Investigation into the Department of Jobs, Precincts and Regions’ administration of the Business Support Fund

A snapshot of this report can be downloaded here.

Letter to the Legislative Council and the Legislative Assembly

To

The Honourable the President of the Legislative Council

and

The Honourable the Speaker of the Legislative Assembly

Pursuant to sections 25 and 25AA of the Ombudsman Act 1973 (Vic), I present to Parliament my Investigation into the Department of Jobs, Precincts and Regions’ administration of the Business Support Fund.

Deborah Glass OBE
Ombudsman

27 April 2021

Foreword

My mental health has suffered due to watching my life’s work deteriorate in front of my eyes … I feel sad, frustrated, angry and defeated that through no fault of my own, I am being penalised …

From complainant to Ombudsman

At first it was about delays. In April 2020 the trickle began, complaints from small business owners applying for a government grant to keep them afloat, waiting for an answer to their application. Then a stream; by July, a flood. By then, the complaints were not only about delays, but also denial of a grant. There was desperation in people’s voices, they were counting on a grant to pay bills, rent, wages – to survive.

By September, after my staff had sought to resolve over 600 individual complaints with the Department of Jobs, Precincts and Regions, I launched an investigation into the systemic issues.

The COVID-19 lockdowns fell like a hammer blow on small businesses. To the Victorian Government’s credit, it had swiftly announced an economic survival package to provide $10,000 grants to eligible business owners. It was a tough job for the Department, quickly setting up systems to administer more grants in one year than it had done in the previous 52 years. For many people, it worked: tens of thousands received an economic lifeline.

But for thousands more it didn’t. Applications could only be made online and not everyone is computer literate; small business owners are not all fluent in English; some have disabilities or communication difficulties; the process was complicated, confusing and occasionally contradictory. The Department made mistakes. People made mistakes. Mistakes were, in the fraught circumstances of the pandemic, completely understandable.

But the consequences of people’s mistakes could be devastating. Thousands of applications were rejected because, unbeknown to the applicants, they remained in ‘draft’, awaiting further information, when the deadline expired. Others were not processed because people made a typo in the form, a keystroke error on a number or email address. Updates to the online form after the eligibility criteria were expanded, and while the Fund was still open, led to confusion. Despite the stress and anxiety caused by COVID-19, in an environment where their businesses were being destroyed, people were being penalised for their honest mistakes.

Nor did the processes help where they should. The call centre could not initially handle the volume. It was then expanded – but the outsourced staff were not given access, on privacy grounds, to the database containing the information needed to help business owners struggling to pursue their applications. Well- intentioned – but not fit for purpose.

A good internal review and complaints process should be a priority for any system of public administration, even more so when it is set up in haste. Complaints will quickly identify the pressure points, the things that must be fixed. But when the Fund opened there was no information on the Business Victoria website about how to challenge a decision or lodge a complaint. Eventually people were signposted to the Ombudsman, effectively outsourcing the complaints process to my office.

What went wrong? The Fund was established and scaled at speed. The Department had nine days to implement the program, with no opportunity to test its design or delivery. But its design missed some of the key checks and balances that would have picked up the inevitable flaws. Many complaints could have been resolved without coming to my office had the Department been more reasonable in what, to small business owners, was a highly stressful situation, with some businesses fighting to stay alive.

Despite the stress and anxiety caused by COVID-19, in an environment where their businesses were being destroyed, people were being penalised for their honest mistakes

Good intentions got lost in translation. The aim of the Fund was laudable, to support a hugely vulnerable cohort affected by lockdown. But administering it inflexibly undermined its very purpose. The people were forgotten in the process. If someone was genuinely eligible for a grant, why should they be refused because they made a simple mistake, or were confused by what was indeed a confusing process?

These principles went to the heart of the Ombudsman’s proposed resolution of, by now, over a thousand complaints.

The Business Support Fund was supposed to be a lifeline for businesses, and for many it was – but in other cases all it did was add to their stress, anxiety and uncertainty. When the Government announces such schemes in the future, it needs to ensure the basic fundamentals are in place – the ease to apply; good communication; staff who have the ability to provide fulsome information and the discretion to show compassion and flexibility when it is right to do so; a proper complaints process.

To the Department’s credit, it engaged constructively with my office from the outset, resolving large numbers of complaints and improving its processes along the way. Many people received their grants while the investigation was ongoing. A draft of this report resulted in the final acknowledgement that thousands more people should have their applications reconsidered.

Sometimes, it takes the nudge of the Ombudsman’s elbow to encourage public servants to do the right thing. In the end, that they do the right thing is what matters.

Deborah Glass

Ombudsman

Business Support Fund by the numbers

• Fund opened March 2020
• Fund closed June 2020
• Quickest grant rollout in 52 years
• Eligible business owners can apply for $10,000
• Fund set up in 9 days
• More than 79,500 applications approved
• Almost $795 million paid to business owners
• 26% of applications processed within the Department's 5 business day timeframe
• 43% of the time department returned applications to 'draft' for review
• 1,100+ complaints handled by the Ombudsman
• 44+ denied grant due to typographical errors
• 127+ denied grant for not providing JobKeeper details in time
• 92+ business owners did not receive email reminders about 'draft' status
• $3 million paid out to complainants during investigation
• 5 public servants staffed call centre when the fund opened
• 550 staff when call centre was later outsourced
• 106,000 calls to the call centre from March to November 2020
• More than 12,000 business owners may reapply
• Up to $120 million may be repaid if all meet eligibility criteria and are successful

Glossary

Introduction

Why we investigated

1. In early 2020, the Victorian Government placed Victoria into lockdown to manage the spread of the COVID-19 virus. The lockdown changed community life and placed significant restrictions on businesses.
2. In March 2020, the Victorian Government announced a $500 million economic support package to provide grants to small businesses impacted by the restrictions. As a result, the Business Support Fund (‘the Fund’) was established and provided $10,000 grants to eligible businesses. It was administered by the Department of Jobs, Precincts and Regions (‘the Department’).
3. The Department had a tough job to do in quickly setting up systems to administer more grants in one year than it had done in the previous 52 years. The Department told the investigation half of all small businesses in Victoria received a grant.
4. A chronology of events is included at the end of the Introduction section of this report.
5. The shutdown restrictions severely impacted many Victorian businesses. As one business owner told the Ombudsman:

It has impacted my whole life, my living conditions, I have lost all my income due to the COVID–19 and this was going to help me get my life and business back on track. I’ve lost sleep over this whole situation, I’m struggling to keep my business up and going.

6. Another business owner said:

My mental health has suffered due to watching my life’s work deteriorate in front of my eyes and the feeling of helplessness in not being able to stop this from happening. It has had a huge impact on my personal and family relationships. I have a wife with life threatening health issues and a severely disabled child to care for. I have always prided myself as a hardworking, honest family man who has made his own way in life and who has never asked for a handout. Sadly, today is different … I feel sad, frustrated, angry and defeated that through no fault of my own, I am being penalised for the misinformation provided by [the Department] and the impact this will have on my business, myself and my family. Without this grant, the chances of my business surviving COVID are drastically reduced.

7. In April 2020, pursuant to her remit under the Ombudsman Act 1973 (Vic), the Ombudsman started receiving complaints about the Department’s management of the Fund. Complaints increased exponentially in June and July 2020 and remained in the high hundreds throughout the year.
8. By September 2020, the Ombudsman had received 627 complaints from 468 individuals about the Fund. This rose to 789 complaints from 548 individuals by the end of January 2021.
9. In total, the Ombudsman handled 1,119 cases about the various business support funds by the end of January 2021. This included 957 cases about the first round of the Fund, of which 168 were ‘own motion’ enquiries made with the Department.

10. This represents over eight per cent of the Ombudsman’s jurisdictional work between April 2020 and January 2021.
11. The Ombudsman also handled 80 cases throughout February and March 2021.
12. The Ombudsman attempted to informally resolve these complaints with the Department. On 10 July 2020, the Ombudsman referred 189 complaints about the Fund back to the Department to give it the opportunity to address them in the first instance. Between 17 July 2020 and 21 August 2020, the Ombudsman referred an additional 171 complaints to the Department.
13. The Department said it would provide outcomes to all these business owners by 31 July 2020; and then requested an extension from the Ombudsman to 21 August 2020. The Department provided outcomes to some but not all of these business owners.
14. The Ombudsman referred an additional 61 complaints back to the Department between 28 August 2020 and 18 September 2020, as well as 57 from business owners who had returned to the Ombudsman as the Department had not resolved their complaint. One business owner told the Ombudsman:

It has had a huge financial impact. I was waiting for this money … to pay my rent, insurance, bills and wages now this throw [sic] me back anymore [sic]. I also have a son at home with a major heart condition and I can’t work either because I have to be with him. I am very stressed about this and I haven’t been sleeping at night and really struggling. At home we just rely on my husbands [sic] income our home loan is on hold and we are just making ends me [sic]. So this has had a huge impact in every way possible.

15. In a meeting on 28 August 2020, the Department assured the Ombudsman it would:

• provide outcomes to business owners within 14 business days
• provide regular status updates to business owners
• provide a final outcome letter to business owners whose applications had been reviewed
• provide written outcomes if the Department was unable to contact business owners over the phone.

16. Despite these assurances, the Ombudsman continued to receive complaints about the Fund after 31 August 2020. The Ombudsman decided to conduct an ‘own motion’ investigation pursuant to section 16A of the Ombudsman Act, in light of:

• the volume of complaints
• the vulnerability of the people affected
• information indicating potential systemic problems with the Department’s processes and practices, which had the potential to cause further difficulties for business owners.

17. On 17 September 2020, the Ombudsman notified the Secretary of the Department and the Minister for the Coordination of Jobs, Precincts and Regions: COVID 19 of her intention to investigate the Department’s management of the Fund. The Ombudsman publicly announced the investigation on 21 September 2020.

Jurisdiction

18. The Department is responsible for administering the Fund. Executive Directors at the Department have the financial delegation to approve grant applications to the Fund for eligible business owners.
19. Section 16A of the Ombudsman Act provides that the Ombudsman may conduct an own motion investigation into any administrative action taken by or in an ‘authority’.
20. The definition of ‘authority’ in the Ombudsman Act includes the Department.

Terms of reference

21. The investigation’s terms of reference were drawn from key complaint themes, and included examining the Department’s:

• application and assessment process
• nature and style of communication with business owners
• internal review and complaints processes.

Informal resolution of individual complaints

22. Throughout the investigation, the Ombudsman continued to resolve complaints informally to provide quick outcomes to business owners. Investigations can be protracted, and the Ombudsman was concerned to facilitate certainty for business owners.
23. Resolving complaints about the Fund during the investigation helped many business owners. As one told the Ombudsman:

Thank you so much I have been so ill about this … This matter has been very upsetting and [I] can’t talk about it without crying, I feel I let my business down did I do something wrong I have been asking myself NO I just am not computer smart enough for the application and ended with two entry’s [sic] because the app went down and did the application again.

24. In total, the Ombudsman proposed that the Department reassess 479 applications during the investigation. Of these, 297 applications were subsequently approved, representing almost $3 million in grants. At the time of writing, the Ombudsman continues to informally resolve complaints about the Fund and subsequent funds with the Department.

How we investigated

25. The investigation involved:

• informally resolving complaints about the Fund with the Department
• making enquiries with the Department and proposing how categories of complaints should be resolved
• reviewing documentation provided by the Department including the Fund’s Guidelines, policies and procedures, data, call centre scripts and examples of communications sent to business owners
• reviewing publicly available information about the Fund
• conducting one voluntary interview with a Victorian Public Service (VPS) employee who worked on the Fund’s administration
• reviewing guidance about grant administration including:
  • Standing Directions 2018 issued by the Minister for Finance under the Financial Management Act 1994 (Vic)
  • Department of Treasury and Finance, Better Grants by Design (2018)
  • Department of Finance, Commonwealth Grant Rules and Guidelines (2017)
• reviewing the Commonwealth Ombudsman’s Executive Schemes (2009) report
• liaising with the Victorian Small Business Commissioner and the Victorian Auditor-General’s Office.

26. The investigation focused on the Department’s administration of the first Business Support Fund (the Fund) which opened on 30 March 2020 and closed on 1 June 2020.
27. In determining the facts of the investigation, and considering the nature and seriousness of the matters examined, the quality of the evidence and the gravity of the consequences that may result from any adverse opinion, the Ombudsman is guided by the civil standard of proof – the balance of probabilities.

Anonymity

28. Throughout this report, case studies detail the experiences of some business owners who applied to the Fund.
29. For privacy reasons, the names used in case studies are not the real names of the individuals or businesses involved, except with their permission. Names that have been changed are identified with an asterix.

Procedural fairness and privacy

30. This report includes adverse comments about the Department. In accordance with section 25A(2) of the Ombudsman Act, the investigation provided the Department with a reasonable opportunity to respond to an earlier draft version of this report, and has fairly set out its response in this report.
31. In accordance with section 25A(3) of the Ombudsman Act, any other persons or bodies which are or may be identifiable from the information in this report are not the subject of any adverse comment or opinion. They are named or identified in the report as the Ombudsman is satisfied that:

• it is necessary or desirable to do so in the public interest, and
• identifying those persons will not cause unreasonable damage to those persons’ reputation, safety or well- being.

Background

32. On 16 March 2020, a State of Emergency was declared in Victoria in response to the COVID-19 pandemic. On 21 March 2020, the Victorian Government announced a $1.7 billion economic survival and jobs package to ‘help Victorian businesses and workers survive the devastating impacts of the coronavirus pandemic’.
33. A key component of the package was a $500 million Business Support Fund (‘the Fund’) which the Government said would ‘support the hardest hit sectors, including hospitality, tourism, accommodation, arts and entertainment, and retail’.
34. The Fund is a grant scheme administered by the Department, and its Executive Directors have the decision-making power to provide a grant to eligible business owners.

About the Business Support Fund

35. Following the Victorian Government’s announcement, applications to the Fund opened on 30 March 2020.
36. Business owners were able to apply for a $10,000 grant if they met the eligibility criteria contained in Guidelines: Business Support Fund: COVID-19 assistance to small businesses (‘the Guidelines’).
37. The Guidelines were updated twice during the application process – on 15 April 2020 and 23 April 2020 (known as ‘Stream One’) – and the eligibility criteria were expanded on 5 May 2020 (known as ‘Stream Two’). The Guidelines for Stream One and Stream Two are included in Appendix One.

