Dutton personally slashed millions in grant funding from organisations who's community safety projects were strongly recommended by his department & used the funds to support his own handpicked list that did not follow his department's recommendations.

Dutton also used the funds to support grants for two councils — in the lead up to a by-election in a highly marginal seat — that his department recommended should not be funded at all.

An investigation by the ABC's 7.30 report reveals the extraordinary influence that Mr Dutton wields over a multi-million dollar fund, drawn from the seized proceeds of criminal enterprises, for the Safer Communities program.

Under the grant guidelines for round three of the Safer Communities program, the home affairs minister must take into account the assessment of each project, but he can effectively overrule his department's own merit-based assessments.

7.30 also revealed that Dutton was warned by the department, in a previously confidential ministerial briefing, that overruling the merit system could draw scrutiny from the Australian National Audit Office or from news organisations.

The documents, released under freedom of information laws, raise fresh questions about the intervention of ministers in awarding or excluding organisations from grant funding, this time in the area of community safety grants.

Ministerial submissions given to Mr Dutton by the Department of Home Affairs for round three of the Safer Communities program, obtained by 7.30, reveal that the Department recommended funding the 70 highest ranking projects to a combined value of $17,504,115.

The projects included CCTV upgrades, better lighting, and improved building security in non-government organisations and local councils.

But on January 31, 2019, Mr Dutton reduced funding for 19 of the highest-scoring grant applications, in a handwritten note, by a combined total of $5.59 million.

These applications were all from local councils, with some of them located in remote or regional areas.

While all of the councils contacted by 7.30 were grateful to receive some federal funding, a number of them were forced to reduce the scope of their community safety projects due to the reduction in federal funding.

Armidale Council sought $945,687 to install 25 CCTV cameras and 61 new lights in a crime hotspot. Mr Dutton reduced their funding to $450,000, which was only able to fund 16 CCTV cameras and 29 new lights.

Orange City Council sought $1 million to fund 142 new footpath lights and a number of CCTV cameras. Their funding was reduced by Mr Dutton to $200,000 and they were able to install just 10 new pole lights.

Rockingham Council sought $969,292 to install 43 cameras and the installation of network fibre. That was reduced to $500,000, which funded 34 cameras that were not connected through network fibre.

Some councils were able to complete the security upgrades by drawing on state government funding or their own budgets.

None of the councils contacted by 7.30 were provided with any reasons for why their funding was reduced, but a number speculated that they believed it was due to the program being oversubscribed.

Unknown to the councils, it was Mr Dutton's intervention in the scheme that reduced their project funding.

The ministerial briefings do not outline any explanation from Mr Dutton for the reduction of the funding for these organisations.

He sets out to the department in a handwritten briefing note: "When funding is NOT approved in full ... Negotiate within scope of original project."

Dutton told the 7.30 report in a statement: "The suggestion that the Government has done anything other than support projects worthy of support is nonsense".

"I am proud of the support the Safer Communities Fund has provided to organisations such as The Scout Association, Salvation Army Trust and St Vincent de Paul who have made Australia a safer place.

"Australians expect the Government to act to make the communities we live in safer. That is exactly what the Government has done through the Safer Communities Fund."

Dutton prioritised grants

The funds that were freed up by reducing the highly regarded grants were then re-deployed by Mr Dutton to fund other projects, but he overlooked dozens of higher-ranked projects in this list in favour of his own personal choices.

A "reserve list" of funding options was created by the department, setting out another 211 projects considered to be suitable, but which received lower scores.

These projects were ranked from highest to lowest in a spreadsheet provided to Dutton.

The department asked Dutton to rank these projects "to ensure all available funds are used". Mr Dutton ranked 53 projects after he reduced funding for the other high-scoring organisations.

Mr Dutton followed only the top ranked recommendation from his department on the reserve list, which was to provide $467,475 to the Royal Flying Doctors Service's remote operations.

He declined to follow the rest of the department's merit-based recommendations — which he is permitted to do under the grant rules — and instead handwrote his own rankings of the grant applications.

