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UPDATED: Audit finds funding flaws in Australia’s Mobile Black Spot Programme

UPDATED: Audit finds funding flaws in Australia’s Mobile Black Spot Programme

Weaknesses identified in funding allocation for Australia's Mobile Black Spot Programme

The Federal government’s Mobile Black Spot Programme has fallen victim to “weaknesses” in the way the Department of Communications and the Arts allocated funding for the programme's first round of mobile base stations, according to the Australian National Audit Office (ANAO).

In a report entitled Award of Funding under the Mobile Blackspot Programme, published on 1 September, the ANAO said it found a number of weaknesses in the programme’s administration, which impacted the effectiveness of the assessment and selection process and, as a result, the value achieved from program funding.

Among these weaknesses was the criteria used by the Department to assess the merits of each proposed base station, which the ANAO said “did not sufficiently target funding toward the expansion of coverage where coverage had not previously existed”.

The ANAO said that 89 of the 499 selected base stations allocated funding provided minimal new coverage of additional premises and transport routes. These 89 base stations came at a combined cost of $28 million.

“As a consequence, public funding has resulted in substantial consolidation of existing coverage provided by grant applicants, as opposed to extending coverage in new areas – a key objective for the programme,” the report said.

The government’s Mobile Black Spot Programme began as a 2013 election commitment to extend mobile phone coverage and industry competition in remote, regional, and outer metropolitan areas. The funding for the selected base stations in the first round of the initiative came to $385 million.

The ANAO also suggested that the department did not establish appropriately structured methodologies to inform the technical and financial assessments of applicant proposals.

“The development of such methodologies, tailored to the objectives of the programme, would have improved the rigour of the department’s assessment of proposals, particularly in relation to applicant costing,” the report said.

Looking forward, the ANAO said that the department’s ability to measure the overall impact and effectiveness of the programme and report to stakeholders will be difficult, given the absence of a fit-for-purpose performance measurement and evaluation framework for the programme.

On the upside, the report suggests that department appropriately identified black spots thanks to the Mobile Black Spot Programme’s Database of Reported Locations, which listed over 6,000 publicly-nominated areas with partial, poor, or no mobile coverage. This information was used by the department to help determine the location of proposed base stations.

The problem, according to the ANAO, is that the approach taken by the department to promote the programme across targeted electorates was conducted inconsistently.

“This may have had an impact on the distribution of nominations across the electorates,” it said.

Additionally, the ANAO argued that the department’s assessment of applicant costings for proposed base stations “lacked sufficient rigour”.

“There was a scope for the department to have better prepared for the assessment of coverage claims and applicant costs,” the report said.

To help remedy the weaknesses it found in the allocation of the programme’s funding, the ANAO has recommended that the Department establish minimum scores for assessment criteria.

It also recommended that the Department implement an appropriately detailed assessment methodology tailored to the objectives of the programme, as well as a performance measurement and evaluation framework for the programme.

While the Department agreed with these recommendations in its initial response to the ANAO regarding the report, it argued that extending new coverage is just one of the aims of the programme, and that the infrastructure being funded through the programme also achieves the programme’s objective of providing the potential for improved competition.

However, it noted the establishment of a minimum new coverage requirement for round two base stations, and said it would implement the further enhancement of its assessment and evaluation documentation for the programme’s second round, as recommended by the ANAO.

The Department of Communications and the Arts has defended its processes involved in allocating funding for the first round of mobile base stations, saying that its selection criteria included the expected benefits that each base station would deliver. This included the amount of square kilometres, the number of premises, and the length of major transport routes to receive new mobile coverage.

"Consideration was also given to the total cost of the base station, the amount of Commonwealth funding being sought, the amount of funding the operator was proposing to co‑contribute, and the amount of co-contribution, if any, it had secured from a third party such as a state or local government," the Department said in a statement.

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