A performance audit of the design and establishment of the Regional Investment Corporation (RIC) has found it to be largely effective.
The Department of Agriculture, Water and the Environment set up the RIC in 2018 with $4 billion in Commonwealth financing to streamline the administration of farm business and water infrastructure concessional loans.
Auditor-General, Grant Hehir said the RIC was at the early stages of its roll-out of the farm business loans and other products.
“The design and establishment of RIC was largely effective.” Mr Hehir said.
“To optimise the outcomes from its products, RIC needs to improve its governance via enhanced risk management and developing a compliance and assurance strategy,” he said.
“The Department partially applied lessons from prior programs in developing the RIC and managed constitutional constraints on Commonwealth loan delivery.”
Mr Hehir said however that it did not analyse the effectiveness of prior loans programs and more robust data should have been used to forecast loan uptake and default rates.
“The Department followed legislative requirements to establish RIC, obtained stakeholder input on farm business loan settings and provided input for the Board to decide on the external service provider,” he said.
“In establishing RIC, the Department developed key governance structures and documents for RIC to support its initial operations.”
He said that to ensure sound governance, the RIC needed to enhance its risk management and oversight of external service provider data.
“Improvements are needed to the arrangements for performance management of the loans, including determining methodologies for each performance measure,” Mr Hehir said.
The audit team was Katherine Lawrence-Haynes, Kara Ball, Shay Simpson, Carissa Chen, Jacqueline Hedditch and Michael White.