Flood Relief and Recovery

Conclusions

Leadership

Emergency management in Victoria has been affected by a siloed approach in the past which worked against achieving vital collaboration between stakeholders. Yet the model chosen to lead the state relief and recovery efforts in 2010–11 perpetuated the model of multiple stakeholders each responsible for their own piece of the recovery task. A whole-of-government committee structure was established in March 2011 to manage flood relief and recovery. However, funding was proposed and administered separately by nine of the 10 departments involved. Without clear authority and with funding controlled by each department, the key governance committee, the SFRG, inevitably had a coordination rather than a leadership role.

As a result there were lost opportunities for collaboration and the nine departments administering funding all had different arrangements, application processes and points of contact. This resulted in a fragmented approach, with 45 separate programs offered by the nine funds holders. The number of programs and the different, and often complex, application processes attached to each was confusing to local government and to affected communities at a time when they were dealing with the distress and damage caused by the floods.

As the SFRG's authority to lead, intervene and change what departments were doing was constrained, some important issues requiring action were not addressed. These included the need to better support the councils that were struggling due to their limited capacity, and the need for long-term recovery plans to be developed and followed. In addition, no overarching evaluation of the floods relief and recovery effort was ever commissioned, although evaluations of a number of individual programs were conducted.

Flaws in the governance of relief and recovery were clearly a function of the model chosen and not linked to the conduct of committee members who diligently oversaw relief and recovery programs run by departments and also fulfilled monitoring and risk management responsibilities.

The lack of evaluation is of major concern as it means that there has been no mechanism in place to capture what was done well and might be replicated in the future and what was done poorly. This means there is no overall assessment of effectiveness and no guarantee the state will not continue to use flawed strategies and programs.

The audit also noted the comprehensive review undertaken by Neil Comrie AO, APM in the aftermath of the floods. The Review of the 2010–11 Flood Warnings and Response, issued in December 2011, identified where improvements are needed to assist local government and community recovery and made 93 recommendations across a broad range of preparation, response and recovery matters.

The Victorian Government has responded to 31 of the recommendations, which principally relate to flood warnings. It has yet to respond formally to the remaining 62 recommendations, including those relating to the adequacy of relief and recovery arrangements and the adequacy of service delivery and community resilience. The Department of Justice (DOJ) has advised that recommendations will inform future emergency management changes and activities. It is imperative that these recommendations, and the issues that they illustrate, not be overlooked and be incorporated into future recovery planning and practices.

The audit notes that the new governance arrangements set out in the December 2012 White Paper seek to establish clear leadership through the State Crisis and Resilience Council—to be chaired by the Secretary of DPC—and the creation of Emergency Management Victoria as the new overarching body for the state's emergency management sector. These are important and necessary reforms but also need to take into account lessons learnt from past emergency events.

In addition to the SFRG, the central agencies DTF and DPC played a key role liaising with the Commonwealth, especially DTF in the case of betterment under the NDRRA. There were lost opportunities to obtain Commonwealth funding to improve, or better, the disaster resilience of public assets as DTF did not provide clear guidance to councils and practical assistance to help build the business cases needed to win funding.

However, a number of councils and departments have noted the proactive approach taken by DTF in contacting councils to help them apply for financial assistance. This is commendable, especially given that, as a central agency without a regional presence, DTF did not have existing networks and relationships in place. This proactive approach should be maintained in future disasters.

Relief and recovery efforts on the ground

In addition to the central governing committee, the SFRG, there were various committees at the regional and local level, many of which functioned well. But overall, the number of committees at a state, regional and local level created a complex and unwieldy structure, which was difficult for affected communities to understand.

The 15 relief and recovery programs examined in this audit provided appropriate coverage of social, economic and environmental needs. The programs delivered much required relief and recovery support to the disaster-affected communities. There were no apparent gaps where needs were not answered by program initiatives. However, the fragmented approach from nine departments, with each managing funding and designing their own programs, resulted in considerable differences in application processes and eligibility. This created a confusing set of program rules. Local government and communities also had to deal with many different departmental staff fronting the various initiatives, which added to confusion and frustration in some communities already under considerable stress following the disaster.

Despite these difficulties most local councils fulfilled their part in relief and recovery activities effectively, especially given the uncertainty about the true extent of damage concealed by flood waters, and the capacity issues in some councils. Much of the success on the ground can be attributed to local councils working together and the tireless work done by volunteers, service groups, charitable organisations and community service organisations. This experience shows that—while good planning and procedures are important, and familiarity with those procedures and staff training will continue to be critical to how well emergency response, relief and recovery occurs at the local level—relationships and shared knowledge will also play a very powerful role in determining success.

Outlook for the future

Recovery is a long-term and complex process and in most flood affected areas the recovery process is still underway. It is important that effort and priority is maintained for longer-term recovery planning so that communities' resilience, confidence and economies can be rebuilt along with their physical infrastructure.

Looking further into the future, the government has clearly signalled that the way in which emergencies are managed needs to be reformed if we are to meet the challenges of more severe and frequent disasters. The White Paper which sets out the government's reform agenda for emergency management is a key plank in improving how the state manages emergencies of all kinds. Reform involves improvement and innovation based on identified weaknesses in current arrangements. If a true reform agenda is to be enacted then old problems in emergency management, which were not addressed in the floods relief and recovery efforts, will need to be tackled.

Findings

Governance and planning

The governance model, based on the SFRG, and using existing departmental structures and arrangements, did not encourage either collaboration or coherence across the suite of programs administered.

The SFRG actively monitored the management of risks to the recovery program and worked well as a coordination body but did not have clear authority over the nine departments, which each administered their own funding and programs. This meant it met some of its terms of reference in relation to monitoring and reporting, coordination and risk management but did not have power to perform a leadership role. Further, it missed opportunities to improve relief and recovery outcomes overall. The SFRG was slow to intervene to provide extra support to councils with lower capacity levels. Further, it did not make sure longer-term planning was undertaken and has not yet commissioned an overarching evaluation of the suite of relief and recovery programs and the broader recovery effort.

At the municipal level the governance and administration arrangements worked well, but roles and responsibilities between state departments and municipalities were often unclear.

A major input into how relief and recovery priorities are set is rapid impact assessment (RIA). Under RIA, data is collected in the 48 hours following an incident to help gauge the nature and extent of damage. Although RIA processes will always be imprecise, especially in flood situations where much of the damage is hidden or may develop over time, the model should be reviewed to address some clear shortcomings.

The state's relief and recovery activity is focused on the short to medium term. While planning for implementation was sound overall, it is not clear how the state plans to achieve its long-term goals as there is little long-term planning for recovery in place.

Issues impacting on implementation

Recovery efforts were affected by interpretation and application of an NDRRA funding rule around betterment. As a general rule, funds can be used to restore or replace infrastructure to pre-disaster standard, but not to create something better than had previously existed. This created a problem for local government seeking to rebuild in a way that improved critical public infrastructure. It was, however, possible for local government to access Commonwealth funds if the proposed works were cost effective and would increase disaster resilience. Rules around accessing funding for betterment were not well understood by councils.

Negotiating the rules and application processes was testing for local government, especially at a time when it was dealing with many other challenges arising from the floods. Councils needed assistance from DTF to identify and process betterment proposals. Evidence shows that DTF's advice and support to councils on betterment was not sufficiently timely. However, this was partly due to the need for ongoing discussions with the Commonwealth to clarify the interpretation of the betterment funding principle. As a consequence of DTF not being able to provide timely advice, some potential local government proposals may not have gone forward and the state and local government may have foregone Commonwealth funding.

A further implementation issue relates to local government capacity. Councils with a smaller rate base and problems attracting appropriately skilled and experienced staff faced greater challenges in supporting their communities and undertaking relief and recovery, especially major road and infrastructure repair works. Currently, as a result of these difficulties, 15 councils may not be able to expend their funding by the NDRRA cut-off date of 30 June 2013.

There are also significant local government success stories, where councils worked together, with larger councils 'buddying' smaller ones or those outside the damage zone helping those coping with flood impacts. These collaborations were initiated without state department intervention. They illustrate the importance of social capital—including pre-existing relationships and knowledge that can be shared—in emergency response at the local level.

Community programs

Communication about programs could have been better. There was no one source of authoritative advice on the relief and recovery programs and this added to the confusion created by multiple departments and programs. Of the 15 programs reviewed, when each is considered individually, overall planning was competently conducted and in many cases community access to funds was also reasonable. However, when considered as a set, differing eligibility rules, application rules and governance frameworks created confusion at the local community level.

Short-term community relief and recovery programs were well implemented and generally well received by affected communities. Programs with more complex recovery objectives were less successful. In some cases, unnecessarily complex rules for access created problems that could have been avoided. For example, the disproportionate amount of application and approval processes under the Community Recovery Fund was neither helpful nor required for accountability purposes, and funding arrangements should have been streamlined.

