Data retention grants scheme could face audit

The Australian National Audit Office (ANAO) is mulling an audit of the government’s Data Retention Industry Grants Program.

The ANAO yesterday released its draft annual audit work program for the coming financial year.

The data retention grants program was intended to help telcos defray the capital costs of establishing compliance with the government’s mandatory data retention regime.

The 2015-16 federal budget set aside $131.3 million over three years for implementing data retention, which included around $128 million for grants.

That figure was significantly less than the estimate of a government-commissioned PricewaterhouseCoopers study, which found the cost to industry of implementing the data retention regime would likely be between $188.8 million and $319.1 million.

The data retention legislation was passed in early 2015, with the regime beginning in October 2015. Telcos were able to defer compliance until April this year.

The grants program was launched at the start of 2016, but it wasn’t until September 2016 that the government revealed how funds would be disbursed to individual telcos.

The government revealed that 180 telcos would receive funds under the program. The Attorney-General’s Department (AGD), which administered the program, said that Telstra would receive $39,915,538 to help with its costs, while Vodafone and Optus would receive $28,848,519 and $14,763,859, respectively.

Next in line for funds was Vocus ($3,444,036, including $1,618,436 for M2), MyNetFone ($3,004,000), TPG ($2,225,541, including $814,581 for iiNet), Broadband Solutions ($2,201,006), Exetel ($1,803,778), and Message4U Pty Ltd ($1,264,800). NBN was earmarked to receive $1,067,515.

The government faced criticism from telco group Communications Alliance about the lengthy wait for grants to be distributed to telcos. The group’s CEO, John Stanton, in April called for regulatory restraint by government as telcos struggled to comply with the regime.

Delays associated with the grants program “put many service providers under immense pressure to complete the work to enable them to comply with this onerous regime within the deadline,” Stanton said.

“The government should acknowledge that these delays have made timely compliance more difficult to achieve.”

The ANAO said its proposed audit would examine the AGD’s “design of the Data Retention Industry Grants Program, including performance measurement and reporting arrangements.”

“The administration of the grants program was contracted out by the AGD to AusIndustry (part of the Department of Industry, Innovation and Science, and one of two Commonwealth grant hubs),” the ANAO noted.

The ANAO is accepting feedback on its draft program of work until 25 May.