The federal health department “fell short of ethical requirements” and deliberately breached commonwealth grant guidelines in administering a $2bn Morrison government community health program, the audit office has ruled in a blistering report.
The Australian National Audit Office found just two of 63 major projects were assessed as “highly suitable” for the Community Health and Hospitals Program (CHHP), which was meant to be a key benchmark to even be shortlisted.
“The Department of Health and Aged Care’s administration of the Community Health and Hospitals Program was ineffective and fell short of ethical requirements,” the ANAO said.
The health minister, Mark Butler, has savaged his predecessors for announcing projects “without assessment or guidance” and ordered his department to “run the ruler” over remaining projects funded in the program.
The audit office said the CHHP included $1.25bn in the 2018–19 mid-year economic and fiscal outlook and $747m in the 2019–20 budget, both ahead of the May 2019 election.
The ANAO said the CHHP and associated programs comprised 171 projects, including 108 grants and 63 national partnership agreement projects with state or territory governments. The health department did not develop grant guidelines for seven of the 108 grants; the ANAO claimed at least three of those were a “deliberate decision by senior management to not comply with finance law”.
“Health’s administration of CHHP grants was not appropriate, involving deliberate breaches of the relevant legal requirements and the principles underpinning them,” the ANAO said.
“Health recommended funding multiple grants prior to confirming that there was lawful authority for grants, or despite knowing that there was no legislative authority.”
The department established an expression of interest process for potential projects and assessed applicants, but the ANAO said “most approved projects were selected by government outside this process”.
The ANAO alleged: the department did not advise