The aggregate administration burden created by 45 program and nine departmental administrators was also significant.

Meeting monitoring obligations

Victoria has met its monitoring and reporting requirements under the National Partnership Agreement. Monitoring and reporting mechanisms were sufficiently adequate to oversight and manage the most pressing issues faced by local councils and communities. Of the 15 initiatives examined, funds acquittal, monitoring and reporting were timely and appropriate.

Nevertheless, Victoria has not met its financial reporting obligations under the NDRRA as it is yet to provide an acquittal of funds spent in respect of the 2010–11 floods.

The Commonwealth has advanced Victoria $500 million. At the time of the audit the Commonwealth is liable for approximately $350 million of the total estimated cost of the 2010–11 relief and recovery effort. This calculation is based on the cost sharing rules under the NDRRA. However, DTF has been given approval by the Commonwealth to use the unexpended balance of the $500 million advance for other eligible natural disasters.

Recommendations

Recommendations have been directed to departments or functional areas taking into account machinery-of-government changes, which come into effect on 1 July 2013, as well as the new emergency management arrangements arising from the December 2012 White Paper on Victorian Emergency Management Reform.

Two recommendations are directed to DPC, in the first instance, in light of its central agency role in overall emergency management. The December 2012 White Paper sets out changed organisational and administrative arrangements for the emergency management function within DOJ.

DOJ will be establishing Emergency Management Victoria (EMV), which will be responsible for a range of emergency management functions including relief and recovery efforts. The audit contains two recommendations which should be directed to the EMV when it is set up and its responsibilities are made clear. In the interim, this audit has directed these recommendations to DPC in light of its role in providing high‑level advice on security and emergency management policy issues and in undertaking strategic policy development projects.

Due to the machinery-of-government changes:

• one recommendation is directed towards Local Government Victoria, which will be a part of the new Department of Transport, Planning and Local Infrastructure
• two recommendations are directed towards Regional Development Victoria, which will be transferred to the new Department of State Development, Business and Innovation.

Recommendations

1. The Department of Justice should review the current model for rapid impact assessment to improve the quality of the information collected.
2. Local Government Victoria should lead the design and implementation of strategies to support councils to further develop social capital needed for recovery.
3. The Department of Human Services should develop an improved model for communication for future disasters that provides a single point of information and contact for disaster affected communities.
4. The Department of Premier and Cabinet should develop clear guidelines for departments in designing community disaster relief and recovery programs.
5. Rural Finance Corporation (Department of Treasury and Finance) and Regional Development Victoria should coordinate any future disaster relief and recovery programs for businesses.
6. Regional Development Victoria should implement the recommendations from the Department of Planning and Community Development's review of the Community Recovery Fund to improve the delivery of relief and recovery programs in the future.
7. The Department of Premier and Cabinet should lead:
   • the development of an evaluation framework, based on work undertaken to date by the Department of Human Services, to be used in assessing the impact of relief and recovery programs in the recent floods and in future disaster events
   • an evaluation of the impact of relief and recovery programs in the recent floods, using this framework.

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 departments of Premier and Cabinet, Treasury and Finance, Sustainability and Environment, Primary Industries, Justice, Business and Innovation, Human Services, and Planning and Community Development with a request for submissions or comments. 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 are included in Appendix D.

Relevant extracts from the report were also provided to the three councils where field work was conducted for this audit, in order to confirm the accuracy of information used. These were Loddon Shire Council, Campaspe Shire Council and Northern Grampians Shire Council.

1.1 The 2010–11 floods

Between September 2010 and March 2011 Victoria experienced some of the most extensive and damaging floods in the state's history. These floods affected 70 of the 79 Victorian local government areas, with 16 of them very severely impacted.

Major damage was caused to whole communities, roads, rail networks, community infrastructure and the natural environment. Some communities were inundated several times, with repeat damage to homes, businesses and the agricultural sector.

1.2 Commonwealth and state funding agreements

Under the obligations and provisions of the Natural Disaster Relief and Recovery Arrangements (NDRRA), the Commonwealth provides financial assistance to states and territories following disaster events. Victoria's mechanism for distributing NDRRA funds is through the Natural Disaster Financial Assistance program, which mirrors the rules and requirements of the NDRRA.

In the past, the Commonwealth's share of relief and recovery costs was paid to the adversely affected state or territory after it had expended funds. However, in the 2010–11 floods, the Commonwealth agreed to advance funding of $500 million, on the condition that a National Partnership Agreement (NPA) was signed which bound Victoria to certain actions. This was signed in May 2011.

The NPA required Victoria to develop a Flood Recovery Work Plan (the Work Plan) in consultation with the Commonwealth. The Work Plan:

provided information on Victorian procurement policies

• outlined a set of projects to assist with reconstruction and/or recovery
• outlined project plans and strategies for projects over $5 million.

The Victorian Work Plan targets the following priority areas:

• reconstruction—supporting communities to rebuild major essential public assets
• people and communities—assistance and services to support individuals and communities to manage their own recovery
• the economy—support for business and employment in flood-affected areas.

1.2.1 Funding allocations

As at 31 January 2013, the total estimated cost for relief and recovery was $971 million. Figure 1A shows the distribution of the overall flood relief and recovery funding.

Figure 1A
Allocation of flood relief and recovery funding

Note: The NDRRA categories are subject to a cost-sharing arrangement between the state and Commonwealth governments. The state-funded category is wholly state funded.

Source: Victorian Auditor-General's Office analysis of departmental documentation

1.2.2 Insurance

Each Victorian department has disaster insurance, and, as at 31 January 2013, approximately $70 million has been reimbursed from insurance claims for the restoration or replacement of essential public assets.

A review by the Commonwealth of state and territory insurance arrangements under the NDRRA Determination in September 2012 determined that, overall, when

'...assessed against the qualitative benchmark, Victoria has insurance arrangements that are appropriate, cost effective and that meet the obligations to minimise the financial exposure of taxpayers at both levels of government'.

1.3 Related audits and reviews

1.3.1 Commonwealth-level audits and reviews

Australian National Audit Office

The Australian National Audit Office (ANAO) conducted three audits on key aspects of the NPAs signed with Victoria and Queensland for the 2010–11 floods. They included:

• separate audits of Victoria and Queensland to assess the effectiveness of the Australian Government Reconstruction Inspectorate (the Inspectorate), in providing assurance that value for money is being achieved in recovery and reconstruction in Victoria, and in reconstruction in Queensland.
• assessing the extent to which the Work Plans required under the NPAs were prepared, and appropriate monitoring and reports were provided in accordance with the NPA.

The Australian Government Reconstruction Inspectorate

Each month, Victoria reports to the Inspectorate on the progress of recovery and reconstruction. As at the end of December 2012, no value for money reviews had been completed for Victorian projects, which means that the Inspectorate is currently unable to assure the Commonwealth that value for money is being achieved.

The ANAO's audit report on the Inspectorate's conduct of value for money reviews found that a delay in finalising an operating protocol between the Commonwealth and Victoria has affected the Inspectorate's ability to scrutinise projects. The protocol was finalised in August 2012, and endorsed by Victoria in December 2012.

Victoria has requested an extension to the NDRRA funding period to 2013–14. It is likely that this will require Victoria's agreement to allow increased oversight by the Inspectorate, particularly for projects with a value greater than $5 million which, under the NPA, are subject to a value for money review.

1.3.2 State-level reviews

The 2009 Victorian Bushfires Royal Commission and the Review of the 2010–11 Flood Warning and Response (the Comrie Review) have identified that some of the current emergency management structures in Victoria are ineffective. While much of the Comrie Review is focused on flood warnings and the emergency response, it also examined and made recommendations on clean-up, recovery and community resilience.

In parallel to this audit, the government has been developing reforms of how it manages emergencies. In December 2012, the government's White Paper on Victorian Emergency Management Reform proposed changes in emergency management governance and organisation design to address a range of issues including coordination of relief and recovery in communities, roles of key stakeholders and streamlining of governance arrangements. This audit identified similar issues.

1.4 Governance arrangements

The governance structure of various Commonwealth and state committees established after the 2010–11 flood events is shown in Figure 1B.

A key committee in this high-level governance structure was the Secretaries' Flood Recovery Group (SFRG), which liaised with the Commonwealth and was responsible for leading and coordinating the reconstruction and recovery efforts across state departments.

SFRG membership included all departmental secretaries, Victoria Police, VicRoads and the Emergency Services Commissioner. It was co-chaired by the secretaries of the (then) Department of Primary Industries (DPI) and the Department of Human Services (DHS).

In addition to strategic leadership and coordination, the SFRG was to identify issues and policy responses, assess progress and evaluate the effectiveness of recovery initiatives.

