Screen Australia has defended its current feature film funding round against conflict-of-interest allegations after it bankrolled the projects of a Screen Australia director and an employee charged with assessing which scripts receive cash.

In a list of funded feature films announced last week, the Commonwealth government agency shunted teenage love story Galore $720,000, alongside four other promising films including Tracks, The Babadook and Robert Connolly’s The Turning.

Galore‘s executive producer is Victoria Treole who, alongside colleague Matthew Dabner, is part of an industry committee that makes funding recommendations to Screen Australia’s CEO. The hallowed Connolly is a Screen Australia director.

A spokesperson for Screen Australia, Teri Calder, told Crikey that Tristram Miall and Joan Sauers replaced Treole and Dabner as industry specialists when it came time to assess the creative merits of Treole’s project.

Connolly’s adaptation of the best-selling Tim Winton novel received more than $1 million. Under Screen Australia guidelines, that decision required board approval because of the amount granted. Connolly declared the conflict and was excluded from his fellow directors’ deliberations.

Another Connolly project, Paper Planes, also recently received funding from Screen Australia.

Under the guidelines, feature films are assessed by a committee comprising industry specialists employed as part-time feature film consultants — usually Treole and Dabner — and Screen Australia executives. That recommendation is then passed on to CEO Ruth Harley or the Board.

Calder told Crikey that “Screen Australia … balances conflict of interest with the need to engage industry specialists. It does so with a comprehensive and transparent conflict-of-interest policy. In this fashion we have taken all the necessary and appropriate steps as conflict of interest matters and perception are very important to us.”

But Screen Producers Association of Australia CEO Geoff Brown said the conflicts of interest inside the small world of Australian film “had always been an issue”.

“From time to time practitioners from the industry will sit on the board. That should not necessarily disqualify them from funding. There are governance rules that require them not be in the room when the board is deciding or something,” he explained.

The recent funding round has also drawn criticism from industry insiders on comments threads announcing the successful projects.

Calder said Connolly “was not involved at any stage of the decision making and absented himself from any discussion or consideration of the project”.

“We have a detailed and transparent conflict-of-interest policy that we adhere to rigorously which is available publicly on our website,” she said.

Calder said 20 features were eligible for funding but the majority were withdrawn and that SA “may well see them down the track”.

Galore producer Philippa Campey ruled out the conflict-of-interest suggestion, telling Crikey that Treole joined her project in 2009 — well before her involvement with Screen Australia. “From our perspective Victoria has had nothing to do with the Screen Australia side of things,” she said.

She confirmed that the project received about  $720,000 from the body and that she would also be sourcing cash from other funding agencies such as Screen ACT.

Last year, storied British crime writer Lynda La Plante lashed out at SA’s funding rules, after her feature on the last woman hanged in Australia was viewed dimly by the “three idiots” on the production panel that included Dabner and Treole.

Screen Australia is mulling changes to the system. In an interim SPAA submission to the revised draft Production Investment Guidelines for Feature Film, obtained by Crikey, the producer peak body slams a proposal for the two-person committee to be replaced with a single feature film consultant czar.

“SPAA’s particular concern is with the external feature film consultant,” the submission reads. “First, what are the qualifications of this external assessor? A script editor is not an appropriate person — we believe it needs to be someone who understands the market and can assess a project, including script, but also including all the elements you list as relevant to the selection process.”

Brown also takes aim at the process to decide on investments of less than $1 million delegated to the CEO.

“SPAA … feels that the CEO’s [less than] $1 million delegation for production investment decisions could be used more dynamically in the above circumstances, especially where timing is a critical factor for the project.”

He says SA “should consider forms of investment other than straight equity”.

Screen Australia has annual budget of about $100 million, of which $23 million is tipped into feature films. Funding is also available through a popular producer tax offset, the threshold of which was lowered in last year’s budget from $1 million to $500,000.

Correction: a sentence in a previous version of this story incorrectly substituted Bob Connolly for Robert Connolly. The copy has been amended.