Business Support Fund – Stream One

38. The original Guidelines required a business to:

• employ staff
• be subject to closure or highly impacted by shutdown restrictions (according to the Deputy Chief Health Officer’s Non-Essential Activity Directions dated 25 March 2020)¹
• have a turnover of more than $75,000
• have a payroll of less than $650,000
• hold an Australian Business Number (ABN) and to have held that ABN at 16 March 2020 (when the State of Emergency was declared)
• have been engaged in carrying out the operation of the business in Victoria on 16 March 2020.

39. On 15 April 2020, the Guidelines were updated to include the definition of ‘a business’:

Businesses are those entities where a business name is registered with the Australian Securities and Investment Commission (ASIC). In the case of a charity, it is registered with the Australian Charities and Not-for-profits Commission (ACNC); incorporated associations are registered with Consumer Affairs Victoria (CAV); and sole traders are identified by ABN registration. Note that any adverse findings against a business will be taken into consideration.

40. On 23 April 2020, the Guidelines were again updated, to:

• clarify how the Department would assess an application if a business was subject to closure, or highly impacted by shutdown restrictions
• include additional information on the annual turnover and payroll requirements.

41. To assess business impact, the Department used the Australia and New Zealand Standard Industrial Classification (ANZSIC) codes. ANZSIC codes are broad industry classifications nominated by a business owner on their ABN registration, reflected on the Australian Business Register (ABR). The ABR contains a search engine for looking up businesses by their ABN.

Business Support Fund – Stream Two

42. On 1 May 2020, the Victorian Government announced the Fund’s eligibility criteria would be expanded to include businesses participating in the Commonwealth Government’s JobKeeper program, regardless of the sector they operated in.
43. The Premier’s press release stated:

Businesses who applied for Business Support Fund payments but were initially not eligible based on their sector classification will be contacted by the Department of Jobs, Precincts and Regions and do not have to submit a new application.

44. Stream Two went ‘live’ on 12 May 2020. The Department invited business owners who had already applied for Stream One and been rejected, to apply for Stream Two. These invitations were sent via email.
45. These business owners were required to provide their JobKeeper number via an emailed link, and attest that the business was a JobKeeper program recipient.
46. Applications for both Stream One and Stream Two closed at 11.59pm on 1 June 2020.
47. The Department told the investigation it continued to accept revised applications from some business owners through to 19 June 2020.

Subsequent Business Support Funds

48. After further shutdown restrictions were introduced, the Government announced more economic support for businesses via two additional funds:

• Business Support Fund – Expansion
• Business Support Fund – Third Round.

49. The Government also announced 13 smaller funds targeted at specific industries. These included funds such as the Licensed Hospitality Venue Fund, the Sole Trader Support Fund and the CBD Small Hospitality Grant.
50. The investigation did not consider these subsequent and smaller targeted funds, although the Ombudsman continues to receive complaints about them. Many business owners applied for support from more than one fund.
51. Up to 31 January 2021, the Ombudsman received:

• 84 complaints about the Business Support Fund – Expansion
• 45 complaints about the Business Support Fund – Third Round
• 33 complaints about the smaller targeted funds.

52. The Ombudsman also received 27 complaints about other Business Victoria matters.

Resolving complaints

53. Soon after a meeting between the investigation and the Department, on 8 October 2020, the Assistant Ombudsman wrote to the Department in relation to 365 complaints. The Assistant Ombudsman proposed that the Department reassess applications where a business owner had made a genuine attempt to apply to the Fund and provide outcomes or review its decisions where appropriate.
54. The Department told the investigation it did not accept the proposal to reassess applications that remained in ‘draft’ when the Fund closed. These were applications the Department had reverted to ‘draft’ status after asking business owners to provide more information.
55. The Department said it would consider its position regarding applications where JobKeeper information had not been provided.
56. On 17 November 2020, the Department agreed to reassess 184 applications. In the following months, the Department continued to reassess applications and worked with the investigation to resolve these.
57. On 23 November 2020, the Department told the investigation it did not accept the proposal to reassess 56 applications. These related to:

• applications rejected because business owners had made keystroke errors when applying, and had not subsequently contacted the Department before the Fund closed
• applications where the Department had evidence it had sent the business owner an invitation to apply for Stream Two and/or a reminder email and they had not responded
• business owners who had attested they were not participating in JobKeeper.

58. These unresolved complaints were considered as part of the investigation.
59. Figure 1 on page 18 shows key dates and actions taken by the Victorian Government, the Department, and the Ombudsman.

Guidelines on grant administration

60. The Fund is a discretionary grants program grants are provided to applicants if they meet the eligibility criteria in the Guidelines.
61. There is State and Commonwealth guidance to assist the Department to establish, implement, and administer discretionary grants programs such as the Fund.

Victorian guidance

62. There are two key documents relevant to administering grant payment schemes in Victoria:

• Standing Directions 2018 issued by the Minister for Finance under the Financial Management Act 1994 (Vic) (‘Standing Directions’)
• Department of Treasury and Finance, Better Grants by Design (2018) (‘Better Grants guide’).

Standing Directions

63. Section 4.2.2 of the Standing Directions provides that in administering grants, public sector management must ensure:

• value for money
• ‘effective and efficient’ administrative controls are established
• the Victorian Government’s Investment principles for discretionary grants (2016) (‘the Investment Principles’) are applied
• the Victorian Government Sponsorship Policy (2019) is applied.

64. The Investment Principles state:

• grants should not be used without first considering alternative policy mechanisms or existing grant programs
• when small grants are used, they should be administered by the organisation that is able to do so most efficiently
• accountability requirements imposed on grant recipients should be proportionate to risk
• the Better Grants guide should be used to provide further guidance when designing and developing new grant programs.

Better Grants guide

65. The Better Grants guide provides advice relating to the different stages of a grants program process: establishment, design, implementation and evaluation.
66. It highlights potential risks associated with grant programs, including:

• pressure to implement programs urgently
• individuals or organisations being treated inequitably
• use of grant funds contrary to the relevant terms and conditions
• awarding grants to ineligible individuals or organisations.

Guidance from the Commonwealth

Commonwealth Grants Rules and Guidelines(2017)

67. The Commonwealth Grants Rules and Guidelines outlines a grants policy framework and articulates key principles including:

• robust planning and design
• collaboration and partnership
• proportionality
• an outcomes orientation
• achieving value with relevant money
• governance and accountability
• probity and transparency.

CommonwealthOmbudsman’s ExecutiveSchemes (2009) report

68. The Commonwealth Ombudsman’s Executive Schemes report examines complaints about various executive schemes over six years. It offers useful guidance about implementing and administering executive schemes.
69. The Executive Schemes report highlights some of the advantages and disadvantages of executive schemes, see Table 2.

Figure 1: Chronology of key events

The Fund’s application and assessment process

Applying for a grant

70. To apply for a grant from the Business Support Fund ('the Fund'), business owners had to complete an online form via the Business Victoria website.
71. Business owners were required to:

• provide information about the business including:
  • the registered business name
  • trading name
  • legal name
  • Australian Company Number (ACN)² and ABN
  • registered address and company website
  • name of trustee
  • number of employees
  • bank account details.
• confirm they met each aspect of the eligibility criteria. Figure 2 on the following page, is an extract of the online form.
• provide their most recent Business Activity Statement (BAS)
• select the purpose(s) the grant would be used for, from the following:
  • meeting business costs, including utilities, salaries and rent
  • seeking financial, legal or other advice to support business continuity planning
  • developing the business through marketing and communications activities
  • support activities related to the operation of the business
• explain the nature of business operation and how the shutdown restrictions had affected the business
• declare that the details provided in the application were true, complete and accurate.

72. Business owners received an email confirming submission and were given a unique identification number for their application.
73. The online form was twice updated to accommodate significant changes in the
    application process:

• 15 April 2020: the Department added a footnote to the Fund’s guidelines to define ‘businesses’. The online form was updated with a warning to business owners to ensure the business name entered was the same as the registered business name.
• 12 May 2020: a question was added to the online form related to a business’ participation in the JobKeeper program.

Figure 2: Extract of online form for the Business Support Fund

Complexities in the application process

74. When the Fund closed on 1 June 2020, over 95,500 applications had been submitted. The Department told the investigation:

• 78,000 grants were paid to eligible businesses within eight weeks of the Fund closing
• almost $795 million was paid to business owners from the Fund
• 99 per cent of applications were processed by 30 June 2020.

75. A significant number of applications were approved and paid without incident. Complexities in the application and assessment process, however, generated complaints to the Ombudsman with potentially eligible business owners not receiving a grant from the Fund.
76. One business owner told the Ombudsman:

It has been so stressful constantly trying to follow this up … I am feeling so upset that during such challenging and stressful times, that my case wasn’t taken seriously or followed up considering I meet all of the eligibility criteria.

77. The main issues identified in complaints to the Ombudsman were:

• The Department returning submitted applications to ‘draft’ to allow business owners to provide additional information. The Department refers to this process as ‘returned for revision’. Some business owners:
  • Uploaded the additional information into the online form but did not navigate through to the end of the form to resubmit. As the form remained in ‘draft’ it is the Department’s position that these applications were incomplete and were therefore not considered for a grant.
  • Claimed they did not receive email from the Department asking them to provide the additional information.
• Minor typographical errors made when applying which meant emails were not received or business names could not be validated.
• Updates to the online form after the eligibility criteria were expanded led to confusion and meant some business owners did not complete the online form correctly.

Applications returned to ‘draft’

78. When a business owner submitted their application, they received a confirmation email, like the one in Figure 3, sent to the email address used to register for the application portal.
79. Some business owners also received a confirmation message in the application portal itself. Figure 4 shows the application portal message.
80. If a business owner did not provide the necessary information when they applied, the Department emailed them requesting further information.
81. The submitted application was then placed back into ‘draft’ to allow the business owner to add the required information.
82. Figure 5 is an example of an email sent to business owners requesting changes to the BAS.

Figure 3: Email confirming submission

Figure 4: Application portal message confirming submission

Figure 5: Email requesting an updated BAS

83. Business owners then needed to:

• access their online form
• upload the required information
• navigate to the end of the online form and ‘submit’ their application again.

84. If business owners did not navigate to the end of the online form and press ‘submit’ again, their application remained in ‘draft’. If an application remained in ‘draft’ after the Fund closed, it was not considered a valid submission and was not assessed.
85. The Department’s email did not make it clear that an application had been placed back into ‘draft’. The emails advised business owners to ‘update the content, attach any required documents and re- submit’. There were no instructions about navigating to the end of the online form to resubmit the entire application.
86. The Department returned one third of all applications to business owners for revision. The Department told the investigation:

• applications were returned for revision 41,178 times, associated with 29,697 unique business owners (some applications were returned to draft multiple times)
• 18,972 of the 29,697 business owners were ultimately provided with a grant
• when the Fund closed, 13,393 applications remained in ‘draft’
• 8,990 of those 13,393 applications returned were for revision
• of the 8,990 applications:
  • 1,743 were considered duplicates as they were identified as being from business owners who already had a successful application in the system that was being processed.
  • 1,796 were identified as being from business owners who had duplicate applications in the system, but neither were yet
    being processed.

87. The Department told the investigation it sent the remaining 5,451 business owners a reminder email before the Fund closed asking them to complete their application and submit it before applications closed.

Problems encountered by business owners – applications reverting to ‘draft'

88. One hundred and nine business owners complained to the Ombudsman about
    their applications being returned to ‘draft’. Over the course of the investigation,
    the Department reassessed 26 of these applications.
89. The remaining 83 business owners were denied a grant despite telling the Ombudsman they:

• met all the eligibility criteria
• successfully submitted an application before it was placed back into ‘draft’
• provided the additional information the Department requested.

90. Complaints showed some business owners had difficulties with the revision process. This primarily related to business owners not realising they needed to resubmit their application after providing the additional information.
91. Observations in complaints to the Ombudsman were similar to those identified by the Department. In July 2020, the Department engaged KPMG to review its complaint handling, and develop a dispute resolution framework for the Fund. The review had two phases:

• developing a framework for resolving ‘escalations’ (that could not be managed by call centre staff) against key performance indicators and a reporting matrix
• an implementation plan, including the finalisation of ‘escalated’ disputes.

92. One product of the KPMG review was a ‘Customer Journey Map’. It identified that ‘[t]he application portal can be confusing e.g. the 'save and preview' button may be confused with the subsequent 'save and submit' button’.
93. Department staff observed ‘[t]he portal does not always clearly show the need to submit additional documentation and only shows the draft nature of the application itself’.
94. A VPS employee who worked on the Fund’s administration was interviewed during the investigation. They said while working for the Fund, they observed many cases where business owners had issues with revision requests, particularly where they related to attaching a BAS:

So many people [were] claiming that when they were asked to attach BAS statements, that they believed they’d done it, but there seemed to be an issue where they’d do it, but then their application was left in ‘draft’ form and therefore never submitted.

…

I kept saying to [management], from the applicant’s end, they think it’s been submitted, like these people honestly do think it’s been submitted. And the argument was that ‘Well, it was left in draft form, therefore it was never submitted’. So I can quote here one of the Team Leaders: ‘In terms of applications in draft, the principle applied is that we can only reconsider where there has been an error with the application at our end’. That was the response.

95. One business owner told the Ombudsman:

[The Department] claimed I should have resubmitted the application. The email wasn't that clear that the application had to be resubmitted again. Apparently the process is, it is first in ‘draft' status then it goes to ‘submitted’ status where DJPR will assess … An email saying we now have all the required information please re-submit would have been useful.

96. This business owner expressed his frustration to the Department:

I rang your Department this morning and was very disappointed after speaking to [...] who referred this matter to his Team Leader. This is particularly the case in these trying economic conditions. First I put an application in on 21st April and was further requested to Submit a BAS statement which I promptly did. I was regularly reviewing the Portal and it kept showing a Status of Draft with no updates (Refer attached). I presumed this was a case of slow processing due to the high number of applications and would have expected a message if you required anything additional.

97. Another said:

The process was confusing and the email from [the Department] asked to upload the my [sic] BAS which I did. To simply dis-regard my application because I did not re-submit again after I had already successfully submitted is unfair. And in a time when I am doing everything possible to keep my business afloat until this pandemic finishes I feel my application should be approved. I understand if my application was submitted in the first place then I can accept I missed the cut off. But I did everything possible to try and get this grant.

98. Another business owner expressed their frustration with the Department’s communication after their application was returned for revision. They genuinely believed they had submitted it, and even left a note in the application portal after uploading the documents requested. When they contacted the call centre to follow up, they were told their application was ‘well progressed’, but despite this the Department maintained its decision to reject it because it said it sent them a reminder email. The business owner told the Ombudsman:

I should not be penalized for the failures of a badly designed system that has been poorly administered with an initial denial of a legitimate application without any follow up such as a phone call, email or letter with respect to my application.

