Second review of $1.3bn MMI grants program on the cards

Australia’s national auditor is contemplating a review of the former Morrison government’s $1.3 billion Modern Manufacturing Initiative despite an earlier internal review commissioned by Labor clearing the grant selections.

The Department of Industry-run grant program is one of several government programs across multiple departments and agencies in the Australian National Audit Office’s sights for next financial year.

Other programs being considered for potential audits include the government’s $600-plus million digital identity system, Defence’s new Accenture-built security vetting system, and the Parliamentary Expense Management System.

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According to the draft work plan for 2023-24, released on Wednesday, the potential audit of the MMI grant program would “assess whether the award of funding … was effective and consistent with the Commonwealth Grant Rules and Guidelines”.

The audit would focus on the additional $303.9 million funding provided in the March 2022-23 Budget, which has since been almost entirely reversed by the Albanese government to help improve the budget bottom line.

It marks the second time in two years that the program – which was still in the process of awarding the funding to successful recipients earlier this year – has been listed for review and follows an internal review after the Albanese government entered office.

The internal review was ordered after the former Coalition government announced all projects approved for co-investment in the 10 weeks leading up to last year’s election, but it ultimately cleared the selection.

In January, Industry minister Ed Husic asked his department to report weekly on its progress signing off on the grants after it emerged that none of the projects under the largest $828 million ‘Collaboration’ stream had yet received any money.

Other potential audits in the Industry portfolio include the planned $15 billion National Reconstruction Fund, Australian Space Agency’s regulatory framework, IP Australia’s cost recovery activities,

A number of other programs are singled out for review after avoiding scrutiny last year, including the digital identity system, My Health Record, and the Southern Positioning Augmentation Network (SouthPAN).

The digital identity system audit would seek to review its “implementation, design and functionality, including … the allocation and expenditure of funding,” eight years after the project was launched by former Prime Minister Malcolm Turnbull.

The government is re-doubling its efforts on the digital identity system – in part to limit the impact of data breaches –  after the Coalition failed to bring legislation for an expansion of the system to the private sector before the last year’s election

Other potential audits for 2023-24 include:

  • myClearance, the whole of government vetting system built by Accenture at a cost of $130 million, which has faced “substantial challenges” since it went live late last year
  • The Parliamentary Expense Management System and whether the project had “effective procurement and whether project management and governance achieved agreed outcomes
  • Services Australia’s modernisation program, including the Welfare Payment Infrastructure Program, Single Touch Payroll and service centre modernisation
  • The effectiveness of the Australia Media and Communications Authority’s enforcement of the online safety regulatory framework
  • The Consumer Data Right and whether the design and implementation of the program has been “fit for purpose”
  • The effectiveness of Defence’s probity arrangements when it procures technology products and services, and its management of cyber security risks associated with the Australian Defence Force mission critical ICT systems
  • The data security and governance arrangements of the government’s accredited data service providers, including the Australian Bureau of Statistics, and the National Data Commissioner’s regulation of data sharing

Do you know more? Contact James Riley via Email.

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