13 May 2021

Victorian Ombudsman’s investigation into the Business Support Funds

The Victorian Ombudsman’s six-month investigation into administration of the Victorian Government’s Business Support Funds concluded in late April.

Several ADAVB members reported issues with their applications for the first Business Support Fund, administered by Business Victoria under the Department of Jobs, Precincts and Regions (DPJR). Dental practices became eligible for stream two of the first Fund, which was open from 12 May to 1 June 2020. Following advocacy by the ADAVB, our members and increasing complaints from business owners across a range of industries, the Ombudsman was compelled to investigate. 

The Ombudsman’s report highlighted that:

  • The DPJR was overwhelmed by the volume of enquiries, with 106,000 calls received from March to November 2020.
  • The DPJR had to quickly set up systems to administer more grants in one year than it had in the previous 50 years, with the first Fund set up in just nine days.
  • The call centre was initially staffed by only five Department employees. When the call centre was scaled up, contractors were not given access to the database due to privacy, and therefore were not able to give business owners specific information about their application.
  • A rigid approach to assessing applications penalised business owners for making honest mistakes during a difficult and stressful period.
  • Updates to the online application form after eligibility criteria were expanded (stream two) caused confusion and meant that some applicants didn’t complete the form correctly.
  • Minor errors made when applying meant that emails sent by the DPJR weren’t received or business names couldn’t be validated. Emails to applicants were generated by a system that couldn’t easily identify bounce backs when emails weren’t delivered to the recipient.
  • When the Fund opened, there was no information on the Business Victoria website about how to challenge a decision or make a complaint. The internal escalations team was also wound up shortly after the first Fund closed and all complaints were outsourced to the Ombudsman. The escalations team was reinstated at a later stage at the request of the Ombudsman.
  • More than 1000 complaints from business owners were made to the Ombudsman by February 2021.

Six recommendations were made by the Ombudsman with responses by the DPJR outlined in the report:

  1. Invite business owners to reapply for the first Fund in specific circumstances.
  2. Invite business owners with complex business structures to reapply where their business name was not registered with ASIC or their application could not be linked with their ASIC registration.
  3. Redesign the Better Grants by Design framework in consultation with the Department of Treasury and Finance.
  4. Improve communication with applicants by developing service delivery principles for grant program administration.
  5. Ensure that complaint-handling processes and avenues are available on the Business Victoria website.
  6. Provide external contractors in the call centre with access to sufficient information to be able to assist grant applicants.

Although the Ombudsman was critical of many elements of the Fund administration, she did acknowledge that the DPJR engaged with her office from the outset of the investigation, improved processes along the way, and reassessed or paid Funds in some cases while the investigation was in progress. The DPJR engaged KPMG in mid-2020 to review complaint-handling and develop a dispute-resolution framework for the Fund. A complaints procedure was eventually put up on the Business Victoria website in February 2021 after several requests from the Ombudsman. 

Almost $795 million has been paid to business owners by the Victorian Government through the Business Support Funds, a necessary lifeline during a period of repeated and sustained business disruption caused by the pandemic.

The full report is available at www.ombudsman.vic.gov.au.