I believe I have done everything requested of me with respect to the grant application. I request the person in charge of the small business support fund and the Victoria[n] ombudsman to review my application for the business support fund grant and approve it as I am a genuine business in need and the grant will keep my business running now and into the future.

99. In another complaint to the Ombudsman, Case study 1: Leanne, the Department sent a revision request to a business owner but did not specify a date for them to upload the additional information.
100. In Case study 2: Samiye, a business owner received a revision request and submitted a second application with the requested information rather than resubmitting her original application. The Department rejected the second application because it considered it a duplicate.

The reminder email

101. Ninety-two business owners told the Ombudsman they did not receive an email reminding them to submit their application or believed they had done everything required to be eligible for the grant after providing additional information.
102. One business owner said:

Notification was not received with regards to my application being changed back to 'draft' status by Business Victoria. My inbox has never been full, my email address on my application was correct. There is nothing from Business Victoria in my junk or SPAM folders. I received no phone calls or text messages.

In an earlier phone conversation with Business Victoria … the service agent advised they were aware of an internal error that had resulted in submissions being changed back to a 'draft' status without applicants being notified.

As this communication error lies with Business Victoria, the fund surely needs to be reopened to allow this critical payment to be paid to the qualified business's [sic] it promised to support; business' [sic] who submitted their applications in good faith, and in order to survive, prior to the cut-off date of 1 June 2020.

Business Victoria needs to be held accountable for their failings.

103. Figure 6 is a an example of a template reminder email sent to business owners.

Figure 6: Template reminder email sent to business owners whose applications remained in ‘draft’

104. The reminder email could have been confusing for business owners:

• It refers to the application not having been updated although the business owner had uploaded new documents/ information as requested.
• It asks the business owner to submit the application when they had previously done so, and they had received confirmation.

105. Figure 7 is an email the Department sent to a business owner who made a mistake entering his email address in the online form, meaning he did not receive the reminder email. The Department told him it had no control over this issue.

Figure 7: Email sent to a business owner

106. The following case study is another example of a business owner whose application was not assessed because it was in ‘draft’ when the Fund closed. He provided information the Department requested but failed to resubmit his application. He said he found the process confusing.

Unresolved complaints

107. One hundred and twenty-seven business owners who complained to the Ombudsman were denied a grant because their application remained in ‘draft’ when the Fund closed, despite their telling the Ombudsman they met the eligibility criteria.
108. On 8 October 2020, the investigation proposed that the Department reconsider these applications and invite business owners to apply for Stream Two, if necessary.
109. The Department did not accept the proposal, stating that it sent reminder emails before the Fund closed to business owners whose applications remained in ‘draft’.
110. The Department told the investigation (and business owners) it is not responsible for what happens to emails once they leave its system and cannot be held accountable for issues with business owners’ email servers which may send the emails to ‘junk’ or stop them being delivered.
111. An example of an email sent to a business owner denying responsibility for emails once they leave its system, is below at Figure 8.

Figure 8: Email sent to a business owner

112. The Department told the investigation:

From a fairness perspective, it is important to note that reasonable attempts were made on multiple occasions by the Department to contact all applicants who had applications in draft before the program closed to advise them that their application was still in draft and needed to be submitted prior to the close of the program.

Further, making payments to applicants who did not complete the application process would be inconsistent with the Department’s financial accountability obligations.

113. When asked to expand on its financial accountability obligations, the Department said:

[A]pplications need to be submitted by an authorised person who attests that all information provided in the application is accurate and complete. DJPR cannot accurately assess applications where this attestation and the verification by the applicant that information is true and correct has not been made.

In addition, assessing applications that were not submitted within the program’s timeframe creates a challenging probity precedent. In such cases any potential applicant could claim eligibility regardless of submitting a full and attested application after the closing of a program and creates an unfair advantage for a small group of applicants.

Minor typographical errors

114. Some business owners reported they accidentally made a typographical error when completing their application, which resulted in their being denied a grant for which they were otherwise eligible.
115. One business said:

In the context of the stress and anxiety brought on by COVID-19 completely destroying our business, it is quite clear that the spelling of our email address [incorrectly] was an innocent mistake. Our email address was written correctly in 2 out of the 3 places where it was required, however, the Department utilised the one section where our email address had a 1 letter-spelling mistake.

…

It is not reasonable or fair, that a 1-letter mistake in an email address should be used as justification to deny a grant payment to which the Department admits we are eligible for.

Errors entering email addresses

116. The Ombudsman received 16 complaints about minor errors when entering email addresses. This meant the business owner did not receive subsequent communication from the Department about their application.
117. This was particularly critical where the Department had sent business owners emails which required action before the Fund closed, including:

• revision requests
• invitations to apply for Stream Two and to provide their JobKeeper details.

118. When the Ombudsman brought this to the Department’s attention, the Department maintained its decision to reject these 16 applications despite the business owners’ honest mistakes.
119. Late in the investigation, on 10 February 2021, the Department confirmed it will review these complaints and reassess them on a case-by-case basis.
120. One business owner told the Ombudsman they did not receive these emails because of a one letter mistake in their email address, and expressed their frustration at the inconsistent advice received from the Department:

In the last 6 months we have gone from being told to wait for an answer, to being told we were ineligible, to being told we may have actually been eligible but we didn’t respond to emails (which we never received), to complete silence from the business area, to being told that even though we were eligible for the funding – because of a 1-letter mistake in our email address – we had been rejected.

121. In the following case study a business owner accidentally misspelt their email address in the online form. This meant he did not receive subsequent correspondence from the Department and missed the chance to have his application considered under Stream Two.

122. In the case study below, a business owner incorrectly entered his email address in the online form. Despite contacting the call centre on multiple occasions, this error was not identified until after the Fund had closed and he was denied the grant.

Errors entering other information in the online form

123. The investigation also reviewed cases where business owners had made minor errors entering business names. This meant the Department was unable to assess ABNs correctly and applications were rejected.
124. Under the business name field on the online form, the Department provided an instruction: ‘[p]lease ensure the business name listed here matches your ASIC, ACNC or CAV-registered name’. The business name validation process required the details entered on the online form to be an exact match with the relevant regulator’s records.
125. In the following case study, a business owner entered their business name as a single word in the online form, instead of their full registered business name which was three words. The Department declined their application as a result.

126. In the case study below, a business owner’s application was rejected as the ABN he listed was linked to a family trust. The trust had two businesses associated with it and he entered the wrong one.

Unresolved complaints

127. Twenty-eight business owners who complained to the Ombudsman were denied a grant because of minor keystroke errors in their application.
128. On 8 October 2020, the investigation proposed the Department reconsider these applications and invite business owners to apply for Stream Two, if necessary. A month later, the Department agreed with the proposal, saying this aligned with processes which had been introduced for subsequent funds.
129. On 2 November 2020, the Department agreed with the proposal, saying this aligned with processes which had been introduced for subsequent funds.
130. However, the Department did not take any action on the proposal until 10 February 2021, and the Ombudsman continued to receive complaints from business owners whose applications were rejected because of minor typographical errors.
131. In between times, the investigation informed these business owners that the Ombudsman was unable to informally resolve their complaints with the Department.
132. Responding to a version of the Ombudsman’s draft report, the Department stated:

We acknowledge that applicants who initially made keystroke errors when entering their email addresses did not receive these or subsequent notifications from us. The Department agreed to reassess these applications and has proactively contacted applicants to resolve these issues.

ASIC registration requirements

133. The Commonwealth Grants Rules and Guidelines (2017) state:

grant agreements are an opportunity to clearly document the expectations of all parties in relation to the grant … [b]oth officials and grantees should clearly understand conditions in the grant agreement.

134. While the requirement to be registered with a relevant regulator is not unreasonable, many business owners had already started their applications and were not aware of the update to the Guidelines on 15 April 2020 which added a definition of ‘business’.

135. The Department told the investigation it was guided by the definition of a business in the Business Name Registration Act 2011 (Cth). Where a business was not registered correctly it was, in the Department’s view, carrying on a business unlawfully and should not be eligible for the Fund.
136. The Department told the investigation 343 business owners applied before 15 April 2020 and were rejected as their businesses did not meet the eligibility criteria.
137. The Ombudsman received 98 complaints from business owners who had been deemed ineligible for the grant because their business name was not registered with ASIC on 16 March 2020.
138. In one complaint, the Department had incorrectly assessed a business owner as ineligible due to not being registered with ASIC, when they were exempt from registration. This is discussed in case study 9.
139. Two categories of complaints related to registration with ASIC:

• Businesses that were not registered with ASIC on 16 March 2020 because:
  • the business name was never registered
  • the business name had been cancelled.
• Businesses that were not registered with ASIC on 16 March 2020 because their registration had lapsed

140. ASIC told the investigation that if a business name had never been registered or had been cancelled, ASIC would register or re-register that business name from the date the business owner contacted ASIC. However, if a business name registration had lapsed but not yet been cancelled, it would backdate the registration to the previous registration expiry date.
141. The Department advised the investigation it would not approve applications for businesses never registered with ASIC or the relevant regulator. The investigation agreed this approach was not unreasonable.
142. The investigation proposed that business owners who had rectified and backdated a lapsed registration should have their application reassessed.
143. The Department agreed, but said the onus was on the business owner to approach the Department once they had fixed the lapsed registration, before it would reassess the application.
144. In the case study below, a business owner waited over six months to receive the grant after renewing her lapsed registration, having initially been rejected.

Unusual business structures

145. The online form confused some whose businesses were not structured as ordinary trading companies, or which were registered with a regulator other than ASIC. These included businesses that:

• were exempt from the requirement to have a registered business name
• had a trust as a business name
• could not demonstrate a clear connection between the business name and their ABN.

146. The Ombudsman received 18 complaints from business owners whose businesses would otherwise have been eligible for the Fund, but which were assessed as unsuccessful because of the way the Department viewed their structure.
147. Problems arose because the details of these business structures did not clearly fit into the fields available on the online form. This made it difficult for the Department to verify information.
148. In the case study below, a business owner was denied a grant because their business name was entered incorrectly on the online form. In their case, a trust was established as their business’ main trading entity and was managed by a separate company acting as trustee. This company was registered with ASIC while the trust was not.

149. Some business owners were not required to have a registered business name and told the investigation the Department had incorrectly assessed them as ineligible.
150. The following case study is an example of a business owner who was initially unsuccessful because of an unusual business structure. This business was not required to have a business name registered with ASIC as it was registered with another regulator.

151. In a meeting between the investigation and the Department on 13 January 2021, the Department agreed to reassess applications from businesses with exemptions from ASIC registration, on a case-by-case basis.
152. On 9 February 2021, the Department told the investigation if business owners applied with their trust ABN and a business name and/or ACN registered with ASIC, it would assess their applications when it could confirm the entities were linked. The Department said it would seek further information from business owners in cases referred by the Ombudsman or if the business owner complained by contacting the call centre.
153. The Ombudsman referred 72 cases to the Department where business owners had been rejected because of complexities related to ASIC registration. The Department told the investigation it:

• reassessed seven after further evidence was provided
• approved 25 applications
• maintained its decision to reject one application
• was unable to contact 39 business owners but remains open to reassessing their applications if further information is provided.

154. Responding to a version of the Ombudsman’s draft report, the Department stated:

[I]n assessing BSF applications for businesses operating under a trust structure, it is the Department’s policy to accept applicants who applied with their trust ABN and provided a business name and/or ACN that were registered with ASIC prior to, or on 16 March 2020. After identifying in-program that some applicants inadvertently applied using the incorrect business name (such as a trustee name), we implemented a remediation path and have endeavoured to work directly with impacted applicants to resolve this issue.

Throughout the investigation your Office has escalated 72 cases linked to this assessment process for our further review. The Department has contacted each one of these cases to request further evidence to assess their application. Of those, seven have provided further evidence and been reassessed – 25 received a successful outcome and one remained unsuccessful.

The remaining 39 have been contacted several times, with their complaints fully investigated and found ineligible based on the evidence provided. Should any additional evidence be provided to establish a link between the two company structures, the Department will reassess their applications accordingly.

Update to online form during application process

155. On 1 May 2020, the Victorian Government announced the Fund’s eligibility criteria would be expanded to include businesses participating in the Commonwealth Government’s JobKeeper program, regardless of the sector they operated in.
156. On 12 May 2020, a question was added to the online form regarding a business’ participation in the JobKeeper program.
157. As applications to the Fund opened on 30 March 2020, the online form was updated during an already ‘live’ application process, with some business owners already part way through filling out the form.
158. As part of the update, the Department added a section to the online form under the heading ‘Stream Two – Application’. An extract is following at Figure 9.
159. The Department told the investigation it emailed 22,405 business owners on 12 May 2020 who were ineligible under Stream One as they operated in a sector that was not initially targeted to apply for Stream Two.
160. Attached to this email was a JobKeeper Enrolment Declaration form which business owners were required to complete and submit via a link in the email to be considered for a grant under Stream Two. An example is following at Figure 10.
161. The Department said it also sent a reminder email on 20 May 2020 to over 8,000 business owners who had not responded to the 12 May 2020 email.

Figure 9: Extract of section added to the online form on 12 May 2020

Figure 10: Example of email sent to a business owner inviting them to apply for Stream Two

162. Despite the reminder email, complaints to the Ombudsman showed some business owners were unaware:

• the online form had been updated, or
• the eligibility criteria had been expanded

163. This meant they did not provide their JobKeeper information and/or did not select the option in the online form for their application to be considered under Stream Two.
164. This related to business owners who:

• started their application prior to but submitted it after 12 May 2020
• submitted their application prior to but received a revision request after 12 May 2020.

165. These business owners did not receive the 12 May 2020 email, or the 20 May 2020 reminder email.
166. They may have been ineligible for Stream One but eligible for Stream Two; but because of the confusion caused by the update to the online form and because they did not receive an email inviting them to apply, they did not have the opportunity to apply for Stream Two.
167. One business owner told the Ombudsman:

I am really disappointed as the point of the … [Fund] was to help businesses but instead we missed out on the money due to their wrong advice. If I had reapplied like I wanted to – we would have been fine. I trusted their advice and in doing so – missed the grant.

