AN official audit has cast doubt over Kevin Rudd's claim to have saved Australia from recession by building school halls, revealing the majority of his $16.2 billion schools stimulus budget has not yet been spent.
The Australian National Audit Office has found 83 per cent of projects under Building the Education Revolution program are behind schedule.
And although it says there are "early indications" the scheme is achieving its stated aims, it has been unable to verify the Prime Minister's claims it has created tens of thousands of jobs.
The report notes that the "overwhelming majority" of BER projects had not yet been funded, concluding that "the effect of program spending on an economy-wide basis is unclear at this time".
Auditor-General Ian McPhee's report, released yesterday, sparked opposition claims that Deputy Prime Minister Julia Gillard misled parliament last year when justifying a $1.7bn blowout in the cost of the program.
Ms Gillard told parliament last September the blowout had been caused by more schools wanting to participate in the BER than expected.
But Mr McPhee said this was wrong, and revealed the government consciously underfunded the BER program when setting it up eight months earlier.
As Ms Gillard looked to the positives of the audit report yesterday, Tony Abbott demanded a judicial inquiry and rounded on Mr Rudd.
The Opposition Leader said the report highlighted Mr Rudd's habit of making inflated claims that could not be sustained by the facts.
"This is a person who is not fair dinkum with the Australian public," Mr Abbott said. "Plainly, this is a disastrous waste of taxpayers' money and it's why we really do need a judicial inquiry."
The government created the BER last year, promising to build new school halls, libraries and multi-purpose buildings in every primary school in the nation to stimulate economic activity.
The Primary Schools for the 21st Century component of the program, initially costed at $12.4bn, was the big-ticket item in a $42bn economic stimulus package created to protect Australia from the fallout of the global financial crisis.
In the months since, The Australian has revealed widespread complaints from schools about inflexibility under BER as well as price-gouging by contractors receiving secret fees to manage the program for state governments.
The government has always defended the scheme on the basis that it has generated economic activity and provided jobs for tradespeople who would otherwise have ended up ot the dole queues.
In an interview with The Australian in March, Ms Gillard said the program would come to be seen as a textbook response to the threat of recession.
The audit report examined the administrative arrangements for the BER but was unable to examine value for money in individual projects because they are being rolled out by state governments and non-government sector authorities, not the commonwealth.
Although Ms Gillard has continued to defend the BER throughout its existence, she last month appointed former investment banker Brad Orgill to lead an investigation into cost blowouts and value for money.
Mr McPhee's report confirms community frustration over red tape, inflexibility and the one-size-fits-all approach taken by the government, which has required schools to build the projects according to rigid templates.
In contrast to Ms Gillard's frequent assurances that BER is on target, the report confirms most projects are lagging.
"Of the 10,700 approved BER . . . projects, 1995 projects (18.6 per cent) met the construction commencement milestones originally agreed by governments for each funding round," the report says.
Only a little over $2bn of the $14.1bn primary school funding had been spent by last December while the government's original forecasts envisaged more than twice that amount would have been spent by now.
The auditors could also not find any reliable information to assess the level of job creation under the BER - evidence that would cut to the heart of the government's justification of the spending.
The auditors also revealed that the government's Strategic Priorities and Budget Committee, which included Ms Gillard, allocated only 90 per cent of the funding that would have been needed if all schools applied for the maximum amount of funding available.
"Ministers advised that they had never intended to hold expenditure to an average 90 per cent of maximum amounts available to each school and that they had envisaged that a budget estimates variation may be required to provide more funding, depending on the response of schools," the auditors said.
When discussing the $1.7bn cost blowout in parliament last September, Ms Gillard said: "More money is going into this program because it is going gangbusters, because more schools want to be in this program."
Mr McPhee's report said the blowout was caused by schools seeking the maximum amount of funding available to them under the guidelines.
"It did not flow from any deficiencies identified in delivering the program, nor was it the result of more schools seeking to participate than had originally been forecast," the report said.
Last night, Ms Gillard said SPBC ministers understood that, depending on the response from schools, more funding may be necessary and that the take-up could not have been predicted with 100 per cent accuracy. She said the report said 78 per cent of projects met their commencement timetable.
"In construction there will always be delays including reasons like retendering of some projects, weather, heritage issues and a desire to schedule outside of busy periods for schools like exams," she said.