The SFRG reported to the Security and Emergencies Committee (SEC) of Cabinet which, together with the Budget and Expenditure Review Committee, approved funding on advice from the Department of Treasury and Finance (DTF), Department of Premier and Cabinet (DPC) and SFRG.

The SEC gave direction, developed policy and had oversight of the implementation of strategies and programs affecting security and emergency management issues.

Figure 1B
2010–11 flood recovery governance structure

Source: Victorian Auditor-General's Office based on SFRG documentation.

Each department played a role in relief and recovery. Most initiatives were administered through DTF, DHS, the (former) Department of Planning and Community Development (DPCD), (former) DPI and the (former) Department of Sustainability and Environment (DSE). The roles and key responsibilities of each department are listed in Figure 1C.

Figure 1C
Departmental responsibilities

Source: Victorian Auditor-General's Office.

1.5 The relief and recovery quadrant

Disaster relief and recovery programs are commonly delivered under a quadrant of themes:

• Social—which covers people, health and community
• Economic—which includes businesses, agriculture and other primary industries
• Natural environment—includes parks and natural disaster warning systems
• Built environment—includes community assets, roads, bridges and other infrastructure.

There were 45 programs, including 40 across these four areas and a further five crossing quadrants. Figure 1D shows where each of these programs fit into these themes.

The five programs implemented by the SFRG which operated across all four themes were the:

• flood recovery team
• emergency service organisation response and recovery costs
• Victorian state emergency service response and recovery costs
• whole-of-government flood recovery team
• whole-of-government reporting.

Figure 1D
Relief and recovery activities by theme

Note: RFC denotes Rural Finance Corporation and CMA denotes Catchment Management Authority.

Note: The initiatives in bold are examined in this audit.

Source: Victorian Auditor-General's Office from the May 2011 Flood Recovery Work Plan.

While several reviews and audits have examined various aspects of flood response—see Section 1.3—the area of community relief and recovery has not been substantially reviewed or audited. This audit examined 15 community-focused initiatives of the 45 relief and recovery programs. These 15 initiatives were delivered by five state government departments to help flood-affected local councils, businesses, communities and individuals, as shown in Figure 1E.

Figure 1E
Community relief and recovery programs

	Program	Cost ($ mil)	Description
Department of Human Services
1	Interim Accommodation Plan	2.2	Temporary accommodation for individuals or families whose home was damaged.
2	Personal Hardship Grants	20.1	Payments to individuals to reduce hardship.
3	Psychosocial Recovery	4.7	Staff for counselling, case work support and community forums.
Department of Planning and Community Development
4	Business Flood Recovery Fund	10.0	Grants to medium and large businesses to stimulate job creation and promote economic development.
5	Community Recovery Fund	4.0	Grants to councils and community organisations to restore social networks and rebuild community facilities.
6	Local Government Clean Up Fund	5.0	For councils for initial clean-up and repair.
7	Flood Recovery Officers	2.1	Grants to 32 councils to employ 19 flood recovery officers.
8a	Flood Recovery Community Infrastructure Fund (DPCD component)	8.0	For councils and not-for-profit community organisations for repair and replacement of community infrastructure.
Department of Sustainability and Environment
8b	Flood Recovery Community Infrastructure Fund (DSE component)	22.0	Funds to Crown land reserve committees of management for repair and replacement of community infrastructure.
Department of Primary Industries
9	Apprenticeship Retention Program	1.0	Grants to businesses to support the retention of apprentices.
10	Rural Coordination Officers	0.5	Funding for nine rural coordination officers for a 6-month period to respond to rural farm issues.
11	Rural Financial Counsellors	3.4	Additional senior rural financial counsellor coordinators to assist primary producers and small rural businesses.
12	Flood Response and Recovery (agriculture)	3.6	Services to the agricultural sector to rebuild and recover.
Department of Treasury and Finance - Rural Finance Corporation
12	Clean-Up and Restoration Grants	82.0	Grants up to $25 000 available to primary producers, small businesses and not-for-profit organisations for clean-up, removal of debris and business restoration.
14	Exceptional Disaster Assistance	1.4	Grant and loan packages designed to assist primary producers and small to medium businesses essential to key economic supply chains and regional employment.
15	Concessional Loans	6.0	Loans up to $200 000 to eligible primary producers, small businesses and not-for-profit organisations.
	Total	176.0

Note: The total of $176 million for the 15 community-focused programs is approximately 18 per cent of the total estimated cost of $971 million, which includes a $70 million insurance offset.

Source: Victorian Auditor-General's Office from departmental documentation.

1.6 Most affected local government areas

Six geographic areas were severely affected and require sustained and long-term recovery planning:

• Carisbrook township—Central Goldfields Shire
• Mildura—Mildura Rural City Council
• Creswick township—Hepburn Shire
• Charlton—Buloke Shire
• Grampians—including Halls Gap and Grampians National Park—Northern Grampians Shire
• Gannawarra/Loddon Shires—covers Gannawarra, Loddon, Campaspe, Swan Hill and Buloke (excluding Charlton) shires.

Figure 1F
Flood-affected areas

Source: Victorian Auditor-General's Office based on the Secretaries' Flood Recovery Group Work Plan.

This audit examined the flood relief and recovery activities at the Shires of Campaspe, Loddon and Northern Grampians. These councils and their communities were also dealing with more than a decade of drought, locust plagues and bushfire events prior to experiencing major flooding from September 2010 to March 2011.

They all received Commonwealth and state funding to assist with reconstruction and recovery.

2.1 Introduction

Disaster relief and recovery is complex because it involves multiple players operating as service providers.

Widespread disasters like the 2010–11 floods, which affected numerous areas across Victoria, also involved multiple tiers of government, including head office and regional staff of state departments, as well as local government and non-government organisations such as the Salvation Army and Red Cross.

The 2010–11 floods were not one event, but a serious of overlapping events. Flood waters took time to dissipate in many areas and in some cases heavy rains struck again before the recovery efforts from previous incidents were completed. The leadership and logistics tasks in this context were very challenging.

In the face of this challenge, the foundations of a strong governance structure and good planning needed to be sound, for relief and recovery to be responsive to community needs and efficiently delivered.

An appropriate governance structure should have been established with clear leadership authority and all necessary relationships defined. Community distress and uncertainty faced by affected communities made good governance even more critical.

The 2007 Australian Public Service Commissioner's report Building Better Governance sets out the following principles that need to be considered when establishing governance arrangements:

• strong leadership, culture and communication
• appropriate governance committee structures
• clear accountability mechanisms
• working effectively across organisational boundaries
• stakeholder relationships
• comprehensive risk management, compliance and assurance systems
• strategic planning and performance monitoring.

This Part examines how the central governance model worked and performed in terms of the principles outlined above. It also describes governance arrangements at the regional and local level and examines planning of priority initiatives for financial assistance and support.

2.2 Conclusion

Governance

Although a whole-of-government committee structure was established with identified roles and responsibilities, this governance model had serious flaws in practice. Funding was administered separately by nine of the 10 departments involved, which meant that the Secretaries' Flood Recovery Group (SFRG) had a coordination role, rather than a leadership role, focusing on information exchange and integrating actions rather than on directing recovery efforts.

The nine departments administering funding all had different processes, program rules and points of contact. This did not encourage collaboration or a coherent logic across the suite of programs.

The number of committees at a state, regional and local level created a complex and unwieldy structure, which the affected communities found hard to understand.

As the SFRG's authority to lead, intervene and change what departments were doing was constrained, some important issues requiring action were not addressed. These included the need to better support some councils which were struggling to meet all the demands placed on them, and the articulation of long-term plans.

Despite the limitations of the model, the SFRG did actively monitor and manage the risks to the relief and recovery program, as required under its terms of reference.

Planning

The main implementation planning was in the form of a budget proposal to government prepared by the Department of Treasury and Finance (DTF) and based on bids prepared by each department.

This work gave a sound basis to the subsequent roll-out of programs and more detailed planning which occurred at the regional and local level. A key input to this proposal was rapid impact assessment (RIA) information. However, the RIA model used should be improved to provide better information in future emergency events.

The state's relief and recovery activity was too focused on the short to medium term and there is little evidence of the longer-term planning required to effect full recovery.

2.3 Governance arrangements

2.4 Implementation planning

2.4.1 The importance of good planning

Good planning is essential in emergency events and needs to resist pressures from communities to move too rapidly to service delivery without considering how this is done in the most rational and efficient way to get the best results.

Best practice planning incorporates a clear high level or statewide plan, which is used to develop more detailed operational plans at the departmental and local levels.

2.4.2 Assessing the impact of the damage

The Emergency Management Manual Victoria (EMMV) prepared by the Department of Justice contains policy and planning documents for emergency management in Victoria, and provides details about the roles different organisations play in emergency management. The EMMV requires that:

• the control agency has overall responsibility for instigating and managing the RIA process
• RIAs are carried out in a timely manner
• all agencies involved in the emergency may be tasked to collect, confirm and exchange relevant information.