The ministerial briefing to Mr Dutton states: "Consistent with the Program guidelines and the Commonwealth Grant Rules and Guidelines, as the Minister you are not limited by this ranking, and may decide which grant applications to approve, taking into account the application assessment, the Department's recommendations, and the availability of funds."

The department had warned Dutton about not following its merit guidelines.

The ministerial submission to Mr Dutton then sets out: "As this is an open, competitive, merits based program, should you decide to make funding decisions that do not reflect the order of merit, you may be criticised either in the media, or by the Australian National Audit Office."

The projects selected by Mr Dutton include a church within his electorate called the Vineyard Christian Fellowship, that scored 69.25 out of 100, and the St Vincent de Paul Society Queensland (65 out of 100).

The 7.30 report is not suggesting that these projects approved by Mr Dutton were not eligible for funding, but rather that some more highly valued projects assessed on merit were overlooked.

Geoffrey Watson SC, a barrister and a director of the Centre for Public Integrity, said: "In any scheme like this, the way in which the money is allocated must be carefully considered, so that it's going to the most needy place, where it will work the best.

"Any departure from [the process] would need to be justified. And I see no justification on the paperwork."

The numerous grants recommended by the department that were not approved by Mr Dutton have been redacted by the department.

In a further briefing on February 14, 2019, the department wrote to Mr Dutton that "you approved a number of projects for amounts significantly less than the amounts requested by applicants".

"This resulted in all the projects you identified in the reserve list ... being able to be funded within the appropriation."

Minister announced some grants before they were assessed

Dutton also announced community safety grants for two local councils before they had even been assessed, and then later ignored his own department's recommendations not to fund them because they did not represent value for money.

On July 16, 2018, Mr Dutton announced security camera funding for Waratah-Wynyard Council and Burnie City Council, both located in Tasmania.

The announcement was part of a joint press conference with Liberal candidate for Braddon Brett Whiteley in the lead-up to the 2018 by-election.

Mr Whiteley was contesting a highly marginal seat at the time. The incumbent Labor MP Justine Keay narrowly held the seat at the by-election later that month, but lost her seat in the 2019 general election and was replaced by Liberal MP Gavin Pearce.

But at the time of the press conference the department had not assessed the council's projects, and no grant guidelines were in place yet for round three of the Safer Communities fund.

When the then-assistant home affairs minister Alex Hawke signed off on the round three Safer Communities grant guidelines on July 29 2018, the Department of Home Affairs noted that one of the "sensitivities" was that Mr Dutton had already announced two grants, and that the department was "working on a third stream of direct source, non-competitive infrastructure guidelines ... to meet these commitments".

But when the Department of Industry, Innovation and Science assessed the council projects, they scored so low that they were not recommended for funding.

The 7.30 report investigation revealed that Waratah-Wynyard Council scored 49.25 and Burnie City Council scored 50.5 in the Department of Industry's ranking out of 100.

Those scores were lower than the organisations ranked as eligible by the Department of Home Affairs in the list of suitable projects provided to Dutton.

The Department of Home Affairs ministerial briefing to Dutton on January 31, 2019 noted that: "The applications do not represent value for money in accordance with the grant guidelines."

Mr Dutton still granted both councils the funding. He wrote in his reasons for doing so that each project "would assist with the safety" of those communities.

Prime Minister Scott Morrison's 2018 ministerial standards require ministers to "observe relevant standards of procedural fairness and good decision-making applicable to decisions made by them in their official capacity".

Mr Watson said he believed Mr Dutton may have breached this requirement.

"We can't see what was going through Dutton's mind," he said.

"All I can say is this, without further explanation, there's a prima facie case for a breach of ministerial guidelines."

Dutton did not respond to questions about the ministerial standards.

There have been warnings about announcing grants before they have been through an assessment process in previous audit reports.

A previous community safety fund called the Safer Streets program was subject to a 2015 Australian National Audit Office report that was critical of the practice of announcing grants before they had been assessed.

Watch this story tonight (10-02-21) on the ABC's 7.30 report.

Story By | Paul Farrell & Alex McDonald