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Chapter 6 - Assurance


Parliamentary business

In 2015–16, Defence provided 11 written submissions to various Senate, House of Representatives and joint committee inquiries. Defence witnesses appeared at 36 hearings and provided evidence on a range of issues. Defence took a total of 536 questions on notice from Senate estimates, House of Representatives/Senate notice papers, and parliamentary committees, and tabled and/or contributed to 12 government responses to parliamentary committee reports throughout the year (Table 6.1).

To assist parliamentary committee members to gain a better understanding of Defence issues, Defence also provided private briefings on a range of subjects, including matters related to the 2016 Defence White Paper, national security and capability.

Table 6.1: Defence’s parliamentary contribution, 2013–14 to 2015–16

Parliamentary contribution

2013–14

2014–15

2015–16

Written submissions

8

10

11

Whole-of-government submissions

1

Government responses

8

7

12

Public hearings

12

25

36

Private briefings

25

12

14

Total

54

54

73

Parliamentary committees

Joint committees

Table 6.2 provides information on Defence’s activities in relation to its involvement in joint committees from 1 July 2015 to 30 June 2016.

Table 6.2: Defence’s involvement with joint committees, 2015–16

Joint Standing Committee on Foreign Affairs, Defence and Trade

Review of the Defence Annual Report 201213

Inquiry into principles and practice—Australian defence industry and exports

Inquiry into the Defence Annual Report 201314

Inquiry into the Defence Annual Report 201415

Empowering women and girls

Inquiry into the Defence Trade Controls Amendment Bill 2015

Joint Committee of Public Accounts and Audit

Report 456: Defence Major Equipment Procurement and Evaluation

Report 458: Defence Major Projects Report (2014–15)

Report 448: Review of the 2013–14 Defence Materiel Organisation Major Projects Report

Report 449: Military Equipment Disposal

Inquiry into the ANAO Report No. 9 2015–16—Test and evaluation of major Defence equipment acquisitions, and No. 52 2014–15—Australian Defence Force’s medium and heavy vehicle fleet replacement (Land 121 Phase 3B)

Review of the ANAO Report No. 16 2015–16—2014–15 Major Projects Report

Parliamentary Joint Committee on Intelligence and Security

Review of Administration and Expenditure No. 13 (2013–2014)

Review of Administration and Expenditure No. 14 (2014–2015)

Parliamentary Standing Committee on Public Works

RAAF Base Williamtown Redevelopment Stage 2

AIR 8000 Phase 2—Battlefield Airlifter Facilities

AIR 5349 Phase 3—Growler Airborne Electronic Attack Capability Facilities

C-17 Maintenance Facility, Aircraft Apron and Associated Infrastructure Project, RAAF Amberley, Queensland

Delamere Air Weapons Range Redevelopment Project, Northern Territory

Puckapunyal Military Area High-Voltage Power Supply Upgrade, Puckapunyal, Victoria

Campbell Barracks Redevelopment Project, Swanbourne, Western Australia

HMAS Stirling Redevelopment, Stage 3A, Garden Island, Western Australia

JP 2097 REDFIN Phase 1B Enhancements to Special Operations Capability Facilities Project

Air Traffic Control Complex Infrastructure Project and AIR5431 Phases 2 and 3 Fixed-Base Defence Air Traffic Management and Control System

LAND 121 Phases 3 and 4 Stage 2—Unit Sustainment Facilities Project

AIR 5428 Phase 1—Pilot Training Facilities Project

Senate committees

Table 6.3 provides information on Defence’s activities in relation to its involvement in Senate committees from 1 July 2015 to 30 June 2016.

Table 6.3: Defence’s involvement with Senate committees, 2015–16

Senate Standing Committees on Foreign Affairs, Defence and Trade

Defence Legislation Amendment (Military Justice Enhancements—Inspector-General of the Australian Defence Force) Bill 2014

Inquiry into the contamination of Australian Defence Force facilities and other Commonwealth, state and territory sites in Australia—Part A

Inquiry into the contamination of Australian Defence Force facilities and other Commonwealth, state and territory sites in Australia—Part B

Inquiry into the capability of Defence's physical science and engineering workforce

Inquiry into mental health of Australian Defence Force serving personnel

Inquiry into the potential use by the Australian Defence Force of unmanned air, maritime and land platforms

Inquiry into the Australian Defence Force's resistance-to-interrogation training

Inquiry into the operations of Defence Housing Australia

Inquiry into the planned acquisition of the F-35 Lightning II (Joint Strike Fighter)