The OESC in the Department of Justice is responsible for the RIA model used. The objective of the RIA is to capture the nature and scale of the impact on people, community infrastructure, the economy, and natural and built environments during the initial 48 hours of an emergency.

The more quickly and comprehensively that information is collected, the sooner priorities for relief and recovery activities can be informed and appropriate resources provided.

The OESC was responsible for the RIA report using data collected by response agencies on the ground—including the State Emergency Service, Victoria Police and the fire services, as well as the Army.

Impact assessment data collected from 21 to 24 January 2011 was used to inform the report presented to the Flood Recovery Task Force on 25 January 2011. DPI provided a high level report on damage to the agricultural sector.

Significant impacts and issues affecting the municipalities, communities, farms and people shown DPI's report are shown in Figure 2C.

Figure 2C
Rapid impact assessment – significant impacts and issues

Note: Inundation is defined as water over floorboard level. Affected is defined as inundated or isolated.

Source: Victorian Auditor-General's Office.

The RIAs provided key data to inform the government's planning and prioritisation for financial assistance and support to councils and communities. There were inherent problems in risk assessment following the floods as:

• damage was not easily seen or known at the time because much land was still under water
• water damage could continue to degrade buildings and land once it had moved on, particularly mould which became an issue later.

However, there were also problems with the way risk assessment was undertaken and communicated. The councils visited for the audit were not informed or aware of:

• the purpose of the RIA
• what data was collected and why—i.e. the criteria
• how the data would be used
• the standard process for coordinating, gathering, recording and reporting on impact related information.

This led to concerns by councils that flood-related damage in their municipality would be underestimated, and adversely affect funding eligibility and financial assistance. Further, insurance claims assessments were considered inadequate and unable to support prompt lodgement of insurance claims by councils, individuals and the community. Councils were also concerned about the reliability, accuracy, thoroughness and completeness of the RIAs.

Overall, impact data was patchy and inconsistent and without systematic verification processes. Regional staff relied in part on an incomplete data base of farm listings to establish damage to farms, and not all farmers could be contacted.

The Comrie Review found similar issues to those identified during this audit's field work and recommended improvement to the RIA process. However, although the government's response to the Comrie Review was silent on 62 of the 93 recommendations—including those relating to RIA—the government's December 2012 White Paper on Emergency Management Reform includes an action to review the impact assessment system.

Rapid assessment of damage is often imprecise, given the time pressures and incomplete knowledge of impacts, especially in a flood situation where much of the damage is hidden underwater or under road structures.

However, data collection can be improved so that Victoria is better equipped to assess impacts of future emergency events.

2.4.3 Planning for implementation

Pre-existing state and regional flood plans

A State Flood Response Plan, as distinct from a plan which would encompass all phases of emergency management, was in place at the time of the 2011 floods but was of limited use in planning for relief and recovery. The plan had not been updated since 2007. Regional plans had also not recently been reviewed.

The Comrie Review commented on the fact that regional plans merely copied the information contained in the state plan, without attempts to customise it to local conditions. It also found that municipal plans for emergencies were incomplete or draft at the time of the floods.

Pre-existing plans therefore provided little assistance for relief and recovery following the 2011 floods.

Flood recovery work plan priorities

The Work Plan was completed as a threshold requirement rather than as a part of any real planning for implementation. It prioritises programs, such as the clean-up fund, personal hardship grants and community recovery fund. However because the Work Plan was completed six months after the floods, many of these programs were already being implemented.

The real planning for implementation was based on RIAs, but also informed by:

• emergency relief requirements under the Emergency Management Act 1986 and EMMV, such as for personal hardship grants
• initiatives that were deemed to be successful and rolled out previously at the time of bushfires and drought, such as the Apprenticeship Retention Program.

DTF, on request from the SFRG, prepared a funding proposal for government in March 2011. This sought output funding of $117 million for response and recovery, support for public asset restoration and business recovery, and a further $136 million in asset funding.

The proposal was based on bids prepared by each department, which were reviewed and assessed by DTF in order to develop a final set of initiatives for funding. Total funding approved was less than the aggregate funding sought.

This approach—of each department preparing its own bid and the need for DTF's assessment of these in order to develop a final proposal—is linked to the governance model which saw each of the nine departments controlling their own funding programs.

DTF's funding proposal represents a coherent set of initiatives with appropriate relief programs as well as medium- and longer-term recovery initiatives. This formed a sound basis for the subsequent roll-out of programs and more detailed planning which occurred at the regional and local level.

All councils visited for the audit developed action plans to drive short- and medium‑term relief and recovery and were developing longer-term actions to better prepare for future disasters.

However, there were few departmental plans to support relief and recovery activity. Despite the government's requirement that sustained, long-term plans be developed for the six geographic areas most severely affected, they have yet not been developed.

Recommendation

1. The Department of Justice should review the current model for rapid impact assessment to improve the quality of the information collected.

3.1 Introduction

This audit identified a range of overarching issues in relation to implementation of flood relief and recovery. These issues relate to:

• the fragmented nature of relief and recovery programs
• the timely release of funding
• constraints attached to how Natural Disaster Relief and Recovery Arrangements (NDRRA) funding could be used, particularly in relation to replacing damaged assets with more disaster resilient infrastructure—known as betterment
• the capacity of some local government authorities to deliver their part of the relief and recovery effort
• communication to local councils and to affected communities.

3.2 Conclusion

3.3 The fragmented delivery model

3.4 Funding issues

3.4.1 Release of funding

The fragmented delivery model described in Section 3.3 impacted the release of funding for the flood relief and recovery programs.

Some funding, such as Personal Hardship Grants for individuals, was released straight away and Local Government Clean Up Funding payments of $100 000 were made within 2–3 weeks to the 16 councils most severely affected.

However, despite the early release of specific funding, most took some time to be released. Each department had to prepare budget bids for proposed funding for consideration by government. This meant that funding decisions were not made as quickly as would have been possible under a single submission approach. It forced departments to compete with each other for limited funds and required intensive work by DTF to assess the merits of each submission at a time when efforts could have been applied to other areas of relief and recovery preparation.

Funding for flood recovery initiatives was approved by government at the end of March 2011, some two months after the main flood events. The time taken to release funding adversely affected when local councils and other local service providers could commence recruitment of staff to provide key services, including:

• FROs to take over operational management of local recovery and to relieve council staff who had been diverted from their substantive roles
• case workers and counsellors to provide psychosocial services and support.

3.4.2 Commonwealth funding expenditure

The Commonwealth has advanced the state $500 million. At the time of finalising this report, the Commonwealth is only liable for approximately $350 million of the total estimated cost of the relief and recovery effort. However, DTF has been given approval by the Commonwealth to use the rest of the $500 million for the subsequent disaster events in 2011 and 2012.

The NDRRA determination requires the state to provide the Commonwealth with audited financial statements which acquit the money spent on natural disasters. This is required as soon as practicable after the end of the financial year in which an advance was made, and an extension must be sought if the statements cannot be provided within six months. Financial statements acquitting the 2010–11 NDRRA flood funding had not been prepared by DTF at the date of preparation of this report.

3.5 Constraints posed by NDRRA rules

3.5.1 Betterment

The betterment principle was introduced in the 2007 NDRRA Determination and enables states and local councils to apply to the Commonwealth for NDRRA funding to improve the disaster resilience of essential public assets damaged in natural disasters.

DTF advised that the betterment principle has been complex to interpret and apply, and, as at May 2013, only one betterment project in Australia has been approved by the Commonwealth.

Category B of the NDRRA funding provides for work on public assets that restores or replaces the asset to pre-disaster standard and to a more disaster resilient standard, in accordance with current building and engineering standards. It does not provide for asset expansion or enhancement beyond this. For example, adding lanes to roads damaged in a disaster is not eligible for assistance. Essential public assets are primarily state or local government owned.

The NDRRA can be used for betterment if the state:

• can satisfy the Commonwealth that the betterment proposal is cost effective and that the increased disaster-resilience of the asset will mitigate the impact of future natural disasters
• obtains approval from the Commonwealth before commencing betterment works.

Betterment funding is typically on a 50:50 basis for state assets, and a one-third, one‑third and one-third basis for local government assets.

There was an opportunity for the state and councils to obtain additional financial assistance from the Commonwealth to improve the disaster resilience of important public assets that were being restored or replaced as part of the response to the floods.

However, taking advantage of this opportunity required DTF to play a role in identifying and processing betterment proposals. Evidence shows that DTF's advice and support to councils on betterment was not sufficiently timely. However, this was partly due to the need for ongoing discussions with the Commonwealth to clarify the interpretation of the betterment funding principle. As a consequence of advice not being timely, the state and councils may have missed out on Commonwealth funding.

Councils visited as part of the audit said they considered that there was a lack of advice and guidance available to them on the practical application of the betterment principle in the immediate aftermath of the 2011 floods.