168. If business owners had started their application before the online form was updated, the Department considered it the business owners’ responsibility to check the form for any updates and to complete the Stream Two section if applicable, before they pressed ‘submit’. There was no warning at the end of the online form about the update.
169. The investigation reviewed an internal departmental email sent on 14 August 2020 about the update to a range of staff working for the Fund.
170. The email said ‘[a]nyone applying/ resubmitting on 12 May and onwards were required to input their JK [JobKeeper] details by themselves in Q 7’. The email further stated these people were never sent an email about the introduction of Stream Two because:

[I]t was perceived that … [they] were in the application form and should have seen the introduction of Q7 – on the consumer law principle Let the Buyer Beware. These people would have not got a reminder either as they have finalised their application through either submitting or resubmitting.

171. The application portal did not include a warning to business owners to check their ‘junk’ inboxes for emails from the Department.
172. At interview, a VPS employee who worked on the Fund’s administration, said they observed a common problem with applications submitted shortly after the expanded eligibility criteria was announced:

[W]hat I was finding in the calls was people had no idea that this [the update to the form] had happened … anyone who had already started the application wasn’t advised, because it was just assumed that because the system updated, it was up to people to literally discover that themselves.

173. The Department told the investigation it conducted a broad marketing campaign about the introduction of Stream Two, including in the media, on social media and with relevant industry associations.
174. In the case study below, a business owner started their application in late April 2020 but submitted it on 13 May 2020 – one day after the online form was updated. They were unaware it had been updated with the additional section, so did not provide their JobKeeper details.

175. In another case, an accountant applied to the Fund on behalf of a client shortly before the Department updated the online form. She tried to follow up to provide her client’s JobKeeper details and ensure the application was assessed under Stream Two.

Resolving complaints

176. On 8 October 2020, trying to informally resolve these complaints with the Department, the investigation proposed that the Department obtain the JobKeeper information and reassess these applications.
177. An Executive Director at the Department said the Department would:

work to identify the number of applicants whose application form was in draft the date when the second stream (JobKeeper stream) of the BSF1 [Business Support Fund 1] went live, that were subsequently assessed as ‘industry-ineligible’ but did not apply for the JobKeeper stream.

178. The Department subsequently confirmed it would invite all these business owners to provide their JobKeeper information and have their application assessed under Stream Two. The Department subsequently contacted 41 business owners for their JobKeeper information and reassessed their applications.

JobKeeper information provided in the wrong format

179. One hundred and twenty-seven business owners who complained to the Ombudsman had their applications rejected because they did not provide their JobKeeper details before the Fund closed and were therefore not considered for Stream Two.
180. Complaints to the Ombudsman highlighted cases where applications were declined because a business owner did not provide their JobKeeper information in the format specified by the Department. This included cases where business owners:

• responded to the email inviting them to apply under Stream Two instead of clicking the embedded link
• added their JobKeeper information to the application portal without completing the required declaration.

181. As one business owner said:

Due to Covid I was not able to work as a domestic electrician, only able to do emergency work … I am on job keeper and to be told I did not get the $10000 grant because the wrong form (which was the only one available at the time) was filled in seems very wrong.

182. In the following case study, a business owner provided their JobKeeper details by responding to the email inviting them to apply to Stream Two. The Department rejected their application as they had not provided the details via the link in the email.

183. In the next case study, an accountant applying on behalf of a business owner mistakenly selected ‘no’ to the question asking if they would like to be assessed under Stream Two. They realised the error on the same day they applied and added a note in the application portal with the business owner’s JobKeeper details. Despite this, the Department did not assess the application under Stream Two.

Resolved complaints

184. On 8 October 2020, trying to informally resolve these complaints with the Department, the investigation proposed that the Department obtain business owners’ JobKeeper information and reassess these applications.
185. The Department agreed with the proposal. In total, the Department reassessed 36 applications where business owners had provided their JobKeeper details but not in the format requested.

The Department’s communication with business owners

186. Many business owners raised concerns about difficulties communicating with the Department, including:

• trouble getting information about the status or progress of their applications
• delayed responses or receiving no response at all
• incorrect, conflicting, or generic information provided by the Department’s call centre.

187. It was evident that communication problems exacerbated the stress, anxiety and frustration many business owners were already experiencing.
188. One business owner said:

I found that during our application the communication from [the Department] was very poor and totally frustrating. Our business has been severely effected [sic] by the state government’s covid restrictions and is now hanging by a thread. Numerous times we followed up on our application prior to the cut off date, but each time we were told that it was be [sic] reviewed and at no time was it made aware that our application was incorrect or rejected.

Principles of good customer service and communication

189. The investigation considered the principles of good customer service drawn from the Ombudsman’s Service Delivery Charter, and its application to the Department’s administration of the Fund.
     
190. Key principles of the Charter include:

• Communication: keeping people informed, including acknowledging receipt of correspondence, keeping a person updated while a matter is looked into, advising them of key timeframes, and providing an outcome once a matter is finalised.
• Transparency: providing reasons for decisions.
• Accessibility: ensuring all members of the community can access the organisation and providing different means by which people can make contact.

191. Good customer service promotes community trust and confidence in the public sector.
192. The Victorian Government’s Better Grants by Design (2018) (‘Better Grants guide’) and the Commonwealth Ombudsman’s Executive Schemes (2009) report illustrate some important considerations about communication when designing grant schemes.
193. The Better Grants guide suggests agencies:

• clearly define the roles and responsibilities of everyone involved in the program to ‘ensure robust governance and accountability frameworks are in place’
• consider whether staff require training and are aware of relevant departmental procedures and available support
• make sure information is accessible to applicants from all backgrounds and that contact details for further information are included.

194. The Executive Schemes report highlights the importance of agencies following principles of good administration, particularly in relation to:

• decision-making processes
• record keeping by decision-makers
• ensuring staffing resources are adequate, including ensuring investigators and decision-makers have proper skills and access to training
• giving applicants adequate information when they are notified of decisions
• ensuring internal review processes add value to the decision-making process and act as an effective check.

The Department’s call centre

195. Before the Fund opened, the Department’s call centre was staffed by five Victorian public service employees, based out of the Department of Premier and Cabinet.
196. After the Fund was announced, the call centre was unable to manage the volume of contact from business owners, so in March 2020, the Department engaged external contractors to operate the call centre. The outsourced call centre expanded from 15 staff in the beginning to 550 staff at its peak.
197. The Department told the investigation its call centre was not established to respond to enquiries solely about the economic support packages. Call centre staff simply responded to enquiries about the various business support funds as well as general enquiries about operating restrictions for businesses in Victoria.
198. Between 28 March 2020 and 22 November 2020, the call centre received 106,123 calls about the various funds, with calls peaking in June.
199. The Fund closed on 1 June 2020. Between 1 June 2020 and 3 July 2020, the call centre received 17,443 calls; 9,472 of these were received in the first six days of June 2020.
200. Figure 11, provided by the Department, shows funding enquiries to the call centre between 28 March 2020 and 22 November 2020.

Figure 11: Enquiries to the call centre between 28 March – 22 November 2020

Contacting the call centre

201. Business owners were able to contact the call centre by calling 13 22 15 or emailing info@business.vic.gov.au. This was the central email inbox for the call centre, but the Department also contacted business owners from several other email addresses. Many business owners responded to these other email addresses directly.
202. The use of multiple email addresses was highlighted as a communication issue in the KPMG review:

The department does not have a centralised communication channel and methodology to ensure communications are coming from the same place.

203. The KPMG review also identified problems with the call centre staff’s inability to respond to business owners’ enquiries consistently and accurately, as they did not have the capacity or knowledge to do so.
204. The KPMG review identified:

• frontline staff are stretched and do not have time to reply to all customers quickly and consistently
• the department is unable to consistently communicate updates to customers due to both a lack of capacity (people), system (technology) and capability (complaints handling skills)
• staff sometimes provide incorrect guidance over issues due to their limited knowledge over the entire process, despite their best efforts.

The call centre’s inability to access the application portal

205. Call centre staff were given general information about the Fund and answers to Frequently Asked Questions to respond to business owners’ enquiries. They were not, however, given access to the application portal and were unable to provide tailored advice to business owners about their applications.
206. In the KPMG review, a call centre staff member reportedly observed:

It is difficult to find out more information on a case-by-case basis for each customer to provide them with more detail and insight into their application outcome …

Although call centre staff may want to help and escalate issues on behalf of the customer, their impact is often limited.

207. The Department told the investigation call centre staff were not given access to the application portal because it houses sensitive personal and commercial information, and that it is the Department’s policy that ‘external’ staff are not given access. This information is housed on the GEMS database, the Department’s information management system.
208. The Department said the call centre staff (as external contractors), while bound by the Information Privacy Principles, were not bound by the Code of Conduct for Victorian Public Sector Employees which requires personal information to be handled according to relevant legislation and public sector policies.
209. The investigation notes the Victorian Government’s Supplier Code of Conduct (2019) (‘the Supplier Code’) provides standards for suppliers doing business with the government. The Supplier Code defines a supplier to mean ‘any entity that supplies goods or services, including construction works and services, to the State’.
210. The Supplier Code describes the minimum expectations of suppliers in the areas of: integrity, ethics and conduct; conflict of interest, gifts, benefits and hospitality; corporate governance; labour and human rights; health and safety; and environmental management.
211. In relation to professional conduct, the Supplier Code states:
     
     Suppliers are expected to conduct themselves in a manner that is fair, professional and that will not bring the State into disrepute.

212. In relation to confidentiality:
     
     Suppliers must not improperly use any private, confidential or commercially sensitive information in its possession relating to or in connection with its dealings with the State.

213. The Victorian Public Sector Commission’s (‘VPSC’) Guidance for Managers Engaging Contractors and Consultants explains different employment arrangements and why it is important for the Code of Conduct for Victorian Public Sector Employees to apply to anyone working in government:
     
     Contractors engaged in or by the department (including contractors engaged through an employment agency) are performing a public sector function when they:

• supervise public sector employees;
• undertake work that is of a similar nature to the work undertaken by public sector employees at a premise or location generally regarded as a public sector workplace; or
• use or have access to public sector resources or information that are not normally accessible or available to the public.

214. The contractor staff working in the call centre were performing a public function. The work was of a similar nature to that undertaken by Department staff who were working alongside them in the call centre. As noted in the VPSC’s Guidance for Managers Engaging Contractors and Consultants:
     
     Certain contractors are required to comply with the code because they are performing a public sector function. It doesn’t matter to the public whether the government service is being provided by an employee or a contractor. They expect the same high standards of integrity.
215. The investigation suggests that call centre staff were bound by the Code of Conduct for Victorian Public Sector Employees by implication, or as a minimum, were bound by the Supplier Code. The Information Privacy Principles deal with wrongful use of personal information. The call centre should have been granted access to the application portal.
216. The investigation asked the Department whether it had considered engaging current Victorian public service employees who are expressly bound by the Code of Conduct for Victorian Public Sector Employees, writing this into the contract with the external contractors, or otherwise providing appropriate training. The Department responded:
     
     The Department did not include compliance with the VPS Code of Conduct into the contract for the outsourced call centre due to the risk posed with granting access.
     Access to GEMS provides access to highly confidential and commercially sensitive information stored within the GEMS database such as:

• Business (commercial-in-confidence and client engagement) agreements
• Natural persons grants
• Skilled migration applications
• Applicant personal banking details
• All of which can be easily amended.
  
  The risk associated with external agents, contracted at speed to support our urgent response to a rapidly developing and complex situation was significant.

217. The following case study is an example of two business owners who were unable to obtain relevant information from the call centre, which in turn negatively impacted the outcome of their application.

218. In the following case study, a business owner contacted the Department several times but received no assistance or return calls.

The call centre’s record keeping

219. The Department began recording calls to the call centre from 10 July 2020. Prior to this, call centre staff kept a log of each call. Call logs are a short summary of the discussion and information provided to business owners.
220. Below is an example of a call log from two calls Galen* and Anita* made to the call centre. Their case study is detailed above.
221. The call logs were all very brief. Most were only a few sentences and did not consistently include details of what information was given to business owners by call centre staff.
222. The investigation often found it difficult to reconcile the information provided by complainants with the information in the call logs. In circumstances where business owners alleged they were, or were not, told important information about their applications to the Fund, the investigation could not verify what was actually said from the call logs.
223. The fact the Department did not record incoming calls to the call centre until after 10 July 2020 did not breach any legislation. Recording calls, however, is a ‘best practice’ approach.
224. The Commonwealth Grants Rules and Guidelines state:

Record keeping is … a key component of good grants governance and accountability. Good record keeping by officials will assist in meeting accountability obligations, demonstrate compliance with the CGRGs and the resource management framework, and show that due process has been followed in actions and decisions.

225. It is concerning that the Department did not initially record calls or retain more detailed records of phone calls. The Public Records Office of Victoria’s Standards relating to operational management Operational Management Standard PROS 19/04 (2019) – state that record keeping requirements must be addressed when systems are being developed. The Standards apply to contractors delivering services on behalf of a public office as well as Victorian public service employees.
226. There were also a significant number of business owners who alleged they contacted the call centre at times, or at a frequency that was not reflected in the relevant call logs. The investigation is not in a position to determine whether calls were made and not logged.

Figure 12: Example call logs

Confusion about where the Department was sending correspondence

227. When applying to the Fund, business owners were required to enter their email address twice:

• first, when setting up a profile for the application portal
• second, in the personal details section of the online form.

228. Some accountants and authorised representatives applying on behalf of business owners entered their own email address in the profile for the application portal and the business owners’ email address in the online form.
229. The Department confirmed:

• before an application was submitted (while it was saved and in ‘draft’), emails were sent to the address provided in the profile for the application portal
• after an application was submitted, emails were sent to the address provided in the online form.

230. This process caused problems for some business owners who were anticipating correspondence to one email address while it was being sent to a different email address, or who had correctly entered an email in one field and incorrectly in another.
231. The Department told the investigation it used a ‘no bounce back’ system when sending emails to business owners. It said this was because emails were auto generated from its Salesforce system and that there was no simple way for it to identify when emails bounced back. This meant that if a business owner accidentally made a mistake entering their email address, they would not receive the email and the Department was unable to verify whether the email had been sent and received.
232. In another case, a business owner made an error entering his email address when creating his profile for the application portal. The business owner, Abdullah* entered his email address as ‘abdullah@financepp.com.au’ rather than ‘abdullah@financeppp. com.au’. As a result, he did not receive an email from the Department advising him to upload a BAS in a different format. The Department’s ‘no bounce back’ system meant it was unaware the email had not been delivered. When the business owner realised his error, the Fund had closed.
233. Responding to a version of the Ombudsman’s draft report, the Department stated:

In subsequent programs, a cross-verification of email address was implemented to mitigate applicant error. This ensures applicants confirm their email address before submission. We have also introduced a notification system for emails returned from a recipient’s intended address (‘bounce- backs’) which enables follow up of applicants who did not receive email updates.

