An internal audit shows the Defence Department has been failing to comply with federal grants guidelines and rules.

The audit has reportedly found breaches of the Commonwealth Grants Rules and Guidelines in all seven grants it examined. 

“The root cause of this appears to be grant managers not understanding the expected standards and/or a perceived absence of any accountability for their actions or lack thereof,” the audit says. 

The seven grants in the audit report were for a total value of around $1.7 million, and took the form of ad-hoc grants and grants requiring ministerial approval. 

The breaches appear to have been made in general administration, and said it is not a sign of serious wrongdoing. 

Conflict-of-interest records and documents covering the risks for the recipient and the department were not included in the process or given to the auditor. 

It also found approval documents, including ministerial briefs, were either not provided to the auditor or did not meet the federal rules and guidelines.

When auditors looked at GrantConnect - the federal grants information portal - the grants were found to be non-compliant with the 21-day publication requirement. 

“Four of the seven approved grants have not been published on GrantConnect, whilst the remaining three were published more than 40 days later than required,” the audit found. 

In 2019, PwC was brought in to review the management of defence grants and create a new grants-management framework. 

The latest audit found this framework had the potential to address the issues identified.

“To complement evaluation activities proposed within the framework, the audit recommends that grants-management areas be required to undertake an annual self-assessment of their compliance against the grants-management framework and report any non-compliance,” the auditors wrote. 

“This control would assist in removing any perceived absence of accountability and would help inform future audits.”