This was particularly in relation to:

• the definition of an essential public asset
• whether the provisions related to all or part of an asset
• whether different approval processes applied according to the amount of funding required
• differentiating asset improvements to mitigate the impact of future natural disasters versus improvements required to meet changes in engineering standards or practices
• differentiating between eligible betterment and an ineligible increase in functionality or capacity.

The December 2011 Comrie Review also highlighted the betterment funding issue as an area of confusion for councils.

DTF advised that betterment was a relatively new and complex form of assistance and that it had worked with the Commonwealth during 2011 to develop some advice to councils on the replacement of essential public infrastructure, including betterment and enhancement. Notwithstanding this, the delays in clarifying the betterment principle meant that DTF was not able to provide authoritative advice to councils and agencies in the immediate aftermath of the 2011 floods.

In addition, the advice on DTF's website in early 2011 in relation to betterment was inconsistent with the definition of betterment found in the NDRRA Determination 2007 causing further confusion for agencies and councils. DTF did not update its website on this issue until June 2011.

The betterment issue featured consistently during the meetings of the Secretaries' Flood Recovery Group (SFRG) during 2011. In March 2011 the SFRG directed that a letter be sent to councils to encourage them to proceed with necessary recovery and reconstruction work, and clarifying funding arrangements for asset betterment. This letter was not sent until late July/early August 2011—some four months after the need was identified.

This lack of guidance made it difficult for councils to understand the conditions of betterment, particularly in relation to restoring roads to be more disaster resilient.

In some cases answers from DTF to several questions from councils were not provided after a period of several months. This lack of clarity, and the time taken to provide information, served as a deterrent to councils who could not delay restoration and rebuilding work indefinitely.

A common issue raised by councils was the installation of culverts and levees in damaged roads, to improve drainage and withstand future flooding. In the case of Loddon Shire, the council self-funded minor betterment works to avoid delay to rebuilding and restoration, however, this may not have been viable for other councils, whose financial capacity was more limited.

In March 2012, DTF issued advice which confirmed costs associated with providing an additional culvert when repairing a road damaged from a natural disaster would be eligible for NDRRA reimbursement, as long as there was an increase in disaster resilience and a net benefit could be demonstrated.

In December 2012, the Commonwealth released new guidance material on betterment as part of the revised 2012 NDRRA Determination to improve the clarity of what betterment means and the process for seeking funding for betterment projects.

Applications for betterment funding

In April 2011 the SFRG directed that a list of all significant betterment projects be developed for the Commonwealth. This list was not finalised and provided to the Commonwealth until September 2011.

The state's proposals included 23 projects with a total cost of $47.3 million. The betterment component of this total cost was $13.3 million. The bulk of the projects were from VicRoads although the largest single proposal related to the Charlton Hospital. Figure 3B shows examples of the betterment proposals.

Figure 3B
Local Government Act 1989 requirements

Source: Victorian Auditor-General's Office from departmental documentation.

There were no council projects included in the list submitted to the Commonwealth in September 2011. This may be due to the delays in providing clear advice to councils on betterment funding. DTF subsequently forwarded betterment proposals to the Commonwealth on behalf of a few flood-affected councils.

At the time of preparation of this report no betterment proposals had been approved by the Commonwealth for Victoria. NDRRA funds to relocate the Charlton Hospital have been approved but this was not under betterment provisions.

DTF advised that it is working with the Commonwealth to develop a more streamlined approach for betterment proposals.

3.5.2 Use of council staff

Councils could not claim recovery works performed by council staff and with council plant and equipment through the NDRRA.

In areas where the capacity for attracting people with the required skills was limited, this slowed the recovery process. This was particularly the case with engineering and skilled construction workers required for road and bridge repair.

3.5.3 Time limits on expenditure

Under the NDRRA, all expenditure must occur within two years after the end of the financial year in which the emergency event occurred. At the time of finalising this report 15 councils were anticipating they would not be able to expend funds within the required timeframe.

There has been no response from the Commonwealth to the submission by DTF in November 2012 requesting a 12-month extension.

3.6 Role and capacity of local government

3.6.1 Role of local government

Local government is an important player in informing and delivering services to its communities. It is asked to perform a significant role in emergency management, but the boundary between its role, and that of state departments, is not always clear. Communities were also confused about local councils' relief and recovery role versus that of government departments.

The floods experience showed that, although local councils largely rose to the challenge of providing relief and recovery, issues around roles persist.

The issue of role clarity is not new. The Municipal Association of Victoria (MAV) raised it in December 2011 in a position paper on the role of local government in emergency management, and in a submission in response to the Green Paper on emergency management reforms in November 2011.

However, the issue has not yet been properly addressed. MAV's involvement as a member of the new State Crisis and Resilience Council may serve to continue to raise role clarity issues.

3.6.2 Recovery capacity and capability

The variation in capacity across local councils, particularly in regional Victoria, is a further ongoing issue. Capacity is linked to rate revenue base and councils' ability to attract necessary skills and expertise.

There were significant differences in capacity across the councils affected by the 2011 floods, yet all were required to play a major role in relief and recovery according to the degree of damage sustained, and irrespective of resource and skill limitations. Some of the most vulnerable councils had large road networks that suffered significant damage in the floods and therefore they faced a challenging management and logistics task in undertaking repair works.

As early as 17 January 2011, the Central Government Response Committee was being briefed about local governments that lacked capability and would need additional support to play their role in relief and recovery. Uncertainty about council capacity and capability to effectively implement recovery activities was identified as a key risk in Victoria's Flood Recovery Work Plan and was regularly discussed by the SFRG.

Specific concerns about the capacity of some councils to undertake the scale of recovery and remediation work required included their ability to hire additional resources funded by the state government, pursuing grants within time lines, and project management of reconstruction works.

The SFRG's role in relation to this issue is discussed in Part 2.

The capacity of councils to undertake recovery tasks continues to be an issue. This affects the roll-out of recovery projects and, in turn, affects the recovery of the affected communities.

3.6.3 Local government response

For the most part, local councils were quick to respond and generally, networks between councils played a strong role in assisting responsiveness. Smaller councils were 'buddied' by larger councils who were able to divert resources in the short term to assist.

For example, the Shire of Campaspe was aided by Moira Shire, and Loddon Shire by the City of Greater Bendigo. Northern Grampians Shire received assistance from the Shire of Yarra Ranges which, while not geographically close, had prior relevant experience in emergency recovery.

This is consistent with the MAV's policy to encourage partnerships between councils to pool resources and offer help to members when required. The experience on the ground also showed that social capital—a strong, stable and experienced workforce, good leadership and well developed networks and relationships—is a powerful determinant of effective response. It can trigger staff exchange/deployment, practical advice and other forms of assistance beyond that which can be achieved through procedures, manuals and planning alone.

Good planning and procedures are important, and familiarity with those procedures and staff training will continue to be critical to how well emergency response, relief and recovery occurs at the local level. However, relationships and shared knowledge will be a significant influence in determining success.

3.6.4 The state's role in building local government capacity

If the state is to continue to depend on local government to play a major role in emergency management, it needs to help develop councils' capacity. This could require targeted assistance to build skills and undertake planning tasks.

It also needs to support collaborative approaches across local government, and the building of social capital, which has proven to be so effective in relief and recovery efforts after the floods.

4.1 Introduction

The coordinated delivery of relief and recovery activities is important so that affected communities can be provided with support in a timely and efficient manner.

This audit focused on 15 state government programs providing community relief and recovery to individuals, businesses—including farmers—and local councils in affected areas.

It is important to acknowledge that, although relief programs and many recovery programs have concluded, the process of recovery at the community level is continuing in the most severely affected communities.

4.2 Conclusion

The community relief and recovery initiatives delivered by the state following the flood disaster events of 2010–11 adequately covered the major areas of social and economic recovery, and the built and natural environment.

The programs worked to deliver much needed relief and recovery support to disaster‑affected communities. However, there were inconsistencies due to the number of departments involved in the planning, design, and administration of the initiatives. This led to confusion and frustration in some communities that were under considerable stress.

4.3 Overview of relief and recovery initiatives

This audit examined 15 community relief and recovery initiatives delivered by five state departments to assist and support the flood-affected communities primarily at three levels. These were:

• individuals and families
• businesses
• local councils.

In many instances, where individual programs were directed to a specific sector of the affected communities—for example businesses—they had different processes around planning, access, governance and evaluation. These differences made the overall approach fragmented.

This part presents a comparative analysis of the relief and recovery programs on offer for the three sectors of the community. Figure 4A provides an evaluative summary of performance of the 15 programs across four domains:

• planning—adequate planning and prioritisation
• access—ease of community access including:
  • clear and timely information of the program to the target audience
  • application/eligibility criteria and documentation requirements
  • approval or rejection decisions conveyed appropriately
  • scope for flexibility in funding use
• governance—including departmental structures in place to assess, approve and monitor funding applications
• evaluations—program evaluations completed.