Accessibility issues

234. The Victorian Government’s Accessibility Guidelines for Accessible Communications (2019) provides standards for making information easy to read and understand. These guidelines are particularly targeted at making government communications accessible for people with disabilities, but state that the Government should also consider the communication needs of people:

• recovering from accidents or illness
• with chronic health issues
• who are elderly
• for whom English is a second language or who have low literacy.

235. Business owners were required to apply to the Fund through the application portal. Many may not have been familiar with government grant processes and found the online process difficult. This was more keenly felt by those not adept at using computers, or those with a disability or other communication difficulties. Some business owners had family members or friends help them with the process, or paid accountants or other representatives to apply on their behalf.
236. One business owner said:

I feel I was denied the $10K grant because of a failing in the Business Victoria website and its lack of user friendliness especially to those of Us who are ESL clients.

…

It has caused me severe mental and financial stress. I am not well fluent in English and have to rely on assistance with these business tasks as I can assure you their Business Victoria website has no facility for any second languages.

237. When interviewed by the investigation, a VPS employee who worked on the Fund’s administration said they observed accessibility issues with the application process:

I had several older applicants who just really were quite confused about the process, about what they were being asked to do or attach and how, which then led to these situations with forms being left in draft form … I have to say even for me, someone who is quite educated … that even I found some of [it] so, so confusing. So I can only imagine that for many of these individuals, who are probably already highly stressed in a crisis situation, that you know, some of it was very hard to [navigate].

238. The Department told the investigation that if people had trouble accessing or filling out the application, they could contact the call centre and someone would walk them through the process.
239. The Department said it translated information about the Fund into Vietnamese, Traditional Chinese, Simplified Chinese, Hindi and Punjabi. It also said it included contact details on program pages for business owners who did not speak English or who had speech or hearing impairments. These were available on the Business Victoria home page when the Fund closed but were not available when the Fund first opened.
240. The Department also ran a social media campaign in several community languages and engaged with stakeholders to promote the Fund to culturally and linguistically diverse business owners.
241. Despite this, the KPMG review identified:

• ‘Customers with special needs and language barriers could have found it difficult to complete the form as it could not be converted into other languages’
• ‘Consideration for customers with special needs, language barriers and limited digital literacy was not reflected in the design of the application portal.’
• ‘Consideration for applicants with special needs or applicants who had limited English capability had not been applied to the portal,'

242. The following two case studies demonstrate the unique issues faced by some business owners completing the online form.

243. Responding to a version of the Ombudsman’s draft report, the Department reiterated it had taken steps to ensure information about the Fund was accessible:

The Department has made improvements to ensure greater accessibility and that clearer more direct language is used. Business Victoria also provides content compliant with W3C Web Content Accessibility Guidelines.

BSF information (such as eligibility criteria and how to apply) was provided in seven languages and published on the Business Victoria website as PDFs. Incorporating feedback from stakeholders, for subsequent rounds (i.e. Business Support Fund Extension and Business Support Fund Round Three) we also provided this information in HMTL pages to improve discoverability and access. There were more than 2,000 downloads for BSF products and more than 35,000 downloads across all three rounds.

Paid social media campaigns were also translated into seven languages and directed traffic to translated content on the Business Victoria website. Translation services were set up with the Translating and Interpreting Service for business owners requiring these services.

In addition, contact details were also supplied on program pages directing users to assistance for those who have hearing or speech impairments or non-English speaking business owners. When enquiries were received from vision impaired business applicants, the Department called applicants personally and sought permission to use their details to fill in the application form on their behalf.

Delayed responses or no response at all

244. The Department’s original Fund guidelines said it would ‘endeavour to notify all applicants on the outcome of their submitted applications within five business days’.
245. The Department told the investigation that only 26 per cent of applications were finalised within five business days. It said it did not guarantee a five-business day processing period ‘[g]iven the speed with which this program was designed and delivered, and that the program was larger and more complex than any previous grants program’.
246. The Department said the average time taken to process applications was approximately 12.5 business days and:

[the Department] sought to maximise the number of people getting paid within the average timeframe, while simultaneously maintaining a case management approach for applicants with incomplete or incorrect applications.

247. Ninety-one per cent of applications were processed within 30 days, but there were significant delays for other business owners. At 15 February 2021, the Department was still processing 38 applications.
248. The KPMG review noted:

When there are expected delays to response times, customers are not informed adequately leading to a lack of transparency and further frustration.

249. The review also identified:

The inability to advise customers of a timeframe they can expect to hear back or for the department to reach an outcome is a primary cause of heightened emotions and frustration for customers.

250. Some business owners who contacted the Ombudsman were frustrated that they had contacted the call centre and either received a very delayed response or no response at all.

Incorrect, conflicting or generic information provided by the call centre

251. As call centre staff could not access the application portal, they were unable to provide specific advice to business owners. Sometimes, this meant inaccurate or conflicting information was provided.
252. One business owner said:

I would request that all correspondence is directed to me from members of the [escalation team] rather than the frontline customer service team as too much confusion and repetition has resulted from calls to the Business Victoria line.

We are at the end of our tether with this process and increasingly concerned that other small, family run businesses are being put in this awful position.

253. A VPS employee who worked on the Fund’s administration told the investigation they came across ‘several instances’ where ‘it sounded like the call centre had given people the wrong information’:

I just thought that was interesting because anecdotally. I heard that in those early stages of the first round of support, that the call centre didn’t actually have access to GEMS [the Department’s database] … it is just something I’ve heard anecdotally, but when people phoned up, they were only receiving generic information, not information related exactly to their application. And it would seem to me that in many of those cases, people were given the wrong information, just from the examples that they gave …

254. In the following case study, a business owner contacted the call centre multiple times as he was unable to get information about his application’s status after applying and subsequently uploading further documents.

Information provided to ineligible applicants

255. The Victorian Government’s Accessibility Guidelines for Government Communications includes guidelines for preparing plain English versions of publications. They state that ‘[p]lain English refers to written communication that is easy to understand, free of jargon and well structured’.
256. Outcome emails to business owners were written in language that could come across as complex and confusing, bearing in mind the diversity of the intended audience. Some business owners were reportedly confused about the Department’s decision and found it difficult to understand why they were ineligible. When they contacted the call centre for advice, they were unable to get specific information about their application, compounding their problem.
257. The following is an example of the wording in an approved outcome letter sent to business owners:

258. In the following case study, a South Melbourne market business owner applied for Stream One of the Fund and was deemed ineligible. When he was told he could update his ABN details and reapply by a certain date, he contacted the call centre because he was confused.
259. As call centre staff were unable to access his unique information in the application portal, he was incorrectly told on two occasions that the rejection was a mistake. He was eventually told he needed to update his ABN details, but by the time he got that advice it was too late. In a subsequent email, the Department said one of the answers he had given in his application meant he was not considered for Stream Two.
260. Responding to a version of the Ombudsman’s draft report, the Department stated:

In reference to your point that outcome emails to business owners were written in complex and potentially confusing language, we have consulted with key stakeholders to make sure our language is better targeted to the intended program audience. This has included consulting with industry bodies, the Victorian Multicultural Commission and relevant business bodies, local chambers of commerce, local councils and other organisations that also work with English and non-English speaking business communities.

Review process for ineligible applicants

Best practice complaint handling

261. The Public Administration Act 2004 (Vic) articulates public sector values, including that public officials should demonstrate responsiveness by:

• providing high quality services to the Victorian community, and
• identifying and promoting best practice.

262. The Victorian Ombudsman promotes best practice complaints handling. The Complaints: Good Practice Guide for Public Sector Agencies (2016) report (‘the Ombudsman’s Complaints Guide’) states that a core guiding principle of good complaint handling is enabling complaints by having clear and accessible information about complaints processes. Without an accessible complaint system, an agency risks public dissatisfaction and diminished confidence in its performance.
263. A good complaint handling policy should cover:

• how, where and to whom complaints can be made
• how the complaint will be handled, and the steps involved
• the mechanisms for review if the complainant is dissatisfied with the outcome
• key performance indicators, such as response times
• external bodies that may provide assistance or review matters if the complainant remains dissatisfied.

264. Regarding executive schemes specifically, the Commonwealth Ombudsman’s Executive Schemes report emphasises that ‘[o]f particular concern are the restricted review and appeal rights that are available to people who are affected by decisions made under executive schemes’.
265. The Executive Schemes report outlines eight best practice principles for agencies to consider. The principles include ensuring comprehensive, accurate and up to date information is available for applicants.
266. It states the following information should be made available:

• ministerial and policy guidelines as well as simple, accurate material in easily accessible formats
• clear information about application closing dates
• information about any updates to program guidelines as requirements change or ambiguities are discovered
• the process for reviewing decisions.

267. In relation to complaint handling and reviewing decisions, the principles state that agencies must ensure:

• a complaint handling mechanism is established when the scheme is set up
• there is a process for proper internal review by an independent officer
• review officers routinely contact applicants, explain the review process to them if necessary and seek additional information from them as required
• applicants are informed of the reasons for their review decision.

The Department’s complaint handling policies and procedures

Initial stages of the Fund

268. The Fund was established and scaled at speed. The Department had nine days from when the Premier announced the Fund to create and implement the program. There was no opportunity to pilot or test the program design or delivery.
269. The speed of implementation meant it was critical that the Department have an effective complaints and internal review process to help it understand business owners’ experiences applying to the Fund and make improvements if necessary.
270. When the Fund opened, the Fund guidelines and the Business Victoria website did not provide any information about a complaints or review process. The Department told the investigation its internal complaints handling process and procedure applied at this time.
271. Business Victoria is an online resource managed by the Department, not a standalone entity. Business owners applied to the Fund through the Business Victoria website and all outgoing communication to applicants was authored by the ‘Business Victoria Team’. Because of this, it was not clear to business owners that the Department was the Fund administrator or that they could complain directly to the Department.
272. The Department’s Discretionary Financial Benefits Compliance Framework (2019) also applied for this period. The Framework outlines the Department’s legislative obligations under the Financial Management Act 1994 (Vic) and the requirements of the Standing Directions and Instructions (2018) released by the Assistant Treasurer.
273. The Department's Framework states:
     3.4.9 Grant Complaint Management Procedure
     
     The Department is committed to ensure that its grant processes work effectively and fairly for all parties. The Department has developed this Grant Complaint Management Procedure to ensure that grant applicants who may have concerns with a grant process managed by the Department can seek to have their concerns addressed
274. Throughout the investigation, the Ombudsman asked the Department for a copy of its Grant Complaint Management Procedure on several occasions, but it did not provide it. It was not until February 2021, that the Department published a complaints procedure on the Business Victoria website.
275. The Department told the investigation its External Complaint Policy and its Complaint Management Procedure (Group Business Managers) applied when the Fund opened.
276. The Department’s External Complaint Policy adopts principles from the Ombudsman’s Complaints Guide including:

• Fairness – ‘[c]omplaints will be able to be made through an easily accessible form on the department's internet site’
• Transparency and access – ‘[i]nformation regarding the right to complain, how to make a complaint and how the complaint will be handled is available on the departmental website’
• Responsiveness – ‘[c]omplaints will be handled in a timely manner. An indication of the timeframe for resolving the complaint will be provided during acknowledgment – a standard of 28 days will apply from date of receipt of the complaint by the department’.

277. The External Complaint Policy and Complaint Management Procedure (Group Business Managers) are internal Departmental documents and were not available on the Business Victoria website or the Department’s website.
278. These were the only policies and procedures related to complaints or escalation requests about the Fund that were operational between 30 March 2020 and 4 April 2020.

Mid-way through the Fund

279. When the Fund opened, the Business Victoria call centre was staffed by five Department employees. The call centre was quickly overwhelmed. The Department decided to outsource its call centre and staff numbers increased to 15 on 17 April 2020.

Revision requests

280. On 4 April 2020, the Department established an ‘escalation’ process to respond to business owners’ enquiries related to ‘revision requests’. A revision request is where the Department returned a submitted application to ‘draft’ and requested additional information from the business owner (discussed in chapter two of this report).
281. The escalation process involved referring enquiries from business owners to Team Leaders and senior staff where appropriate.
282. The revision request processes reviewed by the investigation did not include timelines for responses to escalated requests.

Review of rejected applications

283. On 21 April 2020, a separate review process for business owners whose applications had been rejected was established.
284. This process included review by an Executive Officer, the ultimate decision maker for all reviewed decisions about eligibility.
285. On 27 April 2020, the Department developed an Eligibility Review and Customer Engagement Plan (‘the Plan’) which outlined discrete grounds for review after an application had been rejected, including:

• confirming payroll tax
• submitting the incorrect registered business name
• submitting the incorrect ABN and industry alignment code
• confirming annual turnover.

286. The Plan and the grounds for review were not publicly available. The Plan did not include timelines for responses to reviews.
287. The Plan’s ‘grants enquiry/escalation process’ listed the Ombudsman, Ministers’ offices and the call centre as places where complaints about the Fund were to be ‘initially assessed’ before being escalated.
288. From April 2020, the Department effectively outsourced its complaints handling function to the Ombudsman. Since then, the Ombudsman has managed 1,119 cases about the various funds representing more than eight per cent of jurisdictional work between 1 April 2020 and 31 January 2021.

After the Fund closed

289. In July 2020, after the Fund closed, and during its review for the Department, KPMG developed a ‘Customer Journey Map’, ‘Customer Decision Trees’ and ‘Escalation Decision Trees’ as well as an internal complaints workflow. These procedures became operational on 13 August 2020.
290. The Department provided review outcomes to business owners via different channels depending on where they lodged their complaint. If business owners contacted:

• the call centre, once their complaint had been escalated and a final decision made, the Department emailed the outcome
• the Ombudsman, and the Ombudsman made enquiries with the Department, the Department provided its outcome via phone
• their local Member of Parliament, and the complaint was escalated to the Department, the Department emailed the outcome.

291. Further information about the changes made to the complaints and review processes after the Fund closed is discussed at paragraph 314.

Figure 13: The Department’s complaints processes

Understanding the outcome

Reasons for decisions

292. The Hon Justice Kirby has commented on the importance of providing reasons for decisions³:

They encourage good administration generally by ensuring that a decision is properly considered by the repository power… They promote real consideration of the issues and discourage the decision maker from merely going through the motions.

