Audit condemns administration of Racing for the Regions program as key projects remain incomplete 

The NSW Auditor‑General has called for urgent intervention to fix the Racing for the Regions program, warning the government department responsible had failed to administer the program effectively and must “actively monitor delivery of the remaining projects” being overseen by the state’s thoroughbred regulator Racing NSW.

The audit also reveals that the $58.6 million program is running years behind schedule and facing major cost blowouts, with the total budget for government‑funded projects rising by about $53 million, leaving Racing NSW to pick up the tab for the massive financial shortfall.

The audit was particularly damning of the actions of the Department of Creative Industries, Tourism, Hospitality and Sport, under which the Office Of Racing sits.

Its key findings were that the Department did not assess delivery risks of the program, that the program’s funding deed did not include critical information and did not include requirements for evaluation of the projects’ benefits.

It also said that the Department did not actively oversee the program or document decisions to change project timeframes.

Auditor-General Bola Oyetunji’s Administration of grants to non-public sector entities: Racing for the Regions program report also found that:

• Six of the 14 projects have been completed (up to January this year)
• Four were in construction phase and four were yet to start construction
• Three projects were completed before the official commencement of the funding deed in July 2022 
• The average delay between Racing NSW’s estimated project start dates and actual commencement was 17 months;
• Completed projects ran an average of 38 months behind the timelines set out in the 2020 business case;
• The audit also highlighted administrative failures, including missing records for a $142,000 payment and two early payments that did not meet the deed’s requirement for quantity surveyor certification; and,
• Regular meetings and reports on the program between Racing NSW and the department only started in February 2024. 

The report’s release comes in the same week as the new $4 million Polytrack at Scone was officially opened by NSW Racing Minister David Harris, with Racing NSW chair Dr Saranne Cooke and board member George Souris. That was funded by the Racing For the Regions program.

In a social media post, the Minister described the Scone stable facilities, which are yet to be completed, as ’impressive’ and the work being done at Muswellbrook as ‘remarkable’.

The major beneficiary of the grants, Scone Race Club was used as the venue for the then Liberal government’s launch of the $58.64 million Racing for the Regions initiative in June 2021.

More than a third of the allocated government funding had been directed to Scone, with $16 million set aside for new stabling and $4 million for the just-opened Polytrack.

The double-storey stable complex built at Scone Race Club has 113 boxes now occupied with four more single-storey stable complexes reportedly to be built by the end of the year, taking additional on-course capacity to 302.

Read the full auditor general’s report

Sources spoken to by The Straight suggest the completion timeline of the end of this year is optimistic.

Among the projects yet to be completed, according to the report, are the construction of stables at Tamworth, Cessnock, Albury, Hawkesbury and Gosford.

In documentation seen by The Straight, tenders for the construction of stables at Gosford were called for on March 23 this year. Their construction is expected to cost an estimated $10 to $15 million, the tender documents indicated. The funding approved for the project is $8.4 million.

The Auditor-General’s report, which was released on Thursday, made three key recommendations.

It called on the Department to “focus on ensuring and fully documenting oversight of any changes to delivery method, timelines or project scope”.

The Auditor-General also requested that Racing NSW evaluate and report to the department on the achievement of benefits outlined in the original October 2020 business case, consistent with the grants administration guidelines that were in place at the time the program commenced.

He also called on the department to ensure those recommendations were adhered to by June this year.

The report also recommended that the department specifically develop “a documented risk‑based grants administration and assurance plan for each program, consistent with the NSW Grants Administration Guide”.

In response to the Auditor-General’s findings, Racing NSW’s Dr Cooke wrote in an April 2-dated letter that many of the projects were substantially delayed due to development approval (DA) processes, some of which took longer than 12 months to be granted.

“This is a well-documented and widespread issue across the construction sector, not contained to just the Racing for the Regions projects,” Dr Cooke wrote.

In some cases, the racing regulator also had to purchase additional land to enable the projects to be completed, with those acquisitions made through Racing NSW’s cash reserves rather than via grant funds, Dr Cooke confirmed.

The DCITHS’s secretary Melanie Hawyes accepted the recommendations made by the Auditor-General.

Racing NSW also acknowledged the recommendations and “confirms its commitment to working collaboratively with the Department to support their effective implementation”.

“In that respect, meetings have already been conducted with the Department to discuss the implementation of the recommendations,” Dr Cooke wrote.

The Racing for the Regions program, developed by Racing NSW to upgrade racecourse infrastructure outside the Greater Sydney region, was launched during the height of the pandemic, the Auditor-General’s report said.

The business case outlined 21 projects valued at $126 million, with the government electing to support 14 of them through the program. 

The funded works include new or upgraded tracks, stables and grandstands, all originally slated for completion by September 2024.

Helen Sinclair, a former General Manager at both Scone and Muswellbrook Race Clubs and now a member of the Racing Reform Group, said the delays to the projects in the program were no shock to those in the industry. 

“The fact that five years on from the funding announcement and only six of the 14 projects have been completed isn’t a surprise to anyone in racing,” she said.

She questioned accountability at the state’s racing regulator, Racing NSW, and the timelines for the completion of the outstanding projects.   

“Many of the projects in this program have also had to be downgraded in scope due to the delays and increasing costs,” she said.

“Everyone I’m speaking to in the industry is hoping the review of the Thoroughbred Act by Brad Hazzard will deliver significant reforms that will enhance governance and accountability, though like many, I believe the government should expand the terms of reference of that review to include racing’s funding mechanism and government oversight of Racing NSW.”

Under the NSW system, the Auditor-General has no direct oversight over Racing NSW, only over how specific government funding is allocated and spent.