The Government today dumped its troubled Green Loans scheme, after releasing three independent reports highly critical of how it was administered, and announced a replacement Green Start program.
Climate Change Minister Penny Wong said the Government would phase out the Green Loans program and begin Green Start "later this year".
"In the meantime, energy assessments will continue to be delivered under the current Green Loans arrangements," she said.
'Widespread lack of compliance' with procurement requirements
An independent review by KPMG partner and former senior Victorian bureaucrat Patricia Faulkner found "a widespread lack of compliance with the principles, guidelines and regulations relating to procurement" in the roll-out of the Green Loans scheme.
"The pressure to achieve outcomes within tight timeframes appears to have led to the adopting of 'short cuts' to deliver the program," her review says.
Similarly, a review by Resolution Consulting identified "a number of key failures".
"These can be summarised as lack of control over the number of assessors, poor financial controls for the program which allowed regulatory breaches, poor management controls, faulty program design and inadequate procurement controls."
A third review, by Protiviti, noted that none of the staff on the Green Loans team had received any formal procurement training.
In a combined response to the Faulkner review of the Green Loans scheme and to the Hawke review of the insulation scheme, the Department of Climate Change and Energy Efficiency "commits itself to addressing the shortcomings in program administration".
The Department took control of both schemes, which were originally in the hands of the Federal environment department, in March.
Two-stage process for Green Start
The replacement Green Start program will comprise "grants in two rounds", according to a statement released this afternoon by Senator Wong.
In the first, the Government will fund the delivery of energy assessments for households, with the grants awarded to "accredited assessors and organisations who can deliver high quality assessments through a competitive process".
In the second, the Government will seek proposals from NGOs and other organisations "to provide practical help to low-income and disadvantaged Australians to improve their energy efficiency".
Applications for funding under both rounds "will open later this year", Senator Wong said.
Green Start had been developed taking into account the findings of the three Green Loans reviews, she said.
The Government established the Green Loans program in 2008-09 with an original budget of $300 million and goals of carrying out 360,000 household assessments and providing 200,000 subsidised loans.
It slashed the budget to $175 million in the 2009 Budget and ended the loans component of the program in March.
