The Commonwealth has responded to a scathing bushfire grants audit in NSW.

A recent audit found the NSW government administration of bushfire recovery grants lacked integrity, transparency and consistency in its assessment processes, and also had insufficient guidelines.

The audit found NSW Labor seats had been denied bushfire grants due to a limit set by former deputy premier John Barilaro’s office.

Thresholds set by Mr Barilaro’s office effectively excluded Labor electorates from the urgent bushfire recovery funding, the audit found. 

Although there was no designated role for Mr Barilaro in handing out the grants, his office implemented a $1 million threshold for bushfire recovery projects, denying funding for anything less than that amount.

The federal government put up $350 million of the $700 million grant pool through its disaster recovery funding arrangements.

A subsequent senate estimates session has been told that the federal government’s responsibility in the matter was to establish the funding framework.

“The Commonwealth did not have a role in the processes used within the states and territories. So, the state and territory governments had responsibility for identifying the projects, running the processes in accordance with their legislation and regulation,” National Emergency Management Agency (NEMA) deputy coordinator general Rina Bruinsma said.

The Commonwealth would only have seen specific details of the application process after NSW decided to raise the project threshold to $1 million.

“I know that there was disappointment expressed from some communities who did not receive funding in that first round,” the deputy coordinator general added.

NEMA coordinator-general Brendan Moon said the agency is now focused on four key priorities for the next few months.

“We’re increasing investment in disaster risk reduction through the $1 billion Disaster Relief Fund,” Mr Moon said.

“We’re identifying and understanding our vulnerabilities by forging partnerships with insurance companies, which alone have seen more than $15 billion in claims since the Black Summer bushfires.

“We’re expanding the capabilities of our emergency management workforce by exploring and investing in alternative workforce models.

“We’re fine-tuning our funding stream so that our payments, grants and programs are equitable, responsive and deliver value for money to the taxpayer.”