Figure 4A
Overview of relief and recovery initiatives

(a) Delivered by DPCD for projects on non-Crown land.

(b) Delivered by DSE for projects on Crown land.

Note: Yes – Program performance is adequate, NS – not satisfactory, NA – not applicable, None – no information available.

Source: Victorian Auditor-General's Office from departmental documentation.

4.4 Delivery of relief and recovery initiatives

The Victorian Council of Social Services, in its submission to the Review of the 2010–11 Flood Warning and Response (the Comrie Review) stated that:

'Flood is a slow burn crisis with lasting social and economic impacts. Sustained, long term and flexible economic and psychosocial supports which address both individual and community support needs will be critical to prevent escalating impacts and to support community recovery.'

Each of the 15 examined initiatives targeted different aspects of community relief and recovery. However, differing eligibility rules, application rules and governance frameworks created confusion at the local community level.

4.4.1 Individual-level relief and recovery initiatives

Relief and recovery support for individuals was provided by Centrelink at the Commonwealth level, the Department of Human Services (DHS) at a state level and by non-government organisations such as the Salvation Army and Red Cross.

Figure 4B provides a summary of the individual-level programs examined in this audit.

Figure 4B
Individual relief and recovery programs

Source: Victorian Auditor-General's Office from departmental documentation.

For the most part, short-term community relief and recovery programs were well implemented and generally well received by affected communities.

DHS quickly implemented its personal hardship grants and interim accommodation program through community recovery centres. This response to the most pressing needs was based on its prior experience with natural disasters. Appropriate fraud controls were put in place for this kind of aid and it is likely that the number of those getting help who were not eligible was small. An issue raised by local communities was that DHS' needs-assessed emergency grants application process was more cumbersome and time consuming than that of the Commonwealth government's Centrelink service.

A number of councils, in their flood recovery evaluation, identified that there was a significant number of individuals eligible for interim accommodation and personal hardship grants that did not apply, either because they did not know about them or thought that there were other people in greater need.

In some cases, recovery commencement was affected by lengthy delays in getting programs underway, funds flowing or services delivered to people who were eligible. Figure 4C provides an example of program funding delay.

Figure 4C
Example of funding delay for psychosocial recovery services

Source: Victorian Auditor-General's Office.

In Rochester, located within the Shire of Campaspe, the community's health service—Rochester and Elmore District Health Services (REDHS)—was only provided with funding for psychosocial case workers in May 2011 some four months after the floods in Campaspe. However, the support and counselling services provided by REDHS were exceptionally well regarded by the Campaspe community once operational.

These delays in funding meant services were not on the ground early when this support was needed.

Nevertheless, overall the audit found that these programs were effectively and efficiently designed.

4.4.2 Business-level relief and recovery initiatives

At the business level, flood relief and recovery programs were designed to target businesses, agriculture, dairy, livestock and other primary industries. Figure 4D provides a summary of these programs.

Figure 4D
Business relief and recovery programs

Source: Victorian Auditor-General's Office from departmental documents.

Access to business-level relief and recovery programs

Limited coordination by departments for business-level relief and recovery programs contributed to:

• a lack of consistent information
• varying access rules for programs
• arduous application procedures.

An example of these issues is shown in Figure 4E.

Figure 4E
Timeline for the Local Government Clean Up Fund

Source: Victorian Auditor-General's Office based on Mount Alexander Shire Council's evaluation of the 2011 flood recovery efforts.

Businesses in flood-affected areas had to analyse and understand varying and complex funding, eligibility and application criteria of the Victorian Business Flood Recovery Fund (VBRF), the DTF RFC-Exceptional Disaster Assistance Grants and Loans, and the RFC Concessional Loans, in order to access these grants within set time periods.

For businesses—many under pressure from a decade or more of drought—applying for any of these grants and loans was a very complex, difficult and time-consuming task. This may have affected take-up.

DPI managed the mainly Commonwealth funded Rural Finance Counselling Service (RFCS), which was invaluable for many businesses applying for the available grants and loans. However, financial counsellors could not advocate for, or coordinate the application processes, for the businesses they were assisting.

There was also no coordination between the various service providers to explain differences in flood relief and recovery programs for businesses.

In future disaster situations, having clear explanation of the rationale and rules for different grants and loan options and more coordinated criteria across all departments would help the businesses most in need get the appropriate type and level of funding.

4.4.3 Local council-level flood relief and recovery initiatives

Approximately 70—or almost 90 per cent—of Victoria's 79 councils were affected by the 2010–11 flood events. Many of these councils suffered further damage in subsequent floods in late-2011 and 2012.

DPCD's Regional Development Victoria (RDV) identified 32 severely affected councils after the major floods in mid-January 2011. Of these, 16 were very severely affected.

Local councils were supported by relief and recovery initiatives including clean-up grants, community support, and community infrastructure restoration. Figure 4F provides a summary of the community relief and recovery activities for local councils.

Figure 4F
Local council relief and recovery activities

(a) DSE was responsible for managing and administering the fund for projects on Crown land.

Source: Victorian Auditor-General's Office from departmental documents.

In addition to the community relief and recovery activities, a major part of local council restoration efforts was towards the rebuilding of major infrastructure such as roads, bridges, culverts, levees and other related infrastructure.

The process for funding the restoration and rebuilding of this infrastructure was managed by DTF, with VicRoads vetting projects.

Local Government Clean Up Fund

The three severely affected councils visited for this audit were satisfied with the implementation and management of the Local Government Clean Up Fund (LGCUF). LGCUF provided some of the worst affected local councils with immediate cash flow to start their clean-up activities.

The worst affected councils received initial funding of $100 000 each to undertake clean-up and rebuilding activities with a further proportional funding allocation determined by the severity of flood damage suffered.

The LGCUF was effectively designed and administered. It combined the early issue of initial funds to allow clean-up to get started followed by a more considered submissions‑based second funding round. Acquittals were required for all funding received. It was monitored by senior DPCD management through the provision of briefings during critical phases of the program. LGCUF was fully allocated by July 2011.

Figure 4G shows the timeline for LGCUF implementation.

Figure 4G
Timeline for the Local Government Clean Up Fund

Source: Victorian Auditor-General's Office from DPCD documentation.

Flood Recovery Officers

The councils that audit visited considered the FRO initiative was valuable to their recovery effort. The councils received either $60 000 or $120 000 in funding, depending on the length of the FRO's appointment. The initiative was managed by DPCD through RDV and was wholly state funded.

FROs were appointed to selected councils based on the estimate of physical damage and the number of individuals that had received emergency grants. Smaller LGAs with less capacity were given a higher priority. The FROs played a vital role in the community relief activities at the councils where they were employed. Activities included:

• holding community relief and recovery workshops
• being the conduit for communications between the community and council
• providing information on the various initiatives available to the community
• preparing application forms for programs such as the CRF and Flood Recovery Community Infrastructure Fund (FRCIF)
• liaising with and attending regional recovery committees.

Funding for FROs was extended for 10 councils. Issues with the administration of the program included:

• a delay in funding
• uncertainty over the term of funding for the program.
• availability of appropriately qualified and experienced staff for the FRO positions
• a lack of clear guidance from DPCD about the role that the FRO was meant to perform.

In its submission to the government's Green Paper on emergency management, the Municipal Association of Victoria (MAV) highlighted the issue of funding delay. LGAs reported more than four months delay in the provision of FRO funding following the floods, when communities had greatest need. The MAV also highlighted the burden created for councils by having to make repeated submissions for funding.

There was also a lack of collaboration between departments offering worker funding which exacerbated the fragmentation created by so many programs.

Loddon Shire was offered 12 months funding for an FRO, a further six months funding for a rural coordination officer (RCO) and—much later—a further allocation from DPCD for a volunteer coordinator. The council rolled the first two allocations into one to employ a full-time FRO for a longer time period and has yet to apply the volunteer coordination funding.

The FRO program did not take into account skills shortages in regional and rural Victoria. Often, appropriately qualified and experienced staff were not available locally, and staff from outside the area were unlikely to be attracted to short-term positions.

Overall, although the FRO program was successful and valuable to the communities in which it was implemented. However, feedback from the councils and the evaluation conducted by DPCD indicates that a template position description would have provided councils with better direction about how the FRO position could best be used.

Community Recovery Fund

The $4 million Floods CRF was set up by DPCD in January 2011 to support:

• community recovery, community development and capacity building for the future
• activities that help restore community infrastructure and social networks and functioning.

The CRF funding was allocated through a combination of a:

• base amount, plus an allocation based on severity of impact, to flood-affected communities on a municipal basis
• community small grants program for activities of $5 000 or less
• strategic reserve.

