Four Commonwealth agencies have potentially breached the constitution through project funding not properly signed off by the responsible minister.
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A response to a Senate committee question has revealed $85.5 million in taxpayer funds destined for Commonwealth-state-funded projects had not followed correct processes, with both Treasury and the Australian National Audit Office flagging 25 possible breaches of section 83 of the constitution.
It calls into question the effectiveness of due process within certain Commonwealth departments when handling taxpayer funds.
Responses provided by Finance Minister Simon Birmingham on behalf of Treasurer Josh Frydenberg found senior officials within the agencies were passing on funds without written ministerial consent.
The ANAO, in its audit of the financial statements of government agencies, reported two potential "significant legislative breaches" with National Partnership payments, which prompted the question from ACT Labor senator Katy Gallagher in December.
Treasury then found 25 potential breaches over the 2019-20 and 2020-21 financial years, implicating four Coalition ministers who had not properly delegated payment authorisations to the departmental figures.
It is understood ministers can delegate authorisation of payments to senior executives. However in these instances, the process of relinquishing those responsibilities to the bureaucrats were not followed.
Agriculture Minister David Littleproud, Health Minister Greg Hunt, Financial Services Minister Jane Hume and Tourism and Trade Minister Dan Tehan all allocated funds through NP payments which were not properly delegated to agency officials.
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Treasury identified the potential breaches in early 2021, prompting a review of the existing risk assessment framework implemented across the federal public service.
"For each of these payments, Commonwealth agency senior officials certified that agreement milestones were achieved and provided representations to Treasury that appropriate ministerial authorisations existed," the response from the Treasurer read.
"The assessment that milestones were achieved was correct, however, it was subsequently identified by Treasury that these senior officials did not have written ministerial authorisation to exercise this function on the minister's behalf."
Only the High Court has the authority to determine whether the flagged payments breached the constitution.
Seven payments equating to $42.6 million through the pest and disease response program under the responsibility of Mr Littleproud possibly breached section 83.
They were related to projects funded in Victoria, Queensland, Western Australia and Northern Territory.
A further $7.3 million for horticultural netting in South Australia, also the responsibility of the Agriculture Minister, has also been called into question.
In Mr Hunt's portfolio, 10 payments totalling $26.7 million were flagged as possible constitutional breaches.
The funding was for projects across the country related to clinical trials, community health, specialist dementia facilities and aged care.
Another $140,000 in funding for Moneysmart teaching in the ACT has also been pinged as a possible breach, for not getting proper authorisation from Senator Hume.
Six payments for tourism projects in Queensland, Western Australia and Tasmania equating to $8.9 million are also implicated.
"The Treasury has worked with the four Commonwealth agencies involved in the potential breaches to ensure written ministerial authorisations for senior officials to assess the achievement of project milestones on the minister's behalf now exist for all funding agreements," Mr Frydenberg's response read.
Treasury's review will require agencies to provide written evidence ministerial authorisations are in place as required.
