Chapter One - Overview > Year in Review > Special Feature: Operation Sumatra Assist
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Financial Management Reform | Special Feature

Defence's Financial

Defence's Financial Controls Framework cover.

During the year, a significant step was taken towards transforming Defence's financial management capabilities. The Defence Financial Controls Framework Project was established to draw together in a structured and integrated fashion all of the components necessary to build a best practice financial management environment. The Secretary and the Chief of the Defence Force officially launched the project on 29 June 2005 as Defence's Financial Flagship. The Auditor-General was a welcome guest at the launch.

The Project (Remediation Plan G1(1)) is the cornerstone of the remediation strategies reported in some detail on the following pages. But it is more than just another remediation project. It is a change management program that will standardise and document the way Defence financial business is undertaken so that staff understand what to do, how to do it and how their activities contribute to the overall financial management of Defence.

It will be more comprehensive than any change in the finance domain over recent years and stands apart as the key enabler to implement the Secretary's vision of 'Defence being recognised by Government as highly competent, professional and business-like financial managers within the next five years'.

The five-year time frame is appropriate given the fundamental nature of the changes to be put in place. The adoption of a comprehensive financial framework for Defence will require significant cultural and behavioural change for all staff working in the finance domain and for Defence people more widely. Such fundamental change in an organisation as large as Defence will take at least five years to achieve.

At its core, the framework will be a simple and intuitive knowledge base that provides all Defence personnel with access to a comprehensive and integrated source of the financial policies, processes and procedures to manage its business. Documenting and standardising key financial business processes across the portfolio will improve the integrity of financial data and reported information, improve the efficiency of resource management and reduce training costs associated with staff turnover.

The comprehensive Financial Controls Framework is essential, but insufficient by itself, to achieve the Secretary's vision. Having competent staff to transact and manage within the framework is also essential. Business skilling across the finance domain will be re-engineered as part of the framework and a Financial Certification Framework will be established to ensure staff competency requirements are clearly identified and achieved by staff working within the finance domain.

  1. See Progress of Financial Statements Remediation Plans
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