Victorian Auditor-General’s report
23 March 2011

Local Community Transport Services: the Transport Connections program 
Audit summary
The Transport Connections program (TCP) is an $18 million, four-year initiative (2006–2010) that assists regional and rural communities to work together to improve access to local transport. It seeks to address transport disadvantage by enabling communities to develop local solutions that make better use of existing public, private and community transport options. Projects are mainly funded to hire coordinators who assist in identifying and implementing local initiatives. Grant funds are managed by a nominated fund manager organisation, typically the local council, in accordance with a funding agreement.
The TCP is managed by the Department of Planning and Community Development (DPCD) in partnership with the Department of Transport (DOT), Department of Human Services (DHS) and Department of Education and Early Childhood Development (DEECD). This partnership approach recognises the complex nature of transport disadvantage, which can affect participation in everyday activities. It also acknowledges the need for cooperation between government departments, local agencies and the community to develop sustainable solutions. The TCP has provided funding and support to 32 projects covering all rural, regional and outer-metropolitan municipalities in Victoria. 
DPCD is the lead agency for the TCP. However, DOT manages $4.19 million of the program budget as a Flexible Fund that all projects can apply to for help in implementing small-scale, localised initiatives. A multi-agency steering committee comprising DPCD, DOT, DHS and DEECD is responsible for setting the broad parameters of the program, and for progressing policy responses to systemic barriers faced by local projects to overcoming transport disadvantage. 
This audit examined whether the TCP is being managed effectively. It considered whether effective partnerships were achieved, and if appropriate solutions to local community transport needs were delivered. It examined planning for, and oversight of, the TCP, and a sample of four projects with grants administered by:
·	City of Greater Geelong
·	Macedon Ranges Shire Council
·	UnitingCare Ballarat
·	Wellington Shire Council. 
Conclusions
The TCP was designed to build capacity for local communities to work together on overcoming transport disadvantage. There is, however, little evidence to demonstrate the extent to which access to local transport has been improved because of the program’s weaknesses in governance, oversight and monitoring. 
Although the program depended on collaboration between state, local government and community agencies, DPCD did not effectively coordinate with DOT and other partnering agencies in managing and overseeing the TCP. Limited community engagement and weak oversight by local steering committees, and by DPCD, was evident at three of the four projects examined. DPCD did not resolve emerging issues in a timely manner, nor did it adequately enforce accountability provisions with funded projects. DPCD has acknowledged these issues and has since acted to strengthen its management of the TCP.
Transport Connections projects have implemented actions that have improved local transport options. However, as performance monitoring and evaluation of the program focused on activity rather than impact, DPCD cannot demonstrate the extent to which desired outcomes have been achieved.
Findings
Assuring effective partnerships
DPCD designed a sound governance and accountability framework for the TCP, but did not effectively implement it. The framework focuses on strengthening communities and on promoting effective partnerships between stakeholders, including ownership for local initiatives. 
However, inadequate community engagement, including inadequate oversight by the local steering committee and DPCD, was evident for between 18 months and two years at three of the projects examined. Consequently, while each project sought to implement community priorities, it was not evident that local activities were being effectively managed or were adequately addressing local needs.
As a condition of funding, DPCD prudently established a requirement for local TCP stakeholders to enter into partnership agreements to demonstrate their commitment, including a shared vision for the project. Nevertheless, for two of the four projects examined, finalised partnership agreements were not in place.
Limited cross-government coordination for the TCP also hindered achievement of the program’s objectives. The TCP multi-agency steering committee, chaired by DPCD, met infrequently and underestimated the complexity of working across government. As a result it made little progress in addressing systemic barriers. Local TCP initiatives were also funded by DOT from the $4.19 million Flexible Fund without sufficient input from DPCD or other partnering agencies.
Both DPCD and DOT actively supported communities applying for TCP funds by working extensively with them to cultivate sound partnerships and funding proposals. However, records of how TCP and Flexible Fund applications were assessed were not sufficient to demonstrate that their funding decisions were soundly based, consistent and fair.
