Local councils in NSW have been criticised over spending of State and Federal bushfire recovery grants.

In the Shoalhaven, where bushfires burnt through 80 per cent of land and destroyed 280 homes, the council has allocated $400,000 of its Federal bushfire recovery grant to upgrade a sporting field.

Questions are also being asked about plans by Bellingen Shire Council on the Mid-North Coast, to spend $50,000 of recovery funding to install an arts trail in Dorrigo, without direct funding to support the community which was hard-hit by bushfires in August last year.

Other councils such as Coffs Harbour and Guyra, in the Armidale Regional Council Area, have spent bushfire recovery money on refurbishing preschools.

In response to the backlash, Coffs Harbour City ended up using other council funds.

President of the Conjola Community Association Robyn Kerves said Shoalhaven City Council's plans to upgrade the Bomaderry sports fields as part of its $1.4 million grant spend was another blow to the region.

"If those fields weren't affected by fire, I don't see why funding went there," she said.

Ms Kerves said the money would have been better spent on partial dredging of the Conjola Lake and business grants to support the popular holiday spot stay afloat after enduring fires, floods and COVID-19.

The council plans to spend the remaining funds mainly on footpath renewal, a customer contact centre to support bushfire-affected residents and business.

'No-one knows what a resilience hub is'

Shoalhaven Mayor Amanda Findley (Above) conceded some might "scratch their heads" at the investment.

But she said events like the Koori Cup, to be held at the facility, would drive millions of dollars into the broader local economy.

Ms Kerves said she could not see "any benefit" to the towns of Lake Conjola, Mollymook and Ulladulla from a cup being held more than 60 kilometres away at Bomaderry, north of Nowra.

On the Mid-North Coast, Dorrigo Chamber of Commerce president Peter Mortimore said he had hoped Bellingen Shire Council would provide grants to support businesses, many of which had experienced a 70 per cent downturn following the fires and further hardship due to COVID-19 restrictions.

"[The Federal funding] was for recovery and relief … Dorrigo saw none of it," he said.

Bellingen Shire Council received $1.4 million in Federal and State funds and plans to spend $880,000 on community resilience measures, including a $365,000 "resilience hub".

Mr Mortimore questioned the merit of a resilience hub when "no one really knows what it is".

The Bellingen Shire Mayor Dominic King said the hub would be "a place where people can come and get advice, it will drive the micro-community model which will help us look after all those people impacted by the fires last time".

Cr King said local businesses would be helped by $10,000 Federal Government business support grants announced for the shire in March.

Under the funding arrangements councils aren't allowed to spend money on disaster mitigation, but can use it to help prepare for future emergencies.

Funding minus the red tape

The ABC contacted 36 fire-affected councils across the state to determine how much funding they received, how much they had spent so far and on what.

Across NSW, 33 councils received an initial and immediate Federal Government support of more than $1 million in January and February.

Goulburn-Mulwaree, Oberon and Greater Hume councils received $100,000 from the State Government.

Oberon Mayor Kathy Sajowitz said the council was lobbying for more recovery support after it missed out on the $1 million Federal grant, despite the region being declared a bushfire disaster area.

"We've lost 200,000 tourists coming into our area per annum that just visit the [Jenolan] caves alone," she said.

But for councils with plenty of disaster funding to spend, they've been met with "minimal red tape" and broad guidelines so they can tailor their response to community needs, according to the National Bushfire Recovery Agency.

The agency suggested money be spent on initiatives such as hosting recovery events, repairing roads and community facilities, as well as distributing recovery grants to small businesses and farmers.

Cr King said local businesses would be helped by $10,000 Federal Government business support grants announced for the shire in March.

Under the funding arrangements councils aren't allowed to spend money on disaster mitigation, but can use it to help prepare for future emergencies.

Funding minus the red tape

The ABC contacted 36 fire-affected councils across the state to determine how much funding they received, how much they had spent so far and on what.

Across NSW, 33 councils received an initial and immediate Federal Government support of more than $1 million in January and February.

Port Macquarie is to receive $1.67 million, with spending so far totalling $0 but with several initiatives underway or in development 

Goulburn-Mulwaree, Oberon and Greater Hume councils received $100,000 from the State Government.

Oberon Mayor Kathy Sajowitz said the council was lobbying for more recovery support after it missed out on the $1 million Federal grant, despite the region being declared a bushfire disaster area.

"We've lost 200,000 tourists coming into our area per annum that just visit the [Jenolan] caves alone," she said.

But for councils with plenty of disaster funding to spend, they've been met with "minimal red tape" and broad guidelines so they can tailor their response to community needs, according to the National Bushfire Recovery Agency.

The agency suggested money be spent on initiatives such as hosting recovery events, repairing roads and community facilities, as well as distributing recovery grants to small businesses and farmers.

Below : Bushfire destroyed 280 homes in the Shoalhaven region