293. The Ombudsman’s Complaints Guide states:

[p]roviding clear reasons for decisions displays fairness, transparency and accountability. It helps the complainant understand why you made your decision [and] whether or not you upheld their complaint.

294. It says that good outcome letters:

• briefly describe the complaint and identify the issues
• use plain English and avoid bureaucratic language, acronyms and jargon
• explain the steps taken to investigate or resolve the complaint
• set out any relevant laws or policies in simple language
• clearly identify the outcome and, if you have substantiated the complaint, the remedies you are offering
• provide reasons for the decision
• give the name and telephone number of an officer the complainant can contact to discuss the outcome
• advise the complainant of the Victorian Ombudsman and any other relevant review rights
• are translated into a language other than English where appropriate.

295. The Department told the investigation that when business owners sought reviews, all final decisions about their eligibility were made by the Executive Director, Capture Teams after the escalations team had investigated.
296. The Department’s template outcome email below does not provide reasons for the decision, identify the decision-maker or provide contact details to obtain additional information.

Business owners’ experiences lodging complaints

297. When the Fund opened there was no publicly available information on the Business Victoria website about how to challenge a decision or lodge a complaint. This left some business owners frustrated.
298. In a meeting on 28 October 2020, the Department assured the investigation information about the complaints and escalation processes would be made publicly available to help business owners understand how to complain. This information was not, however, published on the Business Victoria website throughout the course of the investigation
299. Without a publicly accessible complaints and review process, business owners struggled to have their concerns heard. The following case study is an example of a business owner who attempted to seek a review over the course of many months.

300. The following case study is an example of a business owner who tried and failed on multiple occasions to get information from the Department about his application and the review process. He eventually asked for his application to be escalated and investigated as he believed he had not been given a fair opportunity to apply for Stream Two of the Fund. The Department did not respond to his requests for a review until the Ombudsman intervened.

301. In the case study below, a business owner was unaware she had to resubmit her application after uploading further information requested by the Department. The Department said it would not review her case as the Fund had closed.
     

The escalation team’s disbandment and re-establishment

302. From 26 June 2020, less than one month after the Fund closed, when business owners seeking review or wishing to lodge a complaint contacted the call centre, they were informed the Fund and escalations team had closed.
303. Business owners asking for someone else to direct their complaint to were told that ‘no further applications or requests for a review will be accepted’. This left many business owners unsure about how to proceed.
304. Figure 14 shows an email sent to a business owner on 29 June 2020.

Figure 14: Email to a business owner on 29 June 2020 advising the escalations team no longer existed

305. In the case study below, a business owner made a mistake in her online form. She followed up with the Department and it said it would look into it. But it then emailed her almost a month later saying the escalations team was closed and that it could not escalate applications for review or status updates.
306. The call centre received approximately 3,200 status update requests in June and July 2020. Without an escalation team, it was difficult for the call centre to respond to these requests.

Referral to the Ombudsman

307. After the escalations team was disbanded, the Department referred business owners via its automated telephone system and in writing to the Ombudsman to make complaints about grant decisions. See Figure 15 below.
308. Some business owners also received this advice when they called the call centre. One accountant who had applied on his client’s behalf told the Ombudsman:

The chap I spoke with, said you [sic] only option was to contact the ombudsman, to see if they can re-activate the claim.

309. The Department emailed another business owner telling them:

If the outcome comes back positive, we will be happy for you. However if it comes back negative, you may need to escalate it with the Ombudsman since it is the only channel of escalation at the moment.

310. One business owner said the Department’s automated telephone system directed them to the Ombudsman to make a complaint.

Figure 15: Email from the Department referring a business owner to the Ombudsman

311. In the case study below, a business owner was unable to get relevant information about their application from the call centre and were advised the only course of action was to contact the Ombudsman.

312. The investigation met with the Department on 6 July 2020 to discuss concerns about referring complaints to the Ombudsman before it had first attempted to resolve them. In response, the Department agreed to:

• reinstate the escalations team and bolster staff numbers to respond to the ongoing complaints from business owners
• remove the message on the automated phone system telling business owners the escalations team was closed and referring them to the Ombudsman.

313. After the KPMG review, this was affirmed in an internal ‘Complaints Management Workflow’.

Reviews completed after the Fund closed

314. An internal audit of the Fund finalised in September 2020 established that, despite it being a binary process, there were limited grounds for review and appeal.
315. The KPMG review recognised that ‘the current volume of complaints lodged is difficult to manage’.
316. The review recognised the lack of a clear complaints process may have led to inconsistent decisions being made about some business owners’ eligibility:

Currently, complaints are managed by different teams and decisions may have been made at the discretion of the individual assessor to the best of their knowledge and ability. This can lead to inconsistencies as one customer may be granted funds and another in a similar situation to be rejected.

317. Following the review, the Department implemented a ‘Customer Journey Map’, ‘Customer Decision Trees’ and ‘Escalation Decision Trees’ to help it better respond to business owners.
318. The Customer Journey Map identified a number of problems business owners faced throughout the application and revision process. These included:

• Whether an exception was made for business owners was:
  up to the discretion and goodwill of frontline staff who have very little influence over the program and whether exceptions are granted eligibility despite their best intentions.
• ‘The department does not have a detailed framework to help inform customers of their possible next steps and options.’
• Business owners were at times treated differently depending on whether they contacted the Ombudsman or a Minister’s office, rather than the call centre.
• Not all staff had adequate escalation or complaints management skills and experience, and information for the escalation log was collected in an inconsistent way.
• There were inadequate processes to help business owners who had a genuine issue, not of their own fault, that caused them to miss the application deadline.
• Staff did not have the right tools or skills to handle tougher situations presented by business owners.
• Close out communications were rigid, not personalised and lacked transparency.
• Close out communications should include additional detail to describe the deliberation process that has led to the closure of the complaint.

Subsequent business support funds

319. After the Fund closed, the Department implemented a number of changes to the way it communicated with business owners and responded to complaints about the Business Support Fund – Expansion, the Business Support Fund – Third Round, and the smaller targeted funds.
320. Business owners have raised similar issues about these subsequent funds with the Ombudsman. Between 13 July 2020 (when the Business Support Fund – Expansion opened) and 31 January 2021, the Ombudsman received:

• 84 complaints about the Business Support Fund – Expansion
• 45 complaints about the Business Support Fund – Third Round
• 33 complaints about the smaller, targeted funds.

321. The primary issues concerned:

• emails being sent to ‘junk’
• unconventional business structures that resulted in eligible businesses being rejected because of a misunderstanding about which entity was applying and alignment with WorkSafe registration and JobKeeper eligibility.
• minor typographical l errors
• incorrect funds being paid out
• delay.

322. There remains a concerning delay responding to many business owners which is heightening distress and affecting their capacity to operate their businesses. Most business owners who have contacted the Ombudsman have been waiting several months for the Department to make a decision about their application.
323. One business owner who complained to the Ombudsman had her application rejected as she had not seen an email from the Department telling her to check her ANZSIC code. This email had gone to her ‘junk’ inbox, and the Department decided to reassess her application on this basis. This approach is inconsistent with the Department’s approach in other cases the investigation reviewed.
324. WorkSafe registration was introduced as an eligibility requirement for the subsequent funds, and many business owners have had to rectify issues with their registration. The Department has worked with business owners to enable them to fix these issues, but complications have arisen where business structures are more complex. The Ombudsman is continuing to monitor these complaints.
325. Responding to a version of the Ombudsman’s draft report, the Department told the investigation:

To provide greater clarity for applicants about the status of their applications, the Department has adopted an alternate remediation process for similar future programs such as Business Support Fund Extension and Business Support Fund Round Three. For example, instead of returning application forms for revision in draft form, applicants who included incorrect or incomplete information that were assessed as ineligible were invited to re-apply.

326. The Ombudsman continues to engage closely with the Department, and some of the issues the Ombudsman has highlighted have helped guide the Department to better respond to complaints about the subsequent funds and enabled many to be informally resolved.

The Department’s response to the Ombudsman’s draft report

327. On 17 March 2021, the Secretary responded to the Ombudsman’s draft report. Relevant extracts are set out below.
328. The Department said its priority was to ensure all business owners were treated fairly, and the Secretary committed to reassess applications that were left in ‘draft’ when the Fund closed:

We thank you for highlighting the key issue of how the Department managed BSF applications that were still in draft at the close of the program, and therefore were not assessed. As a result of your investigation and engagement with your Office, and recognising the extraordinary situation faced by Victorian businesses at that time, it has become clear that we could have adopted an alternative approach. Consistent with your recommendation, we commit to reassess these applications, to ensure all cases have been fully considered.

329. The Department highlighted the speed with which the Fund was established, and lessons learned and implemented:
     
     The speed of initiating and delivering the BSF required rapid evolution of the Department’s internal infrastructure. Prior to COVID-19, the Department processed around 10,000 grant applications a year through a case-managed model. Urgently adapting to deliver a significantly larger- scale, state-wide business grants program required changes at pace.
     
     Given the unprecedented environment in which the program was implemented, in program adjustments were inevitable. Reflecting the Department’s rapidly evolving experience, lessons were swiftly implemented as we strengthened processes and provided greater clarity and support to applicants.
     

The Department has reconsidered all applications that:

• were assessed as ineligible for Stream One, but did not receive an invitation to apply for Stream Two;
• provided JobKeeper details in the wrong format;
• did not receive a reminder email that their application was in draft and needed to be submitted before the close date;
• made minor keystroke error in the application form, including their email address;
• received a revision request for an application submitted before 12 May 2020. The revision request was actioned after 12 May 2020 and the applicant was unaware the online form had been updated to include Stream 2;
• contacted the hotline and attempted to remedy their application before the program closed; and can now demonstrate that their ASIC registration covered the period outlined in the program guidelines.

The Department also notes the unprecedented circumstances that applied to the design and delivery of BSF as a discretionary grants program. Accordingly, any approaches taken for the treatment of BSF applications are unique to this program.

330. The Department also highlighted that business owners who complained to the Ombudsman represented a small percentage of those who applied to the Fund. By the Department’s calculation, complaints to the Ombudsman represented 0.5 per cent of applications received under the first round of the Business Support Fund. It stated:
     
     While the Department’s existing processes applied to these complaints, we recognised the need to have specific avenues for feedback in relation to our COVID-19 programs. During this time, we strengthened our customer experience team to case manage complex complaints and provide an arms-length review of application assessments against eligibility criteria. In doing so, we have employed specialised staff to work directly with applicants experiencing distress or extreme pressure.
     
     As the Department identified issues as part of our complaints process and worked with your Office to rectify these issues the number of businesses making complaints fell significantly. Subsequent BSF rounds did not experience this volume of complaints to your Office, falling from 0.5 percent of applications to 0.05 percent.

Conclusions

331. The Victorian Government’s shutdown restrictions severely impacted small business owners, many of whom were unable to survive or adapt to changed working conditions. The Government’s ‘Economic Survival Package’ provided welcome support.
332. The Business Support Fund, in its first and subsequent iterations, aimed to provide critical and fast financial support to thousands. The Department told the investigation half of all small businesses in Victoria received a financial grant.
333. The Department had a tough job to do in quickly setting up systems to administer more grants in one year than it had done in the previous 52 years.
334. While acknowledging that most applications to the Fund were processed without issue, the complaints the Ombudsman received suggest circumstances where service and procedural fairness obligations were most seriously tested. The numbers of complaints the investigation reviewed were small in the context of total applications, but were sufficient to establish a number of systemic issues with the Department’s administration of the Fund.
335. The time constraints, complexity of the application process and the inflexibility of the Department’s initial decision-making confused and frustrated many business owners. Its processes fundamentally failed to recognise that many of those applying for grants were facing severe stresses, may not have computer or language skills, or were otherwise more than usually vulnerable to human error in the application process.
336. The Department’s call centre was not fit for purpose, and the way it handled complaints and reviews was lacking. It failed to establish an adequate complaints and review process in the early stages of the Fund. The processes the Department did eventually establish were opaque, and it effectively outsourced its complaints function to the Ombudsman.
337. While the challenges of administering the Fund were undoubtedly considerable, its purpose of supporting small business in a crisis required a degree of flexibility and discretion that was simply missing, and which in many cases coming to the Ombudsman, exacerbated people’s distress.

Application and assessment process

338. Complexities with the application and assessment process generated complaints to the Ombudsman with several thousand potentially eligible business owners not receiving the $10,000 grant from the Fund. The Ombudsman received complaints where business owners:

• did not receive a request to revise their application
• had made a minor keystroke error on their application form
• disputed the Department’s assessment of their eligibility
• had provided JobKeeper details in the wrong format
• had not received an invitation to apply for Stream Two of the Fund.

339. On 2 November 2020, after lengthy negotiation with the Ombudsman’s office, the Department agreed to reassess these applications.

Applications in ‘draft’

340. Complexities in the application process also stemmed from the Department’s decision to place many applications back into ‘draft’ in the application portal. The Department did this when it needed more information from business owners (the ‘returned for revision’ process). Applications were not assessed until the business owner provided the additional information then navigated to the end of the online form and resubmitted their application.
341. Of 13,393 applications left in ‘draft’ when the Fund closed, 8,990 had been ‘returned for revision’. The Department said it sent 5,451 of these business owners a reminder email about completing their application.
342. Some business owners told the Ombudsman they never received this reminder email. Others said they found it in their junk or spam folder after the Department told them it had sent this email.
343. Those 5,451 business owners were potentially eligible for the grant, but their applications were not assessed because they did not resubmit them after the Department had returned them for revision.
344. Given the significant consequences to business owners of not taking specific action to resubmit their applications, the Department should have taken some steps to warn them of those consequences, including suggesting they check their junk or spam folders (not an uncommon business practice).
345. Throughout the investigation, the Department said it would not reassess applications it had returned for revision where the business owner had not navigated to the end of the online form and clicked ‘submit’ again after providing additional information.
346. The Department posited that allowing business owners to resubmit applications in ‘draft’ would jeopardise the integrity of its grants program and set a precedent across all Government programs. It said it was inconsistent with its financial accountability obligations.
347. Since the Fund closed on 1 June 2020 and during the investigation, the Department changed its practices to improve its application processes, and now:

• no longer places applications back into ‘draft’. The Department assesses an application on the information before it. If further information is required, the Department declines the application and provides the business owner with an opportunity to reapply
• maintains a ‘case management’ approach to actively assist business owners to apply for government grants
• communicates with business owners via SMS as well as email.

