AN auditor-general's report has found room for improvement in government funding programs for regional roads.
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The audit examined how effective the Regional Roads Block Grant and Repair and Improvement of Regional Roads (REPAIR) programs were in terms of value for money.
According to the report, Roads and Maritime Services (RMS) provided more than $170 million to local councils through the Block Grant and REPAIR programs to spend on regional roads, which are the link between state and local roads.
"RMS cannot show that the money it provides to local councils for Regional Roads is spent well and goes to where it achieves most benefit," Auditor-General Grant Hehir said.
"I cannot determine independently how well councils use RMS contributions as my mandate does not allow me to follow-the-money into local government and examine their processes and data."
The report found the Block Grant program was administratively simple but allocation and accountability needed to improve.
"Grant allocations do not take into account the disproportionate damage caused to roads by heavy vehicles and are based on traffic data that contains anomalies and is sometimes well over 10 years old," Mr Hehir said.
The report recommended the RMS should continue working with councils to improve the quality of data used for allocating Block Grants and they should require councils to certify they spend Block Grants in line with priorities set in their strategic and operational plans.
The REPAIR program, which provided funds to help councils undertake larger rehabilitation and development works on regional roads, was well designed but needed better implementation in regions, according to the report.
It showed RMS provided $29 million to councils in 2013-14 - contributing half of the estimated cost of these works.
"The REPAIR program is well designed, merit-based and focuses on minimising whole-of-life costs and providing positive net economic benefits," Mr Hehir said.
"However, the six RMS regions need to improve how they are implementing aspects of the program."
Two RMS regions did not select projects from a regional perspective and the way regions assessed the merit of projects varied widely, with most not adequately accounting for whole-of-life costs and economic development, the report found.
It recommended RMS should ensure that all projects were selected on a merit basis from a regional perspective and that adequate weight was given to whole-of-life costs and economic benefits.
Issues identified in this audit were already being addressed by RMS and they had agreed to address other key findings in the report, the Auditor-General said.