Australia's future activities and responsibilities in the Southern Ocean and Antarctic waters

Report on the implementation of the Defence Trade Controls Act 2012—Progress Report No. 2 and No. 3

Senate Standing Committee on Legal and Constitutional Affairs

Inquiry into the payment of cash or other inducements by the Commonwealth of Australia in exchange for the turn back of asylum seeker boats

Senate Economics References Committee

Inquiry into foreign investment review framework

Inquiry into the future sustainability of Australia’s shipbuilding industry

House of Representatives committees

Table 6.4 provides information on Defence’s activities in relation to its involvement in House of Representatives committees from 1 July 2015 to 30 June 2016.

Table 6.4: Defence’s involvement with House of Representatives committees, 2015–16

Standing Committee on Infrastructure and Communications

Inquiry into the role of smart ICT in the design and planning of Infrastructure

Senate estimates and questions on notice

Defence attended five estimates hearings before the Senate Standing Committees on Foreign Affairs, Defence and Trade in October 2015, February/March 2016 (including two additional spillover hearings) and in May 2016. A total of 314 questions were taken on notice, 38 of which lapsed.

In 2015–16, Defence was asked a total of 142 questions in the Senate and House of Representatives, 14 of which lapsed. For Parliamentary Inquiries, Defence was asked a total of 80 questions during the 2015–16 period, 10 of which lapsed.

Table 6.5 provides information on Defence’s activities in relation to the Senate estimates process from 1 July 2015 to 30 June 2016. Table 6.6 presents a breakdown of the parliamentary questions on notice.

Table 6.5: Defence’s involvement with Senate Estimates, 2015–16

Senate Standing Committees on Foreign Affairs, Defence and Trade—estimates

Supplementary Budget Estimates 2015–16

Defence witnesses appeared at a hearing on 21 October 2015. A total of 102 questions, consisting of 299 parts, were taken on notice during the hearing.

Additional Estimates 2015–16

Defence witnesses appeared at a hearing on 10 February 2016, with two additional spillover hearings held on 3 and 17 March 2016. A total of 208 questions, consisting of 822 parts, were

taken on notice across the three hearings. Of the 208 questions, a total of 174 were lodged with the committee. The remaining 34 questions lapsed when the proclamation for the dissolution of Parliament was issued on 8 May 2016.

Budget Estimates 2016–17

Defence witnesses appeared at a hearing on 6 May 2016. A total of four questions, consisting of four parts, were taken on notice from the hearing. All questions lapsed when the proclamation for the dissolution of Parliament was issued on 8 May 2016.

Table 6.6: Defence’s questions on notice, 2013–14 to 2015–16

Source of questions on notice

2013–14

2014–15

2015–16

House of Representatives/Senate notice paper

18

134

142

Senate estimates (October, February–March and May–June)

450

359

314

Parliamentary inquiries

35

134

80

Total

503

627

536

Judicial decisions and decision of administrative tribunals

In Gaynor v Chief of Defence Force (No. 3) [2015] FCA 1370, his Honour Justice Buchanan found in favour of the applicant, and ordered the decision of the Chief of the Defence Force made on 10 December 2013 terminating the applicant’s service in the Army to be set aside. The termination decision was found to be constitutionally invalid on the basis that it breached the implied freedom of political communication. The Chief of the Defence Force has appealed the decision to the Full Court of the Federal Court and the appeal was heard on 5 and 6 May 2016. The appeal is legally significant as it seeks to clarify the present state of the law on the constitutional guarantee of freedom of political communication.

In 2015–16, Defence was a respondent in six applications to the Administrative Appeals Tribunal. The applicants sought review of decisions by Defence regarding their claims for compensation under Regulation 57 of the Defence Force Regulations 1952 in relation to Defence activities at the Salt Ash Air Weapons Range. The applicants were the lead group of 102 claimants whose claims for compensation under Regulation 57 were not accepted by Defence. On 15 April 2016, her Honour Justice Stevenson upheld the decision under review and affirmed the decision of the reviewing authority, Air Commodore Ian Meyn, dated 27 November 2013, to refuse compensation to the applicants.