An application for CRF funding had to be assessed at a regional and inter‑departmental level and by a panel of representatives from the state and Commonwealth governments.

The complex governance structures and approval processes made application arduous and caused long wait times for decisions.

All three councils visited for the audit found the process of applying for the CRF frustrating and complex. For example, to run a community event, budgeted at approximately $1 000, the Shire of Campaspe community had to wait more than two months while the funding application progressed through the CRF governance framework.

DPCD commissioned a review of the implementation of the CRF in May 2012. The report was delivered in August 2012.

Key points from the review include:

• delivery of recovery projects under CRF were dependent on resources available through another program, the FRO program—not all councils received FRO allocation and so could not take advantage of the CRF.
• information about the CRF and guidelines should be more readily available.
• promotion of the CRF by DPCD should be improved.

Although not designed to work in conjunction, in reality there was an interdependency between the CRF and FRO programs as the FRO was needed to deliver the CRF program. This highlights the problems in coordination across a complex suite of programs and the need for better collaboration.

It is commendable that DPCD conducted a thorough evaluation of this program. It should implement the recommendations of that review to inform similar future programs.

Flood Recovery Community Infrastructure Fund

The FRCIF was a joint initiative of DPCD and DSE to support the restoration and replacement of community infrastructure assets to flood-affected LGAs.

Eligible community infrastructure assets included:

• town halls
• sport and recreation facilities
• caravan and camping facilities
• public parks and reserves and walking tracks.

DSE was responsible for administering projects for assets on Crown land reserves managed by committees of management. DPCD administered projects where assets were council or privately-owned and operated by community organisations.

LGAs experienced differences in how the two departments delivered the program. For example, the Northern Grampians Shire Council had to submit four separate applications for four projects to DSE—$207 500 for the tennis club, $219 000 for the memorial park, $187 000 for the bowling club and $133 500 for a recreational reserve. However, it only had to submit one application totalling $571 570 for six separate projects to DPCD.

DSE has advised that that the FRICF program for Crown land could not be packaged by LGA as the various Crown land parcels were managed by legislatively appointed committees of management. However, councils were able to act legally as the agent of multiple small committees of management. Councils applied for and received funds on behalf of those committees. In these cases, it is not clear why streamlined arrangements were not put in place.

From a community access perspective, differences in departmental application and documentation requirements for the FRCIF program were cumbersome which led to increased administration and confusion for already stretched council staff.

Rural Coordination Officers

The RCO initiative was established to coordinate volunteers to help with the clean-up and repair of fences for flood-affected farmers and to coordinate rural and agricultural issues. A similar program was run by DPI after the 2009 bushfires.

On receipt of a council application accompanied by a position description, councils were funded $60 000 each to appoint an RCO for an initial period of six months. The councils had a degree of latitude in how they used the RCOs. RCO start dates varied from April to September 2011, with a significant proportion starting in June or July.

At the expiry of their initial six-month term, the RCOs in Buloke and Gannawarra were extended for six months. As noted above, short-term position funding creates problems—it increases the administrative burden on councils to again formally request for further funding, it is harder to attract appropriately qualified and experienced staff for short periods, and it works against medium- to longer-term planning. The issue of poor long‑term planning for recovery is identified in this audit.

An external evaluation of the FRO and RCO programs commissioned by DPCD found the RCOs to be highly valued by the councils and the broader community and that they were, along with the FROs, a catalyst for action.

Similarly to the evaluation of the FRO program, the RCO review suggested that the development of a template position description for the RCO position would be useful for future programs.

Recommendations

1. The Department of Premier and Cabinet should develop clear guidelines for departments in designing community disaster relief and recovery programs.
2. Rural Finance Corporation (Department of Treasury and Finance) and Regional Development Victoria should coordinate any future disaster relief and recovery programs for businesses.
3. Regional Development Victoria should implement the recommendations from the Department of Planning and Community Development's review of the Community Recovery Fund to improve the delivery of relief and recovery programs in the future.

5.1 Background

Continuous monitoring and reporting on flood relief and recovery initiatives is necessary for timely, co-ordinated and decisive action to mitigate risks or any barriers to successful progress.

Evaluating the entire flood relief and recovery effort including governance is important to identify lessons learnt and gauge overall impact and effectiveness of programs. A systematic approach is required to use those lessons to inform strategies and actions, to better prepare for recovery in future emergency situations.

5.2 Conclusion

Victoria has met its monitoring and reporting requirements under the National Partnership Agreement (NPA). Monitoring and reporting mechanisms were sufficient to oversight and manage the most pressing issues faced by local councils and communities. Of the 15 initiatives examined, acquittal monitoring and reporting has been timely and appropriate. However, Victoria not yet acquitted its financial reporting requirements under the Natural Disaster Relief and Recovery Arrangements (NDRRA).

It is important for government to know what has worked well and where improvements need to be made. Conducting an overarching evaluation and incorporating lessons learnt into future planning would assist government to better support communities and know where to best target its resources for future emergency events.

The state committed to evaluating the recovery phase and actions identified in its Flood Recovery Work Plan (The Work Plan). This audit was advised that the Secretaries' Flood Recovery Group (SFRG) intends to implement the Department of Human Services (DHS) evaluation framework for relief and recovery programs and conduct a whole-of-government evaluation in the latter part of 2013. However, this framework will need to be adapted so that it can be applied to all relief and recovery programs, not just those administered by DHS.

5.3 Monitoring and reporting

Flood relief and recovery initiatives need to be monitored and reported consistently and regularly to enable:

• the state to meet Commonwealth NPA and NDRRA requirements
• departments and agencies to report to flood relief and recovery governance committees on recovery issues and barriers to progress
• councils to report to the state as part of the NPA and NDDRA acquittal requirements and to departments on the progress of initiatives and acquittal for funding provided.

Key elements of this reporting relate to:

• financial data—claims, acquittals against funding, advances
• operational data—service and grant utilisation, recovery issue identification and management, impact data, program delivery and acquittal reporting.

5.3.1 Reporting to the Commonwealth

The NPA for Victorian Flood Reconstruction and Recovery commenced on 10 May 2011 and is due to expire on 30 June 2014. The NPA acts in conjunction with the NDRRA, which is the key mechanism for the Commonwealth to support the states after a natural disaster.

Under the NPA, Victoria must report progress against outcomes specified in the Work Plan monthly for a period of six months. The frequency and form of reporting after that was to be agreed and based on milestones and initiatives identified in the Work Plan, which was finalised in September 2011. The NPA also requires reporting on:

• progress with expenditure under the NDRRA, including advice on the level of expenditure in key areas of the reconstruction effort
• revisions to estimates of costs
• progress against the recovery plans of the most severely affected communities as agreed by Victoria and the Commonwealth, including the extent to which milestones are being achieved.

Victoria has met NPA reporting requirements through the Department of Treasury and Finance's monthly Flood Recovery Performance Report. The report contains the number of—and expenditure on—household, business and primary producer grants and loans, business and local government funds, infrastructure repairs and other flood recovery programs established by government.

The Department of Treasury and Finance developed a framework to meet the NPA reporting requirements and commenced reporting in June 2011. This allowed for timely and comprehensive reporting. The first annual review of the NPA conducted in August 2012, by the National Disaster Recovery Taskforce and representatives of the SFRG found that '...overall, both parties have met their respective and shared performance monitoring and reporting requirements.'

Under the NDRRA arrangements, Victoria is required to provide audited financial statements to support claims, including subsequent spending against any advance payments. The NDRRA guidelines require these statements to be audited by the Victorian Auditor-General's Office (VAGO). Victoria has not met its financial reporting requirements under NDRRA, as it is yet to provide an acquittal of funds spent in respect of the 2010–11 floods.

5.3.2 Statewide monitoring and reporting

In addition to the monthly Flood Recovery Performance Report, the SFRG monitored recovery progress through:

• Place-based reporting of the most urgent issues, with strategies and actions to address the issue, as well as anticipated residual gaps.
• Stream-based reporting and tracking of key issues by portfolio—agriculture, business recovery and community assets, health and human services and natural environment and transport.

Place-based and stream-based reporting took a similar approach—highlighting the issues that were most pressing and addressing those as a matter of priority. With the widespread damage and continued movement of the flood waters across the state, this approach enabled a more rapid response to issues and flexibility where required.

However, the reports did not provide sufficient detail to understand how actions would be implemented, or a clear indication that the strategies/plans to address the issue had worked.

5.3.3 Monitoring of department initiatives

Departments' monitoring mechanisms for each initiative varied. Overall, departments have applied adequate acquittal processes according to the type of initiative, which includes:

• grants and loans to businesses and primary producers acquitted using invoices and receipts
• recovery support worker funding, such as the Flood Recovery Officer (FRO), acquitted by councils through submission of employment contracts, advertisements, and submission of an evaluation of flood recovery for their respective municipality
• councils acquitting recovery projects, such as the Community Recovery Fund, through the provision of signed invoices to the responsible department.

