Racing NSW yet to complete ‘significantly delayed’ Covid-era stimulus projects

Almost four years after Racing NSW was awarded tens of millions of dollars in taxpayer funds to upgrade a series of regional racetracks with little oversight, many of the projects have been “significantly delayed” or have yet to begin, prompting calls for the powerful thoroughbred regulator to open its books for inspection by government auditors.

A damning report from the NSW auditor-general into a grant program established under the former Coalition government known as Racing for the Regions had been beset by administrative failures by the Office of Racing, including a lack of clear project timelines and oversight.

The grant scheme, which was meant to provide economic stimulus during the COVID-19 pandemic, had in 2021 awarded Racing NSW $58 million to complete 14 upgrades at nine regional racecourses including Gosford, Scone and Cessnock.

The grant funding, which was executed in the middle of 2022, was handed directly to Racing NSW, headed by influential chief executive Peter V’landys, which provided co-funding for the projects.

But almost four years later, the auditor-general found the program had been “significantly delayed”. Only six of the 14 projects have been completed and four are yet to begin. The report was highly critical of the grant administrator, the Office of Racing, which had been unaware of the program until after the funding for Racing NSW was announced. The department had signed a funding deed with Racing NSW before it had completed detailed project works, it found, and had failed to adequately administer the program.

In one example, the auditor-general noted the department had “not kept complete records” and had documented less than half of the governance meetings it held with Racing NSW between February 2024 and October last year.

The average difference between the estimated completion dates for projects in the original business case and the current timeline was more than three years, it found. The Herald also understands the scope of some projects has been reduced.

The Department of Creative Industries, Tourism, Hospitality and Sport – which oversees the Office of Racing – would not provide information about the original scope of the projects put forward for funding, instead referring questions to Racing NSW, which also did not provide that information.

But earlier this week Racing Minister David Harris attended the opening of the first of what the government says will be five new stables at Scone racecourse, housing 520 horses. In 2021, V’landys told the ABC that Racing NSW would build stables to house 600 horses.

Saranne Cooke, the chairman of Racing NSW, said the auditor-general had noted that the delays “were not the fault of Racing NSW”.

“In fact, the report confirms that Racing NSW’s best practice decision to use a third-party project manager to oversee the projects has ensured robust probity and procurement processes,” she said.

Cooke said that “insofar as there has been any delays” to the projects, they were caused by “extensive delays” in development application approvals, “an issue that has plagued the entire construction sector in NSW”.

The report raises questions both about the oversight of the Racing for Regions grants program, and also the adequacy of financial oversight of Racing NSW, which is unlike most other statutory bodies in NSW because its finances are not subject to government auditing.

It also comes at a critical juncture for Racing NSW – and the Minns government’s handling of the powerful body. Former NSW Health Minister Brad Hazzard has been tasked with conducting a review of the thoroughbred racing legislation under which Racing NSW is constituted, and his report is expected to be released before the end of this year.

Tony Harris, a former NSW auditor-general, first raised the issue of Racing NSW’s exemption from examination by the government auditor in a submission to the fiery parliamentary inquiry into the now-abandoned sale of Rosehill Racecourse last year.

At the time, racing minister David Harris said he did not agree with that suggestion because Racing NSW had to make “commercial decisions” and that the auditor-general would “constrain their ability to be able to operate in that competitive world”.

A spokesman for the minister told the Herald that Racing NSW’s auditing arrangements “are a matter for them”, and that the department’s “reporting, payment and assurance processes and controls” had been strengthened.

But the auditor-general has since used the Audit Office’s follow-the-money powers to examine the grants program, something Tony Harris said showed the need for greater financial transparency.

“It is a seriously large government entity with very significant powers and funding, and the auditor-general is prohibited by law from unilaterally auditing it and I don’t know why,” he said.

But Cooke took aim at Tony Harris, claiming he had been “commissioned by agitators against Racing NSW” and calling him “naive and uninformed” because the regulator was an independent body.

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