In Jordan v Chief of Air Force [2015] ADFDAT 2, a Defence member successfully appealed against his conviction following a trial before a Defence Force magistrate under the Defence Force Discipline Act 1982. The central issue on appeal was the proper construction of the Criminal Code Act 1995 provision creating the offence for which he was charged (obtaining a financial advantage from the Commonwealth in relation to receipt of a rental allowance). The Defence Force Discipline Appeal Tribunal decided that the provision requires a coincidence between the relevant physical and fault elements of the offence, such that a person must have the requisite knowledge or belief of wrongdoing at the time when the person engages in the offending conduct.

Commonwealth Ombudsman reports

There were no reports by either the Commonwealth or Defence Force Ombudsman pursuant to section 15, 16, 17 or 19 of the Ombudsman Act 1976 during the reporting period.

Auditor-General’s reports

In 2015–16, six performance audit reports by the Auditor-General relating directly to Defence were tabled in Parliament, as outlined in Table 6.7.

Table 6.7: Auditor-General’s reports on Defence, 2015–16

Report

Date presented to Parliament

Audit objective

ANAO Report No. 9 2015–16—Test and evaluation of major Defence equipment acquisitions

24 November 2015

To examine the effectiveness of Defence’s management of the test and evaluation aspects of its major capital equipment acquisition program; and to report on Defence’s progress in implementing test and evaluation recommendations made in the Senate Foreign Affairs, Defence and Trade References Committee’s August 2012 report, Procurement procedures for Defence capital projects

ANAO Report No. 19 2015–16—Managing science and technology work for Defence—Defence Science and Technology Group

2 February 2016

To assess the effectiveness of the Defence Science and Technology Group’s administration of the science and technology work that it undertakes

ANAO Report No. 20 2015–16—Defence industry support and skill development programs

2 February 2016

To assess the effectiveness of Defence’s administration of industry support and skill development

ANAO Report No. 26 2015–16—Defence’s management of the Mulwala propellant facility

15 March 2016

To assess the effectiveness of Defence’s management of the Mulwala redevelopment project

ANAO Report No. 32 2015–16—Administration of rehabilitation services under the Military Rehabilitation and Compensation Act 2004

5 May 2016

To assess the effectiveness of administration by the Department of Veterans’ Affairs and the Department of Defence of rehabilitation services under the Military Rehabilitation and Compensation Act 2004

ANAO Report No. 33 2015–16—Defence’s management of credit and other transaction cards

5 May 2016

To assess whether Defence is effectively controlling the use of Commonwealth credit cards for official purposes in accordance with legislative and policy requirements

In 2015–16, two cross-portfolio audit reports involving Defence were also tabled in Parliament (Table 6.8).

Table 6.8: Auditor-General’s cross-portfolio reports involving Defence, 2015–16

Report

Date presented to Parliament

Audit objective

ANAO Report No. 1 2015–16—Procurement initiatives to support outcomes for Indigenous Australians

8 July 2015

To assess the effectiveness of the administration of procurement initiatives to support opportunities for Indigenous Australians

ANAO Report No. 5 2015–16—Implementation of audit recommendations

22 October 2015

To assess the effectiveness of the Department of Veterans’ Affairs monitoring and implementation of Australian National Audit Office and internal performance audit recommendations

Performance reviews

Australian Government Security Vetting Agency review

In June 2015, the Australian National Audit Office (ANAO) provided Parliament with an independent performance audit of the Australian Government Security Vetting Agency (AGSVA) (ANAO Report No. 45 2014–15—Central administration of security vetting). It examined whether AGSVA was providing an efficient and effective security vetting service for Australian Government agencies. The audit reviewed AGSVA’s guidelines, procedures and systems, and made three recommendations to improve security vetting, all of which were accepted and implemented by AGSVA.

Recommendation 1—To provide additional assurance that AGSVA’s Industry Vetting Panel (lVP) contractors are operating in accordance with applicable security policies and procedures, the ANAO recommends that Defence implement a targeted audit program to assess IVP contractors’ operations.

AGSVA commenced auditing its external Industry Vetting Panel service providers, with six service providers audited in February and March 2016. The remaining service providers will be audited in 2016–17. The purpose of these audits is to provide assurance that Industry Vetting Panel service providers have appropriate systems and processes in place to consistently deliver quality vetting products and services. The first round of audits found that Industry Vetting Panel service providers are meeting AGSVA’s requirements.

Recommendation 2—To strengthen quality control over vetting decisions and promote consistent decision making, the ANAO recommends that Defence introduce a program of internal peer review supplemented by periodic independent external quality assurance of delegate decisions.

AGSVA implemented an internal peer review program where authorised vetting agencies will review AGSVA’s vetting decisions. This recommendation is now closed.

