information. It is generally certified and may sometimes be independently certified.

grant is defined by CGRGs paragraph 2.3 as: an arrangement for the provision of financial assistance by the Commonwealth or on behalf of the Commonwealth:

1. under which relevant money or other CRF money is to be paid to a grantee other than the Commonwealth; and
2. which is intended to help address one or more of the Australian Government’s policy outcomes while assisting the grantee achieve its objectives.

grant activity(ies) refers to the project/tasks/services that the grantee is required to undertake.

grants administration is the processes that an entity undertakes to achieve Government policy outcomes through grants. It includes: planning and design; selection and decision-making; the making of a grant; the management of grant agreements; the ongoing relationship with grants grantees; reporting; and review and evaluation.

grant agreement sets out the relationship between the parties to the agreement, and specifies the details of the grant.

grant opportunity refers to the specific grant round or process where a Commonwealth grant is made available to potential grantees. Grant opportunities may be open or targeted, and will reflect the relevant grant selection process.

grant opportunity guidelines refers to a document(s) containing the relevant information required for potential grantees to understand: the purpose, outcomes and objectives of a grant; the application and assessment process; the governance arrangements (including roles and responsibilities); and the operation of the grant. Grant opportunity guidelines include related documents, such as the application guidelines and forms, invitations to apply, supporting documentation, frequently asked questions, draft grant agreements, and any templates for reporting or acquittals.

GrantConnect is the Australian Government’s whole-of-government grants information system, which centralises the publication and reporting of Commonwealth grants in accordance with the CGRGs.

grantee means the individual/organisation which has been selected to receive a grant.

grants lifecycle includes the: design of grant opportunities and activities; assessment and selection of grantees; establishment of grants; ongoing management of grantees and grant activities; and evaluation of grant opportunities and activities.

officials means officials of a Commonwealth entity. An official of a Commonwealth entity is an individual who is in, or forms part of the entity (see section 8 of the PGPA Act).

one-off or ad hoc grants generally do not involve planned selection processes, but are instead designed to meet a specific need, often due to urgency or other circumstances. These grants are generally not available to a range of grantees or on an ongoing basis.

other Consolidated Revenue Fund (CRF) money is money that forms part of the CRF other than relevant money or any other money of a kind prescribed by the rules (see section 105 of the PGPA Act).

proper when used in relation to the use or management of public resources, means efficient, effective, economical and ethical (see section 8 of the PGPA Act).

relevant money means

1. money standing to the credit of any bank account of the Commonwealth or a corporate Commonwealth entity; or
2. money that is held by the Commonwealth or a corporate Commonwealth entity; (see section 8 of the PGPA Act).

selection criteria comprise eligibility criteria and assessment criteria.

selection process is the method used to select potential grantees. This process may involve comparative assessment of applications or the assessment of applications against the eligibility criteria and/or the assessment criteria.

^{[1] Corporate Commonwealth Entities should use this as a guide where they are undertake grants administration on behalf of the Commonwealth.}

^{[2] See CGRGs paragraph 4.2 and Resource Management Guide No. 411: Grants, Procurements and other financial arrangements for further information}