Council's $10 million application for Bendigo gallery upgrade yet to be assessed as federal fund faces uncertain future

The report stems from an audit of the BBRF, and found the $1.38 billion grants program was only partly consistent and effective.

The Australian Nation Audit Office put a microscope over the BBRF to assess the program's effectiveness and consistency under the Commonwealth Grant Rules and Guidelines following concerns the program favoured Liberal and National seats.

Key shortcomings in the BBRF design include the decision-making panel using its discretion to override the results of a merit-based assessment process.

It was also found the fund did not transparently set out the membership of the decision making panel.

The report did find appropriate funding recommendations were provided for three of the five completed rounds.

A spokesperson for federal infrastructure, transport, regional development and local government minister Catherine King said the Australian government is carefully considering the report's findings.

"(Ms King) is carefully considering the findings of the recent ANAO report into the Building Better Regions Fund, given the seriousness of the findings that the former Government actively ignored grant guidelines for its own purposes," the spokesperson said.

"As a result, the Australian government is carefully considering the best way forward for regional grants funding.

"The Australian government is committed to developing Australia's regions, including by delivering funding for projects that create jobs, build opportunity and unlock economic growth and productivity and will work cooperatively with the Victorian Government on infrastructure needs for the Commonwealth Games."

Since its foundation in 2016, the BBRF has awarded $1.15 billion to 1293 projects across five rounds of funding.

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The BBRF was designed as an open and competitive grants program that could drive economic growth and build stronger regional communities

Bendigo MP Lisa Chesters said the audit report was damning for the former government.

"These findings highlight some serious problems with the BBRF program and how the odds were really stacked against Bendigo projects, regardless of merit," Ms Chester said.

"My understanding is the Bendigo Art Gallery redevelopment project is one of 850 applications for Round 6 of the BBRF. Applications for this funding round have not yet been assessed."

A sixth funding round open in February and was underway when the audit was conducted. Successful applications were initially due to be announced between July and August.

Application for the sixth round of funding have not been assessed.

Among the hopeful projects for the sixth round of the BBRF was the City of Greater Bendigo's application for $10 million in funding for the Bendigo Art Gallery development.

"At this stage we can confirm we did apply for ($10 million) of funds for the gallery and are yet to hear about the outcome of the application or results of the audit," a CoGB spokesperson said.

"We are looking for other funding opportunities across a range of areas including arts, education and First Nations.

"Our advocacy efforts also continue through discussions with federal member for Bendigo Lisa Chesters and seeking meetings with relevant ministers and departments at the federal level."

The audit report did highlight positive aspects of the BBRF such as clear guidelines for grant applications, an open competitive application process was being employed and relevant and appropriate eligibility requirements installed.

The process of the Business Grants Hub assessing applications based on merit was also considered a positive of the program.

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