Recommendation 3—To improve efficiency and maintain the integrity of security vetting, the ANAO recommends that Defence develop a clear pathway to achieve agreed timeframes for processing and revalidating security clearances.

This recommendation is now closed, as AGSVA undertook a comprehensive review of its end-to-end vetting process and established a remediation program. The program aims to improve vetting efficiency by reforming AGSVA’s policies and processes.

AGSVA has:

  • implemented the ANAO’s recommendations to reform AGSVA’s business process and achieve efficiencies
  • contributed to the Personnel Security Strategic Reforms Taskforce led by the Attorney-General’s Department
  • developed a resourcing and forecast model so that it can better anticipate demand
  • developed new key performance indicators.

Defence capability reviews

While no formal capability reviews of Defence by the Australian Public Service Commission were conducted during 2015–16, the Government’s First Principles Review of Defence was released on 1 April 2015.

Defence has made sound progress in implementing the recommendations of the First Principles Review of Defence during 2015–16, with 36 of the 75 recommendations completed by 30 June 2016.

Implementation of the First Principles Review recommendations has been divided into five work streams. Highlights during 2015–16 include:

1. Behaviours (improving accountability)

  • The ministerial directive has been updated and clearly describes the individual and joint accountabilities of the Secretary and the Chief of the Defence Force.
  • The Defence Legislation Amendment (First Principles) Act 2015 came into effect on 1 July 2016 and formally recognises the authority of the Chief of the Defence Force and the Vice Chief of the Defence Force.
  • The role of Service Chiefs as capability managers was strengthened, clarifying their responsibility for identifying, developing and delivering Defence’s capability needs.
  • Role charters for all members of the Senior Leadership Group were established, setting out individual and shared accountability, decision rights and agreed leadership behaviours.
  • Senior Executive Service performance assessments are re-weighted towards agreed leadership behaviours.

2. Strategic centre (improving the quality of advice, direction setting and decision-making)

  • Defence Committee remains the primary decision-making body in Defence, with its membership reduced from 17 to six. It has two subsidiary committees:
    • the Enterprise Business Committee is chaired by the Associate Secretary and monitors the in-year performance of Defence in meeting Government-directed outcomes
    • the Investment Committee is chaired by the Vice Chief of the Defence Force and manages future investments; it is responsible for maintaining the integrity of the Integrated Investment Program.
  • The number of committees chaired by SES Band 3 or three-star officers has been reduced from 72 to 46.
  • The Enterprise Performance Management Framework was endorsed by the Defence Committee. It outlines how Government requirements are translated to the corporate planning and budget allocation framework, cascaded through to Group and Service business plans, and monitored through triannual performance reporting.
  • The Defence Science and Technology Group has a new framework for university and industry partnerships. It allows Defence to partner with industry and academia to better access and leverage external science and technology capabilities.
  • The Strategic Policy and Intelligence Group was established in February 2016. It brings together strategic, international and industry policy, the Defence intelligence agencies and the new Contestability Division.

3. Capability lifecycle (delivering on Government decisions)

  • The Defence Materiel Organisation was disbanded and the Capability Acquisition and Sustainment Group was established as a part of Defence on 1 July 2015.
  • Defence commenced transition to the new capability lifecycle in April 2016. The capability lifecycle is the end-to-end process for planning, developing, acquiring and maintaining Defence capability—major capital, infrastructure, and information and communications technology.
  • The Capability Development Group was disbanded on 1 April 2016 and its functions moved to other parts of Defence. The Investment Committee now takes responsibility for all Defence investment decisions, including estate and infrastructure, information and communications technology, and major capability acquisitions.

4a. Enablers—services (improving delivery of services)

  • Defence’s corporate enabling functions are now focused on improving the service they provide to customers. Each function has developed a formal program of continuous improvement and the results of a six-monthly customer satisfaction survey are being used to focus improvement initiatives.
  • Key performance indicators for service delivery were also created and performance reporting is provided on a quarterly basis.
  • Further work to establish the integrated service delivery model will be undertaken in 2016–17. The model is designed to improve how customers access services and places the customer’s experience at the forefront of service delivery improvements.

4b. Enablers—information management (new enterprise approach)

  • The Enterprise Information Management Strategy 2015–2025 was released in October 2015 and outlines how information will be managed in Defence, with clearly defined authorities and accountabilities for the Chief Information Officer, the Chief Technology Officer and the Vice Chief of the Defence Force as the design authority for military interoperability.
  • A detailed and comprehensive implementation plan was also developed and identifies a credible path over the next five years to deliver on the agreed Enterprise Information Management Strategy.
  • A baseline of enterprise information management business requirements was agreed by the implementation committee in May 2016 and will be used as a framework to inform investment decisions about specific capabilities are required.

