What Happened With WestInvest? (A Grant Program Design Post-mortem)

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The New South Wales government’s $5 billion WestInvest infrastructure grant program has been nothing short of controversial after a recent audit concluded it “lacked integrity.”

The Audit Office of New South Wales published its audit in February 2024, raising serious concerns about the design of this grant program, highlighting fundamental flaws in the planning, consultation, and governance of this massive initiative intended to build new and improved facilities in western Sydney.

Announced in 2021 as an economic stimulus post-COVID, WestInvest faced swift criticism over the ‘inequitable’ allocation of funds across 15 local government areas (LGAs), with some receiving up to 15 times more funding per capita than others.

We’re diving into what went wrong with WestInvest, the audit findings, and how a more structured and consultative approach to grant program design and management could have prevented these issues.

The audit in 2024: What went wrong?

The audit by the NSW Audit Office revealed fundamental flaws, including the $5 billion commitment lacking “adequate research and consultation” to justify committing such a significant amount of public money upfront, and that WestInvest “lacked integrity” — a damning verdict for any government grant initiative.

The lack of planning that went into the design of the program was due to two key reasons:

  • The NSW Treasury was asked to provide the program proposal within a very short timeframe the week before the announcement, which limited its ability to complete a thorough analysis to support the development of the proposal.
  • No consultation with other government agencies or LGAs occurred before a decision was made, which neglected the priorities of eligible councils within its design.

Other issues included undocumented and inequitable funding decisions due to inconsistent assessment processes and the use of competitive grant rounds. The audit found that 9 of 27 state government projects allocated $1.1 billion were assessed as having “low or moderate merit” and misaligned with objectives. The ABC reported that “decisions about which councils were eligible and which projects to bankroll were not documented, and were instead chosen by then-treasurer Matt Kean’s office.

Read the full audit report (PDF)

How would we improve the next WestInvest?

When designing a large-scale grant program in the future, here are the considerations that need to be made at each stage of the process.

1. Pre-award improvements

Looking back, a majority of issues were incurred due to the planning, or the limited planning, that went into the design of WestInvest. We firmly believe that rigorous planning at the pre-award stage is essential when designing any major grant program that is funding long-term, sustainable projects.

  • Conducting a thorough needs analysis: At the beginning of designing a new grant program, the grantmaker must fully interrogate the purpose of the grant money. This includes not only the types of projects it intends to fund but also forecasting of which parties should be awarded the funding to achieve the outcome they want, especially when it comes to a closed program like WestInvest.
  • Consultation with participating LGAs: Seeking to understand the infrastructure priorities and funding shortcomings of individual LGAs would’ve better informed the design of the program, and likely highlighted that the mechanisms of competitive grant rounds would’ve resulted in inequitable distribution between councils.
  • Allow enough time to review: The insufficient time allowed for the NSW Treasury to turn around the WestInvest proposal to meet the announcement date set off a domino effect that impacted all stages of the grant program from beginning to close out.

2. Award stage improvements

Another one of the audit’s central findings was the inequitable allocation of funding across the 15 LGAs for the $1.6 billion community projects competitive round that was administered as a competitive grant program. LGAs received significantly more funding compared to eligible community groups, Local Aboriginal Land Councils, and educational institutions, who had less resources and experience in preparing grant applications. It also resulted in an imbalanced distribution between eligible LGAs.

  • Reconsider if a competitive round fits the outcome desired: The choice to use a competitive grant round, even though it complied with the NSW grants administration guide, didn’t result in equitable distribution of funding due to the disparity in ability between applicants when creating high-quality applications. The audit recommends that government agencies seriously consider if competitive rounds are the most equitable funding mechanism to achieve the stated purpose of their grant program.
  • Maintaining thorough documentation of award criteria: In good grant management, we cannot stress enough the importance of basing all funding decisions on clear, pre-defined criteria that are documented and accessible to all applicants and the public. This would have helped stakeholders better understand the decision behind why award decisions were made, and those making the decisions can be held accountable for its consistent execution.
  • Allocate adequate time for applications: The audit recommendations highlight when using competitive grant programs, agencies should provide sufficient time for quality assurance and consistency checks when assessing applications, especially when external advice is being used to support an assessment process. The disparity between applicants’ ability to compile a high-quality grant application means grantmakers should allow ample time for less experienced, but just as valuable, potential recipients to craft their applications.

3. Post-award improvements

Questions were raised around whether funded WestInvest projects ultimately aligned with the program’s intended objectives and areas of focus: to build new and improved facilities and local infrastructure to help communities hit hard by COVID-19.

The critical need for comprehensive grant performance monitoring is still a very real one for all levels of government, especially as 21% of local government project funding is known to be spent on unexpected costs according to the Grattan Institute’s 2020 research.

  • Ongoing milestone tracking with early warning systems: A key gap the audit identified was the lack of regular reporting on the program’s progress towards achieving its objectives. This can be rectified using grant management software like SurePact, which provides both the grantmaker and recipients a framework for tracking grant milestones in a central platform. Without one source of truth for monitoring early warning signs of project variations, or misalignment to the program’s goal, the issues remain undiscovered until an audit is done after the fact.
  • Rigorous impact evaluation frameworks: The audit noted WestInvest did not determine if it succeeded in delivering on its strategic objectives like job creation and transformative infrastructure. Without the aforementioned central source of truth in place, picking up on the impact of projects as they’re delivered is extremely difficult and completely reliant on one-way reporting by the grant recipients. To improve impact evaluation during project delivery, a two-way system is crucial to maintaining accountability and transparency.

Centralised grant program management

With a grant portfolio as vast as WestInvest’s $5 billion spanning 15 LGAs and diverse project types, it’s virtually impossible to maintain full accountability with siloed, manual processes. Commenting on WestInvest’s shortcomings, the Audit Office urged adopting “robust program implementation plan(s)…good recordkeeping…and rigorous oversight.”

We’re huge advocates for government funding bodies and purpose-led grantmakers to implement a centralised grant management system and frameworks to achieve this rigour.

With the ability to support grant staff with automated reporting, real-time compliance checking, intuitive forecasting and planning capabilities, built-in documentation and audit trails, agencies can enforce consistent procedures and governance that prevent the next WestInvest from committing the same errors.

SurePact CEO Dan Pritchard also adds, “The centralisation of those grant programs, the clarity around them and the importance of being able to report on progress and status in a meaningful way to stakeholders [maintains] their ongoing support and maintains the accountability of the [grantmaking] organisation.”

Beyond an Australian government lens, Gartner’s 2020 Study on Grant Management Software Benefits also shows that organisations using centralised grant management software see 22% fewer overall errors and 21% savings in administrative effort and costs.

Are you designing a new grant program for your organisation?

SurePact’s grant management software features help grantmakers implement stronger pre-award governance, a better recipient reporting experience, and encourage transparency throughout the delivery process. Connect with us today to learn more.

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