Minor typographical errors

348. Throughout the investigation, the Department refused to reassess applications it had rejected because business owners had made minor typographical errors when applying, or entering an email address or a business name incorrectly, for example.
349. The Department failed to take a common sense approach to these applications, refusing to reassess them even after the Ombudsman highlighted the harshness of its decisions. The way the Department dealt with these applications was inflexible and would have amplified business owners’ stress. It was also inconsistent.
     For example, Kumar* (Case study 4) was afforded the opportunity to have his application reconsidered, but Henry* (Case study 5) initially was not.
350. Despite agreeing in November 2020 with the Ombudsman’s proposal that it invite these business owners to reapply, the Department did not take any action until the final stages of the investigation. The Ombudsman continued to raise individual complaints about applications being rejected because of minor typographical errors, up to February 2021.

ASIC registration requirements

351. The investigation highlighted that many business owners seek the advice and support of accountants to set up their business and ensure it is operating within the confines of the law.
352. It appears some business owners are not familiar with the complex business structures created for them, such as in Vlado’s* case (Case study 9), or the ASIC registration requirements. Some business owners were unaware their ASIC registration had lapsed until their application was rejected. After seeking advice, many of these business owners reapplied to ASIC and had their registration backdated.
353. During the investigation, the Department agreed to reassess applications where ASIC registration had lapsed but was subsequently rectified and backdated. The Department said the onus was on the business owner to approach the Department once they had fixed the lapsed registration, before it would reassess the application.
354. The Department’s approach to reassessing these applications was, surprisingly, not advertised on the Business Victoria website. Nor was it communicated to business owners whose applications were rejected on this basis. To ensure a consistent approach and to also assist applicants, the Department could and should have done so.

Stream Two of the Fund

355. The Department’s decision to expand the eligibility criteria to include all businesses which were registered for JobKeeper and to update the online form while the Fund was open was confusing. This resulted in many business owners who were eligible for a grant not realising they could apply for Stream Two of the Fund.
356. It is logical that business owners who had applied for Stream One and were ineligible, but who were eligible for Stream Two of the Fund, would attempt to reapply if they had the information about how to do so.
357. The Department put the onus on business owners who had started their application before the online form was updated, to know about the new eligibility criteria.
358. Pleasingly, during the investigation, the Department agreed that this approach was unfair and agreed to invite these business owners to apply for Stream Two, subsequently contacting 41 business owners for their JobKeeper information and reassessing their applications.
359. But the Department’s approach to inviting business owners whose Stream One applications were rejected to apply for Stream Two, was inflexible. Refusing to accept applications from business owners who had provided JobKeeper information but not in the format requested by the Department, was wrong.
360. The Department initially rejected these applications. Following negotiations with the Ombudsman, it subsequently agreed to reassess them. The Department has reassessed 36 such applications from business owners.

Communication

The outsourced call centre

361. The Department outsourced its call centre – the central point of contact for business owners – and did not provide call centre staff access to the Department’s information management system, on the grounds that it contained sensitive information and those staff were not bound by the Code of Conduct for Victorian Public Sector Employees.
362. This created significant problems for business owners trying to obtain information and assistance, and effectively resulted in a call centre that was not fit for purpose. Without access to the unique information about applications and their progress, staff could not give business owners appropriate advice or alert them to issues with their applications, including remedial action they needed to take.
363. Compliance with the Code of Conduct for Victorian Public Sector Employees was not expressly referred to in the call centre contract, but the Victorian Government’s Supplier Code of Conduct provides standards for suppliers doing business with government. These standards adequately cover confidentiality by stating that suppliers must not improperly use any private, confidential or commercially sensitive information obtained during its dealings with the State.
364. Call centre staff should have been in a position to give advice about the details or status of an application or to refer the matter for direct follow up by a Department employee.

Communication and call recording

365. Before an application had been successfully submitted, the Department emailed business owners using the address provided in the profile for the application portal. After the application had been submitted, it emailed using the address provided in the online form. This process caused problems for some business owners who were anticipating correspondence to one email address while it was being sent to a different email address, or who had correctly entered an email in one field and incorrectly in another, or whose accountants had entered their own address in one field and their client’s in another.
366. The Department did not use a ‘bounce back’ email service. It said this was because emails were auto generated from its Salesforce system and that there was no simple way for it to identify when emails bounced back. But this meant the Department was unable to follow up with business owners who made minor typographical errors in their application, and resulted in many business owners complaining to the Ombudsman.
367. The Department did not record calls to its call centre until 10 July 2020, following a meeting with the Ombudsman when this issue was raised. The Department relied on notes taken by call centre staff which often lacked detail. As calls were not recorded until after the Fund closed, the investigation was unable to verify evidence about call contact from business owners or the Department.

Information provided to ineligible applicants

368. Many business owners were not familiar with Government or grants processes, and found it difficult to understand why they were ineligible and the reasons their applications were rejected.
369. Outcome emails to business owners were written in language that could have come across as complex and confusing. The Department’s template outcome email to business owners did not provide reasons for the decision, identify the decision- maker or provide contact details to obtain additional information.

Complaint handling

370. A core principle in delivering services is to have a sound complaint handling operation. To start with, agencies should enable complaints by having clear and accessible information about complaints processes. Without this, an agency risks public dissatisfaction and diminished confidence in its performance. It also prevents the agency understanding where improvements can be made in its service delivery.
371. The Commonwealth Ombudsman’s Executive Schemes report emphasises that ‘[o]f particular concern are the restricted review and appeal rights that are available to people who are affected by decisions made under executive schemes’.
372. This report outlines the need to ensure comprehensive, accurate and up to date information is readily available for applicants.
373. The Department’s complaints procedure was inadequate and not accessible. Despite repeated requests by the investigation, the complaints procedure was not placed on the Business Victoria website for all to see and understand until February 2021, almost one year after the Fund opened.
374. For some time, the Ombudsman was, in effect, used by the Department to triage complaints about the Fund. The Ombudsman cannot be a substitute for an authority’s own complaint handling processes.

Opinion

375. In light of the investigation’s conclusions and pursuant to section 23(1)(g) of the Ombudsman Act, the following actions taken by the Department were wrong:

1. Refusing to reassess applications which the Department had returned for revision and placed back into ‘draft’ where the business owner did not complete the application before the Fund closed.
2. Refusing to accept JobKeeper information from business owners unless they provided it via the link in the email from the Department until 2 November 2020.
3. Refusing to reassess applications to the Fund where business owners had made minor typographical errors entering email addresses or other information.
4. Failing to communicate to business owners, personally or by notice on its website, a willingness to reassess applications that were rejected due to a lapsed ASIC registration.
5. Failing to provide call centre staff with appropriate access to sufficient information to deal meaningfully with business owners.
6. Failing to establish an effective complaint handling procedure from the outset under the Discretionary Financial Benefits Compliance Framework.

376. In light of Opinion 6, and pursuant to section 23(1)(b) of the Ombudsman Act, the following action of the Department was unjust:

7. Failing to provide business owners with sufficient reasons for its decisions.

Recommendations

The investigation notes that the Department rectified some of the issues the Ombudsman highlighted during the investigation. The Ombudsman makes the following recommendations to the Department:

Recommendation 1 – Inviting business owners to reapply

Invite business owners from the following classes to reapply to the Business Support Fund – First Round:

1. those whose applications were returned for revision and placed back into ‘draft’, who did not complete the application before the Fund closed
2. those who were assessed as ineligible for Stream One of the Fund based on their ANZSIC class, who did not apply for Stream Two and who were enrolled in JobKeeper
3. those who made typographical errors when applying which affected the outcome of their application
4. those who provided JobKeeper information but not via the link in the email from the Department.

The Department should advertise its willingness to reconsider applications from these business owners on the Business Victoria website.

The Department’s response:

The Department will invite business owners to reapply for the Fund and reassess applications that were returned for revision and placed back in ‘draft’, but did not resubmit the application before the Fund closed.

The Department will continue to reconsider applications that were assessed as ineligible for Stream One based on their ANZSIC class and did not apply under Stream Two.

If applicants were assessed as ineligible for Stream One based on the Program’s other eligibility criteria, they will remain ineligible for Stream Two on those same criteria and therefore will not be invited to have their application reassessed.

All applicants that applied for Stream One and were ineligible solely due to their ANZSIC class, will be sent an invitation to have their application reassessed under Stream Two if they can provide evidence of JobKeeper participation for their business.

Recommendation 2 – Dealing with complex business structures

Communicate with business owners whose applications were rejected because they were not registered with ASIC, inviting them to reapply if they:

1. subsequently had their ASIC registration backdated
2. applied with business entity details with which the Department could not establish ASIC registration and who can now provide evidence of registration or exemption from a requirement to be registered.

The Department should advertise its willingness to reconsider applications from these business owners on the Business Victoria website.

The Department’s response:

The Department will continue to reconsider applications that can demonstrate that their ASIC registration covers the period outlined in the program guidelines, or that the applicant is exempt from ASIC registration.

Recommendation 3 – Redesigning the framework

Work with the Department of Treasury and Finance to update its Better Grants by Design framework to include guidance on administering time critical grants.

The Department’s response:

The Department will work with the Department of Treasury and Finance to enhance guidance in this area.

Recommendation 4 – Communicating with applicants

Develop service delivery principles for grant program administration which includes:

1. timelines for acknowledging applications and communicating outcomes
2. information about how to complain
3. processes for seeking a review of the outcome.

The Department’s response:

The Department will develop Business Victoria service delivery principles and ensure relevant information (such as a timeline) is incorporated into the guidelines of future grant programs. These principles will also include details of the complaints process as outlined in Recommendation 5 below.

Standardised timelines present challenges as the grant programs delivered by Business Victoria differ substantially in their format and delivery. It is important to ensure an outcome to this recommendation that can be applied across the suite of programs.

Recommendation 5 – Complaint processes

Update the complaint handling process now published on the Business Victoria website to include detail about internal and external review avenues, including the Victorian Ombudsman.

The Department’s response:

The Department has published a complaint handling process for Business Victoria’s COVID-19 programs. This process can be found on the Business Victoria website at: https:// www.business.vic.gov.au/contact- us/complaints.

The department will review and update the process to provide additional information outlined in this recommendation, including how to seek review through the Victorian Ombudsman.

Recommendation 6 – Information management

Provide external contractors in its call centre with information that will allow them to provide detail about an application’s status and other relevant details to ensure responsive service to businesses.

The Department’s response:

Due to privacy responsibilities and the commercial in confidence nature of GEMS data, the Department determines that it is inappropriate to provide external contractors with full access to this platform.

The Department is actively reviewing options to provide external contractors (such as the service centre) with non- sensitive data on grant applicants and grant applications contained in GEMS.

Appendix 1 – Guidelines

Business Support Fund (as at 30 March 2020)

Program summary

The Victorian Government has announced a $500 million package, the Business Support Fund (the Fund), to support small businesses that employ staff and are subject to closure or highly impacted by the shutdown restrictions announced by the Victorian Government as a result of the coronavirus (COVID-19).

Small businesses are eligible if they meet all these criteria:

• Employ staff
• Have been subject to closure or is highly impacted by shutdown restrictions announced by the Victorian Government to-date. For more information on affected sectors refer to the Non-Essential Activity Directions issued by the Deputy Chief Health Officer.
• Have a turnover of more than $75,000
• Have payroll of less than $650,000

Further eligibility criteria are outlined below in these guidelines.

Businesses will be required to attest to their eligibility and provide supporting documentation (including BAS statements) through the application process. Applicants will be subject to audit by the Victorian Government or its representatives.

Eligible businesses will be provided with a grant to support them to manage in these unprecedented circumstances.

Please read these guidelines before completing the application form.

Completed application forms are to be submitted to the Department of Jobs, Precincts and Regions.

1. Eligibility criteria

1.1 Businesses are eligible to apply for a grant through the Fund provided they meet the following criteria:

• Have been subject to closure or highly impacted by shutdown restrictions announced by the Victorian Government; and
• Employ people; and
• Have a turnover of more than $75,000⁴; and
• Have a payroll of less than $650,000⁵; and
• Hold an Australian Business Number (ABN) and have held that ABN at 16 March 2020 (date of the State of Emergency declaration); and
• Have been engaged in carrying out the operation of the business in the Australian State of Victoria on 16 March 2020.

1.2 While owners of businesses that do not employ people (non-employing businesses) are not eligible for funding through this program, they can seek support through the Commonwealth Government’s Job Seeker Payment Program.

1.3 Funding will be allocated through a grant process, through which businesses are invited to apply for a grant of $10,000.

1.4 Applicants are required to submit an application online via the Business Victoria website (business.vic.gov.au). All questions in the application need to be completed to ensure timely assessment and grant payment.

1.5 Applicants are required to provide a copy of their most recent Business Activity Statement (BAS). Other supporting materials can also be provided.

1.6 If you require further information to participate in the program please refer to business.vic.gov.au or contact the Business Victoria Hotline at 13 22 15.

2. Available funding

2.1 The grant amount is $10,000 per business.

3. How the funding may be used

3.1 Grants are provided to support eligible businesses that have been impacted by the shutdown restrictions enacted by Government, due to COVID-19. Grant funds could be used for example on:

• Meeting business costs, including utilities, salaries, rent
• Seeking financial, legal or other advice to support business continuity planning
• Developing the business through marketing and communications activities
• Other supporting activities related to the operation of the business.

4. Evidence of eligibility and compliance

4.1 Applicants must certify in writing that they meet the eligibility criteria.

4.2 Applicants will be subject to audit by the Victorian Government or its representatives and will be required to produce evidence (such as payroll reports to demonstrate impact) at the request of the Victorian Government for a period of four years after the grant has been approved.

4.3 If any information in applications is found to be false or misleading, or grants are not applied for the purposes of the businesses in accordance with the terms of funding as set out in these guidelines and attached application, the grant will be repayable on demand.

5. Other information about this program

5.1 The Department of Jobs, Precincts and Regions reserves the right to amend these guidelines and application terms as required.

5.2 Further information may be found at business.vic.gov.au or through the Business Victoria Hotline at 13 22 15.

5.3 Applications will be accepted until 1 June 2020.

5.4 The Department of Jobs, Precincts and Regions will endeavour to notify all applicants on the outcome of their submitted application within five business days.

Business Support Fund – Stream Two (as at 12 May 2020)

Program summary

The Victorian Government has announced a $500 million package, the Business Support Fund (the Fund), to support small businesses that employ staff and have been highly impacted by COVID-19 restrictions.

The Business Support Fund operates through two Streams:

• Stream One targets small businesses that meet the standard eligibility criteria (refer to Section 1 below) and operate in industry sectors that have been subject to closure or highly impacted by COVID-19 shutdown restrictions announced by the Victorian Government.
• Stream Two provides support to small businesses in any other sectors that meet the standard eligibility criteria and are enrolled as eligible participants registered to receive support through the Commonwealth Government’s JobKeeper Payment scheme.