4c. Enablers—estate (aligning the Defence estate to current and future force needs)

  • The Estate and Infrastructure Group commenced work on an estate strategy. The strategy will be finalised in 2016–17 and will provide direction on how all areas of Defence will manage the estate to ensure that it is aligned to force requirements, and is affordable and sustainable.
  • The work ahead includes developing an estate implementation plan and future estate profile options paper. The future estate profile will present options on what parts of the estate can be optimised through future acquisitions and expansions, and the parts that could be rationalised through disposal. Delivery of an estate strategy, plan and profile are key steps in ensuring that Defence’s estate footprint aligns with current and future force needs.

5. Workforce (developing the right workforce with the right skills)

  • Seven SES Band 3 positions and one three-star position were abolished in 2015–16.
  • Voluntary redundancies were offered to SES and Executive Level 1 and 2 officers, with a total of 675 voluntary redundancies accepted in 2015–16. Further information is available in Chapter 7—Strategic workforce management.
  • Part one of the Defence Strategic Workforce Plan was released in May 2016, providing the strategic direction and defining the people system for the future workforce of Defence. Part two will be released in the second half of 2016, after analysis of the environment and workforce. It will outline initiatives to address risks and other issues that are identified.
  • The rollout of the Australian Public Service skills census across the 20 job families in the Australian Public Service was initiated and is important information to support the development of both Group and job family workforce plans.
  • The development of job family and Group workforce plans has commenced to drive recruitment, learning and development, succession planning and talent management.

Defence is on track to put in place, by 30 June 2017, the remaining substantial changes to the structure, governance, accountabilities, processes and systems to ensure the organisation has reached the point of no return. The Oversight Board, which reports directly to the Minister for Defence, is satisfied with Defence’s progress.

Freedom of information

During 2015–16, Defence received 388 requests for information under section 15 of the Freedom of Information Act 1982 (FOI Act) and finalised 389 requests. This figure includes requests carried over from 2014–15. An additional nine requests, for amendment or annotation of records of personal information, were managed under section 48 of the FOI Act. Defence also received 39 requests for internal reviews of freedom of information decisions and finalised 36 requests for internal reviews. Defence achieved 100 per cent compliance with legislative deadlines in 2015–16.

The Freedom of Information Directorate managed an additional 1,093 requests for information outside the FOI Act. Of these, 521 were requests for access to personnel records. These were processed in accordance with section 15A of the FOI Act, which provides for access to be given in such cases through established administrative channels. Defence received 69 courtesy consultations from other government agencies in 2015–16.

Information Publication Scheme statement

Entities subject to the FOI Act are required to publish information to the public as part of the Information Publication Scheme. This requirement is in Part II of the FOI Act and has replaced the former requirement to publish a section 8 statement in an annual report. Each agency must display on its website a plan showing what information it publishes in accordance with the scheme’s requirements. Further information is available at www.defence.gov.au/ips.

Further information about the Information Publication Scheme is available on the website of the Office of the Australian Information Commissioner at www.oaic.gov.au.

Defence Public Interest Disclosure Scheme

The Defence Public Interest Disclosure Scheme continues to facilitate a strong reporting culture in Defence. The scheme facilitates and encourages reports of suspected wrongdoing, provides support and protection to disclosers, and ensures that suspected wrongdoing is investigated where appropriate.

Defence worked closely with the Commonwealth Ombudsman in 2015–16 to ensure continuing improvement and consistency with the rest of government, in the implementation and operation of the Public Interest Disclosure Act 2013.

During 2015–16, Defence successfully consolidated its authorised officers, which has proved to be a more effective arrangement for managing disclosures. Defence also improved the department’s recording systems to better align with the Public Interest Disclosure Act 2013 reporting requirements.

During 2015–16, Defence experienced a reduction in the number of disclosures received, with a total of 254 matters reported under the Defence Public Interest Disclosure Scheme. Defence accepted 194 matters as public interest disclosures and allocated them for investigation. The reduction is attributed to a number of contributing factors: maturing of the scheme within Defence, including the refinement of assessment processes; de-confliction with other grievance handling mechanisms; and the consolidation and growing competence of authorised officers.