5.3.4 Reporting by local government

Local councils reported directly to each department and then departments reported to the SFRG on the progress, take-up and funding used for initiatives.

Initially, this reporting process was cumbersome and administratively time consuming, requiring councils to report the same or similar funding and service data to different departments. In November 2011, the Department of Primary Industries (DPI) implemented a web-based portal which enabled the generation of monthly scorecards to provide SFRG with key data by each council.

This has streamlined data administration processes for councils as well as improved data reporting at a state level. The portal has been well received by departments and local governments. It can form the basis of an efficient reporting system following future emergency events.

5.4 Evaluating flood relief and recovery

Evaluating relief and recovery activities and the governance systems that support planning and delivery is important. It helps to continuously improve emergency and recovery management and to better assist flood affected communities, both now and in the future.

5.4.1 Good practice evaluation for relief and recovery

A systematic, centralised evaluation based on a rigorous and clearly defined approach would enable the government to assess the extent to which its governance arrangements and selected programs and initiatives helped communities to recover.

The Department of Premier and Cabinet (DPC) developed a set of benchmarks for community recovery to inform the 2012 Victorian Emergency Management Reform: White Paper (the White Paper), as described in Figure 5A. These benchmarks are based on the Australian National Principles for Disaster Recovery and include the requirement for robust evaluation of initiatives and that documented lessons learnt are used to build capacity and prepare for future community relief and recovery programs.

Figure 5A
Benchmarks for community recovery

Source: Victorian Auditor-General's Office from the Department of Premier and Cabinet's May 2012 submission in response to the Emergency Management Green Paper.

These benchmarks can be used in an evaluation framework to guide evaluation of individual programs as well as the relief and recovery effort overall.

5.4.2 Evaluation at a state level

The state's Flood Recovery Work Plan committed to a comprehensive evaluation of the recovery phase of the 2010–11 floods including evaluation of Work Plan actions. There have been evaluations of:

• some individual programs
• DHS's coordination of emergency relief and recovery
• the Whole-of-Victorian-Government Communication Strategy.

However, there was no whole-of-government evaluation of relief and recovery programs, and there was no framework in place to guide such an evaluation.

In June 2012, DHS endorsed a framework and guidelines for evaluation of relief and recovery programs managed by Health and Human Services Emergency Management (HHSEM). It includes benchmarks based on the Australian National Principles for Disaster Recovery and is largely consistent with those developed by DPC and set out in Figure 5A. Both DPC and DHS propose evaluation frameworks which would include:

• real-time evaluations during emergency events
• lessons learnt exercises
• recovery program monitoring
• recovery program evaluations.

The DHS framework provides process guidance and a methodology for evaluating performance and suggested benchmarks. It was clearly designed for DHS to use at a regional and state level.

This audit has been advised that the SFRG intends to use this framework to evaluate the whole-of-government relief and recovery effort in the latter part of 2013. The framework will need to be adapted to be used for a recovery evaluation across multiple departments.

The intended timing of evaluation—well after the majority of programs have been delivered—means that it is likely that important information will not be captured. This is a serious shortcoming.

In addition, there has been no central data collation and analysis from evaluations, nor has there been a consistent methodology and approach applied to enable a reasonable picture of performance to be formed. In the absence of a broader evaluation, there has been no assessment of how programs worked together, whether synergies were achieved, or if there were overlaps and gaps.

The 2012 White Paper states that evaluation will form part of the portfolio of the yet to be established Inspector General for Emergency Management (IGEM).

As outlined in the White Paper, this role will focus on performance monitoring, assurance and continuous improvement related to the response and planning phases of emergency management. However, there is no specific reference to performance monitoring, review and evaluation of recovery arrangements and activities. It is therefore not evident how lessons learnt will be incorporated into future planning priorities for recovery.

The White Paper makes no reference to a formal evaluation framework being developed and applied in the future. It identifies an action to work with communities to develop an approach for evaluating programs and initiatives. Although community input to an overarching evaluation approach is important, it is only one element needed to build a sound framework. It will be important for future reforms arising from the White Paper to include a rigorous approach to evaluation.

5.4.3 Department-led evaluation

Some specific flood relief and recovery issues and initiatives evaluated by departments include:

• the emergency relief coordination, the psychosocial recovery support program and the whole-of-government flood recovery communications —DHS
• agriculture flood response and recovery program, the rural coordination officer program and the rural financial counselling service —DPI
• FRO and the community recovery fund programs —the Department of Planning and Community Development (DPCD).

The results are summarised in Figure 5B.

Figure 5B
Summary of departmental evaluations

Source: Victorian Auditor-General's Office from departmental documentation.

It is positive that the evaluations and reviews summarised in Figure 5B were conducted, however, there is a lack of consistent methodology on evaluations undertaken. A consistent and rigorous approach would have better enabled conclusions to be drawn about relief and recovery efforts, based on assessing the set of evaluations together. The process for incorporating improvements and lessons learnt is not apparent.

5.4.4 Local government evaluation of state-delivered relief and recovery initiatives

In addition to the department-led evaluations, local government councils conducted evaluations of the state-delivered flood recovery initiatives. Analysis of evaluations by the local government councils is presented in Appendix C.

The audit visited three local government councils that were very adversely affected by the 2010–11 floods. There were some common themes raised in the evaluations undertaken by local government, audit's council visits and the department-led evaluations. These themes are:

• No single point of communication for information—particularly in relation to financial assistance, including improved clarity of information.
• Grant availability and eligibility criteria—there was confusion regarding who was eligible for grants with barriers to take-up, including for businesses not physically damaged by flood waters but affected by business downturn. Low interest loans criteria excluded the businesses most likely to need the loan. Farmers had to derive 51 per cent of their income from their farms to be eligible for grants, but years of drought meant that many had sought additional sources of income outside their farms, to stay afloat, thus excluding them from grants.
• Application approval processes overly bureaucratic and lengthy.
• Release of case support and counselling service funding too slow.
• Inaccuracy of impact data.
• Duplication of information collected across agencies—agency information sharing prior to the use of the web portal for reporting was poor and added to the administrative load on local councils.

5.5 Relief and recovery lessons learnt

Victoria has experienced a rise in the frequency, scale and impact of natural disasters over recent years.

The systematic capture and incorporation of lessons learnt from previous events is critical for better preparation for future events and to continuously improve systems, processes and approaches to community recovery. The DHS evaluation framework includes a process for recording evaluation recommendations and incorporating those lessons into future planning. An opportunity exists for this to be applied more widely.

5.5.1 Review of flood warnings and response

The Review of 2010–11 Flood Warnings and Response (The Comrie Review), published in December 2011 identifies a range of improvements needed to assist local government and community recovery.

While the report has a broader emergency management focus, identified improvements are consistent with the findings of this audit. These improvements relate to:

• Rapid Impact Assessment (RIA)—absence of timely and accurate information, little understanding of the primary purpose of the RIA, different systems used by agencies to collect and analyse data, difficulties in getting access to timely and accurate data to plan and prioritise, and ownership and responsibility for the RIA. The Comrie Review noted that coordination of the RIA and the exchange of information was disorganised with some communities subject to multiple assessments
• Financial Assistance—confusion over the availability of financial assistance to deal with the repair and clean-up; problems with access to information on grants and assistance for individuals, businesses and primary producers; and no ownership of problems by state agencies
• Betterment—confusion and lack of clarity and information with regard to policy, processes and criteria for betterment funding—all of which led to a delay in local government applying for betterment funding and progressing recovery activity.

5.5.2 Government response to the Comrie Review

In November 2012, the government issued a response to the Comrie Review, specifically with regard to improving the flood warning systems implementation plan recommendations one to 30 and recommendation 86 of the Comrie Review. There were 93 recommendations in total, leaving 62 not yet responded to by the government. The Premier informed Parliament on 8 December 2011 that 'The Government accepts these recommendations...in whole, in part and in principle' However, there has been no further government response on 62 recommendations and it is not evident how recommendations from the Comrie Review regarding local government recovery have been used to inform the White Paper.

The White Paper responds in part to other issues raised in the Comrie Review, however, particular recommendations regarding local government and community recovery have not been completely addressed. The Department of Justice has advised that recommendations will inform future emergency management changes and activities. It is imperative that these recommendations, and the issues they illustrate, are not overlooked and that they are incorporated into future recovery planning and practices.

Recommendations

1. The Department of Premier and Cabinet should lead:

• the development of an evaluation framework, based on work undertaken to date by the Department of Human Services, to be used in assessing the impact of relief and recovery programs in the recent floods and in future disaster events
• an evaluation of the impact of relief and recovery programs in the recent floods, using this framework.

Secretaries' Flood Recovery Group

Flood Economic and Environmental Recovery Team

Flood Emergency Recovery Team

Flood Recovery Coordination Group