Businesses will be required to attest to their eligibility and provide supporting documentation (including a Business Activity Statement) through the application process. Applicants will be subject to audit by the Victorian Government or its representatives.

Eligible businesses will be provided with a grant to support them to manage in these unprecedented circumstances.

These guidelines provide the basis for program eligibility - please read this document before completing the application form.

Completed application forms are to be submitted to the Department of Jobs, Precincts and Regions.

1. Expanded Eligibility Criteria

1.1 To be eligible for a grant, businesses⁶ must meet the following eligibility criteria:

• Employ people; and
• Have a turnover of more than $75,000⁷; and
• Have a payroll of less than $650,000⁵; and
• Hold an Australian Business Number (ABN) and have held that ABN at 16 March 2020 (date of the State of Emergency declaration); and
• Have been engaged in carrying out the operation of the business in the Australian State of Victoria on 16 March 2020.
• Operate in an industry sector that has been subject to closure or highly impacted by shutdown restrictions announced by the Victorian Government⁸; OR
• Be enrolled as eligible participants in the Commonwealth Government’s JobKeeper Payment scheme⁹.

2. Other application information

2.1 While owners of businesses that do not employ people (non-employing businesses) are not eligible for funding through this program, they may seek support through the Commonwealth Government’s JobKeeper Payment scheme.

2.2 Funding will be allocated through a grant process, through which businesses are invited to apply for a grant of $10,000.

2.3 Applicants are required to submit an application online via the Business Victoria website (business.vic.gov.au). All questions in the application need to be completed to ensure timely assessment and grant payment.

2.4 Applicants are required to provide a copy of their most recent Business Activity Statement (BAS)⁷.

2.5 Applicants to Stream 2 will be required to supply the business’ JobKeeper Payment scheme registration number⁹.

3. Available funding

3.1 The grant amount is $10,000 per business.

3.2 A business as defined by its ABN can only receive one grant under the Fund, for either Stream 1 or Stream 2.

4. How the funding may be used

4.1 Grants are provided to support eligible businesses that have been impacted by the shutdown restrictions enacted by Government, due to COVID-19. Grant funds could be used for example on:

• Meeting business costs, including utilities, salaries, rent
• Seeking financial, legal or other advice to support business continuity planning
• Developing the business through marketing and communications activities
• Other supporting activities related to the operation of the business.

5. Evidence of eligibility and compliance

5.1 Applicants must certify that they meet the eligibility criteria.

5.2 Applicants will be subject to audit by the Victorian Government or its representatives and will be required to produce evidence (such as payroll reports to demonstrate impact) at the request of the Victorian Government for a period of four years after the grant has been approved.

5.3 If any information in the application is found to be false or misleading, or grants are not applied for the purposes of the business in accordance with the terms of funding as set out in these guidelines and attached application, the grant will be repayable on demand.

6. Other information about this program

6.1 The Department of Jobs, Precincts and Regions reserves the right to amend these guidelines and application terms as required.

6.2 Further information may be found at business.vic.gov.au or through the Business Victoria Hotline at 13 22 15.

6.3 Applications will be accepted until 1 June 2020.

6.4 The Department of Jobs, Precincts and Regions will endeavour to notify all applicants on the outcome of their submitted application within five business days.

Business Support Fund – Expansion (as at 13 July 2020)

Program Summary

On 7 July 2020, the Victorian Government announced that the 31 metropolitan Melbourne Local Government Areas (LGAs) and Mitchell Shire will return to Stage 3 ‘Stay at Home’ restrictions for a period of six weeks to help slow the spread of coronavirus (COVID-19).

From 11.59pm on Wednesday 5 August 2020, the return to Stage 3 restrictions will extend to apply throughout regional Victoria. From 6pm on 2 August 2020, metropolitan Melbourne will be subject to Stage 4 restrictions for an initial period to 13 September 2020.

Impacted employing businesses in regional Victoria will be supported during the period through access to a one-off, $5,000 grant under the Business Support Fund - Expansion. Businesses located in metropolitan Melbourne or Mitchell Shire that have been impacted by extended restrictions since early July 2020 will be eligible to receive a $10,000 grant.

1. Standard Eligibility Criteria

1.1 To be eligible for the Fund, businesses must:

• Operate a business located within Victoria; and
• Be a participant in the Commonwealth Government’s JobKeeper Payment scheme¹⁰; and
• Employ people¹¹ and be registered with WorkSafe¹² on 30 June 2020; and
• Have an annual payroll of less than $3 million in 2019-20 on an ungrouped basis¹⁴; and
• Be registered for Goods and Services Tax (GST) on 30 June 2020¹⁵; and
• Hold an Australian Business Number (ABN) and have held that ABN at 30 June 2020; and
• Be registered with the responsible Federal or State regulator¹⁶.

1.2 Owners of businesses that do not employ people (non-employing businesses) are not eligible for funding through this Fund.

2. Other application information

2.1 Funding will be allocated through a grant process, through which businesses are invited to apply for a grant.

2.2 The total grant will be $5,000 for businesses in regional Victoria, with the exception of Mitchell Shire (Stage 3 restrictions).

2.3 The total grant will be $10,000 for businesses in metropolitan Melbourne (Stage 4 restrictions) and Mitchell Shire (Stage 3 restrictions).

2.4 As part of the assessment process, evidence provided by applicants will be subject to a crosscheck with other government agencies such as the State Revenue Office and Worksafe.

2.5 Any of the following circumstances may be taken into consideration in any decision whether to award a grant:

• Any adverse findings by a regulator regarding a business;
• A business is placed under external administration;
• There is a petition to wind up or deregister a company or business; and
• The business is or becomes deregistered or unregistered (including cancellation or lapse in registration.

2.6. Applicants must ensure that their Australian Business Register (ABN) registration information is up-to-date and current as at the time of application.

2.7 Businesses that have received assistance through the initial Business Support Fund, payroll tax rebate/waiver, or other COVID-19 programs can apply for assistance under the Business Support Fund expansion.

2.8 Applicants are required to submit an application online via the Business Victoria website (business.vic.gov.au). All questions in the application need to be completed to ensure timely assessment and grant payment.

3. Available funding

3.1 The grant amount is $5,000 per business in regional Victoria, with the exception of Mitchell Shire.

3.2 Businesses in the 31 metropolitan Melbourne LGAs or Mitchell Shire will be eligible to receive a total grant amount of $10,000 to reflect the sustained period of Stage 3 and Stage 4 ‘Stay at Home’ restrictions. Businesses from metropolitan Melbourne or Mitchell Shire that have applied for or have received an initial $5,000 grant will be eligible for an additional $5,000 grant without submitting a new application.

3.3 The Program will be open for applications until 11.59 pm on 14 September 2020.

3.4 A business as defined by its ABN can only receive one grant under this Fund, with the exception of businesses that are invited to participate in the CBD Small Hospitality stream of the program as outlined in Appendix 1.

4. How the funding may be used

4.1 Grant funds may be used to assist the business, for example on:

• Meeting business costs, including utilities, salaries or rent;
• Seeking financial, legal or other advice to support business continuity planning;
• Developing the business through marketing and communications activities; or
• Any other supporting activities related to the operation of the business.

5. Evidence of eligibility and compliance

5.1 Applicants must certify that they meet the eligibility criteria.

5.2 Applicants must provide evidence of the location of their business operations through the most recent:

• Utility bill (gas, electricity, telecommunications, water); or
• Lease agreement; or
• Council Rate Notice.

5.3 Applicants must provide evidence of participation in the Commonwealth Government’s JobKeeper Payment scheme¹⁷.

5.4 Applicants are subject to a risk assessment which verifies business details provided with the Australian Securities and Investment Commission, Australian Charities and Not-for-profits Commissioner, Consumer Affairs Victoria and/or other applicable regulator.

5.5 Applicants will be subject to audit by the Victorian Government or its representatives and will be required to produce evidence (such as payroll reports to demonstrate impact) at the request of the Victorian Government for a period of four years after the grant has been approved.

5.6 If any information in the application is found to be false or misleading, or grants are not applied for the purposes of the business in accordance with the terms of funding as set out in these guidelines and attached application, the grant will be repayable on demand.

6. Other information about this Fund

6.1 The Department of Jobs, Precincts and Regions reserves the right to amend these guidelines and application terms at any time as it deems appropriate.

6.2 Further information may be found at business.vic.gov.au or through the Business Victoria Hotline at 13 22 15.

6.3 The Department of Jobs, Precincts and Regions will endeavour to notify all applicants on the outcome of their submitted application within 10 business days.

Business Support Fund – Third Round (as at 18 September 2020)

Program Summary

On 13 September 2020, the Victorian Government announced a new support package to help businesses survive the impacts of continued coronavirus (COVID-19) shutdown restrictions and to keep Victorians in jobs. This announcement includes $822 million for Business Support Fund 3, the third round of the Business Support Fund program.

Through Business Support Fund 3, around 75,000 businesses in specific industry sectors with payrolls of up to $10 million will receive grants of $10,000, $15,000 or $20,000 (with the grant amount determined by the business’ payroll size).

Business Support Fund 3 specifically targets businesses in industry sectors that have been Restricted, Heavily restricted or Closed as a result of continued restrictions outlined in Victoria’s roadmap for reopening.

1. Standard Eligibility Criteria

1.1 To be eligible for the Fund, businesses must:

• Operate a business located within Victoria¹⁸; and
• Be registered as operating in an industry sector that has an industry restriction level of Restricted, Heavily restricted or Closed and is not easing industry restriction levels between the First Step and Second Step of Victoria’s roadmap for reopening¹⁹(a business’s industry sector is defined by the industry classification (ANZSIC) linked to their ABN²⁰); and
• Be an ‘eligible participant’ in the Commonwealth Government’s JobKeeper Payment scheme²¹; and
• Be an employing business²² and be registered with WorkSafe Victoria²³; and
• Have an annual payroll of up to $10 million in 2019-20 on an ungrouped basis²⁴; and
• Be registered for Goods and Services Tax (GST) on 13 September 2020²⁵; and
• Hold an Australian Business Number (ABN) and have held that ABN at 13 September 2020; and
• Be registered with the responsible Federal or State regulator.²⁶.

2. Demonstration of eligibility

2.1 Applicants must certify that they meet the eligibility criteria and intend to remain trading at the end of restrictions.

2.2 Industry sector: To be eligible, an Applicant’s primary business activity must be in an eligible industry sector or sub sector and this must be reflected in the applicant’s Australian Business Number (ABN) registration information. Applicants should review their details at Australian Business Register website and update these details if needed prior to submitting an application. This includes ensuring that their industry classification (ANZSIC class code) linked to their ABN registration correctly captures their primary business type.

2.3 JobKeeper ID: Applicants must provide evidence of participation in the Commonwealth Government’s JobKeeper Payment scheme in the form of either a JobKeeper Business Monthly Declaration Receipt ID number orJobKeeper Enrolment Receipt ID generated from the ATO business portal.

2.4 WorkSafe Number: Applicants must demonstrate they are located in Victoria and employ people by providing their WorkCover Employer Number or WorkSafe Application Reference Number.²⁷

3. Available funding

3.1 The total grant will be: $10,000, $15,000 or $20,000 depending on the size of the business’ payroll for 2019/20:

• $10,000 if its annual payroll is less than $650,000;
• $15,000 if its annual payroll is between $650,000 and less than $3 million; or
• $20,000 if its annual payroll is between $3 million and up to $10 million.

3.2 A business as defined by its ABN can only receive one grant under Business Support Fund 3.

4. How the funding may be used

4.1 Grant funds may be used to assist the business, for example on:

• Meeting business costs, including utilities, salaries or rent;
• Seeking financial, legal or other advice to support business continuity planning;
• Developing the business through marketing and communications activities; or
• Any other supporting activities related to the operation of the business.

5. Assessment Process

5.1 Funding will be allocated through a grant process, through which businesses are invited to apply for a grant.

5.2 As part of the assessment process, evidence provided by applicants will be subject to a crosscheck with other government agencies such as the State Revenue Office and Worksafe.

5.3 Any of the following circumstances may be taken into consideration in any decision whether to award a grant:

• Any adverse findings by a regulator regarding a business;
• A business is placed under external administration;
• There is a petition to wind up or deregister a company or business; and
• The business is or becomes deregistered or unregistered (including cancellation or lapse in registration.

5.4 Businesses that have received assistance through the initial Business Support Fund, the Business Support Fund expansion, payroll tax rebate/waiver, or other coronavirus (COVID-19) programs can apply for assistance under Business Support Fund 3.

5.5 Businesses that apply for support under the Business Support Fund 3 and the Licenced Hospitality Venue Fund (LHVF) may be entitled to a grant no higher than the maximum amount for which the business is eligible under either LHVF or this Program.

5.6 Each application will be carefully considered and assessed against the eligibility criteria. If an unsuccessful applicant considers that their application has been incorrectly assessed, they will have the opportunity to lodge a complaint with Business Victoria. If after that consideration an applicant still believes their application has been incorrectly assessed, there will be an opportunity for arms-length review of their application.

6. Compliance and Audit

6.1 Applicants are subject to a risk assessment which verifies business details provided with the Australian Business Register, Australian Securities and Investment Commission, Australian Charities and Not-for-profits Commissioner, Consumer Affairs Victoria and/or other applicable regulator.

6.2 Applicants will be subject to audit by the Victorian Government or its representatives and will be required to produce evidence (such as payroll reports to demonstrate impact) at the request of the Victorian Government for a period of four years after the grant has been approved.

6.3 If any information in the application is found to be false or misleading, or grants are not applied for the purposes of the business in accordance with the terms of funding as set out in these guidelines and attached application, the grant will be repayable on demand.

7. Other information about this Fund

7.1 The Department of Jobs, Precincts and Regions reserves the right to amend these guidelines and application terms at any time as it deems appropriate.

7.2 The Department of Jobs, Precincts and Regions will endeavour to notify all applicants of the outcome of their submitted application within 5 business days.

8. Closing date and how to apply

8.1 The Program will be open for applications until the date the Business Support Fund 3 is exhausted or 11.59pm on 23 November 2020, whichever is earlier.

8.2 Applicants are required to submit an application online via the Business Victoria website (business.vic.gov.au). All questions in the application need to be completed to ensure timely assessment and grant payment.

8.3 Further information may be found at business.vic.gov.au or through the Business Victoria Hotline at 13 22 15.