In this regard, DPCD contended that the need for consistency in assessment was less relevant because each community that applied was different, and grants were not competitive. However, these factors do not remove the obligation to demonstrate fair and equitable assessment of applications against the program’s objectives before committing public funds.
Encouragingly, though, DPCD’s 2010 statewide good practice guidelines for grant administration now address this obligation. The guidelines emphasise the importance of consistent and fair decision-making irrespective of the grants process used—including the need to clearly document and record the basis of all grant assessments and funding decisions. 
Performance monitoring and accountability
Funding agreements with TCP grant recipients include sound accountability provisions. However, DPCD did not enforce them effectively, or adequately monitor projects to assure timely action in response to emerging issues. 
Three of the projects examined did not meet important milestones linked to payments and, for between 18 months and two years, none of these had implemented effective governance arrangements. DPCD did not adequately follow up to resolve these shortcomings until early 2010, yet it continued to fund them even when conditions had not been met.
In so doing, DPCD was motivated by a desire to improve the capacity of projects and achieve continuing support for local initiatives given payments were mainly for the coordinator’s salary. However, by paying projects regardless of their performance DPCD reduced accountability and rendered funding agreements obsolete. Although DPCD sought assurance of adequate performance by attending local steering committee meetings, its participation was intermittent and not sufficient to achieve effective monitoring and accountability for funds provided.
A significant challenge for DPCD was the turnover of staff at its central and regional offices. This affected the knowledge and continuity of key staff and, at times, the department’s capacity to manage program requirements. 
DPCD has acknowledged these difficulties and initiated actions to strengthen its oversight and performance monitoring activities for the TCP. Key actions include clarifying the respective roles and responsibilities of its central and regional office staff to support and monitor projects. 
Evaluating Transport Connections program outcomes
DPCD developed an evaluation framework for the TCP at its inception. However, the data received to date has focused mainly on project activities rather than on outcomes achieved. This limits its ability to provide useful information about the impact of initiatives. While recognising that evaluating the outcomes of community strengthening programs is difficult, this fundamental weakness means TCP outcomes can not be reliably assessed. Recent DPCD reviews of the TCP based on this information have inherent limitations. 
While these reviews indicate the TCP has created opportunities for community involvement in local governance, including new partnerships and initiatives designed to enhance transport options within disadvantaged communities, further work is needed to assess the extent to which they have improved access to local transport.
Recommendations
Number	Recommendation	Page	
1.	The Department of Planning and Community Development and the Department of Transport should strengthen and better document grant assessment processes so all funding decisions can be shown to have been appropriately and equitably considered.	20	
2.	The Department of Planning and Community Development should strengthen project governance and accountability by:
·	monitoring that partnership groups manage local projects effectively in accordance with the community‑focused Transport Connections program governance model
·	establishing reliable arrangements for ongoing, effective cross-government coordination for the Transport Connections program
·	enforcing the accountability requirements of funding agreements.	33	
3.	The Department of Planning and Community Development should strengthen the Transport Connections program evaluation framework by further developing arrangements to measure and progressively report on the achievement of project and program objectives.	42	
Submissions and comments received
In addition to progressive engagement during the course of the audit, in accordance with section 16(3) of the Audit Act 1994, a copy of this report was provided to the Department of Planning and Community Development, the Department of Transport, the City of Greater Geelong, Macedon Ranges Shire Council, UnitingCare Ballarat and Wellington Shire Council with a request for submissions or comments. 
The City of Greater Geelong, UnitingCare Ballarat and Wellington Shire Council acknowledged the request, and elected not to make a submission. Submissions were received from the Department of Planning and Community Development, the Department of Transport and Macedon Ranges Shire Council.
Agency views have been considered in reaching our audit conclusions and are represented to the extent relevant and warranted in preparing this report. Their full section 16(3) submissions and comments, however, are included in Appendix A.