Australia | NSW Ombudsman reveals failings in COVID grant compliance audits

A NSW Ombudsman report has identified shortcomings in the design and implementation of the audit program for COVID grants. The audits were administered by Service NSW (SNSW) and Revenue NSW (RNSW).  

Tabled in NSW Parliament on 28 April 2026, the Investigation into the compliance audit program for COVID grants report identifies unfairness in outcomes for audited grant recipients, and highlights the importance of having clear and comprehensive frameworks in place prior to the commencement of audit programs.   

Key highlights:

• In 2021, 3 state Government grants were introduced to help keep businesses afloat and their staff employed during the COVID-19 pandemic. The grant programs ultimately provided over $10 billion in financial assistance to nearly 300,000 businesses in NSW over a 3-month period.  
• While agencies faced immense time pressure during the initial rollout, the design of the grant delivery program led to a large number of applications being incorrectly approved for grants.
• This investigation was prompted by complaints from grant recipients who started receiving repayment demands from 2022.
• Key findings include the failure to develop a comprehensive audit framework prior to the commencement of audits and the failure to apply policies consistently and exercise discretion reasonably, leading to inconsistencies in processes and inequitable outcomes. 
• The report has made 7 recommendations aimed at improving future audit programs by increasing transparency, establishing a compliance methodology from the outset, ensuring consistent application of policies, and providing clear and customer-centric communication.  
• It also recommended that SNSW conduct a review of certain cohorts of auditees to identify any cases where debts should now be waived, including for those who had demonstrated financial hardship.

Please click here to read the media release. The NSW Ombudsman's report can be accessed via this link.

Source: The Office of the Ombudsman New South Wales, Australia