Annual Report 2003-04

External Scrutiny

Auditor-General's Reports

Six Auditor-General's reports relating specifically to Defence were tabled during the year. The key findings and recommendations of each report were referred to relevant areas within Defence for implementation.

Australian National Audit Office reports and general information on the audit office's operations, including its audit timetable, can be accessed through the Australian National Audit Office's website at: http://www.anao.gov.au.

Audit Report No. 10, 27 October 2003 - Australian Defence Force Recruiting Contract

As part of its 2001 inquiry into the recruitment and retention of ADF personnel, the Senate Foreign Affairs, Defence and Trade References Committee reviewed Defence's contract with Manpower Services (Australia) Pty Ltd for trialing the outsourcing of recruiting services to the ADF. In its subsequent report, the committee commented that the original contractual arrangements deserved further scrutiny by the Australian National Audit Office. In examining the management of the contract, the Australian National Audit Office looked at the evaluations conducted at the end of each contractual phase, roles and responsibilities associated with ADF recruiting, and Defence's monitoring of contractual performance and management of risks associated with ADF recruiting.

The Australian National Audit Office made two recommendations to which Defence agreed.

Audit Report No. 32, 2 March 2004 - Wedgetail Airborne Early Warning and Control Aircraft: Project Management

The audit reviewed the Defence Materiel Organisation's management of the $3.43 billion Wedgetail Airborne Early Warning and Control project. At the time of the audit, the Airborne Early Warning and Control systems were still in their early development phase and, by November 2003, Defence had spent $1.107 billion on the project.

The Australian National Audit Office made six recommendations to which Defence agreed.

Audit Report No. 43, 23 April 2004 - Defence Force Preparedness Management Systems

The objective of the audit was to provide assurance to Parliament about the adequacy of Defence preparedness management systems and to identify possible areas for improvement. The audit focused on the systems and processes that Defence uses to manage preparedness. The Australian National Audit Office did not review the preparedness levels of specific capabilities, nor did it cover capital acquisition processes. The audit included coverage of preparedness systems architecture; control and direction of preparedness; coordination among contributors to preparedness; and performance management and preparedness.

The Australian National Audit Office made seven recommendations to which Defence agreed.

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Audit Report No. 45, 29 April 2004 - Army Individual Readiness Notice Follow-up Audit

The objective of the follow-up audit was to assess the Army's progress in implementing the Australian National Audit Office's audit recommendations and to examine and assess any developments in relation to the Army Individual Readiness Notice since the 1999-2000 audit report, and the 2001 Joint Committee of Public Accounts and Audit report. The Army updated the Army Individual Readiness Notice policy in 2001 and 2004.

The Australian National Audit Office made one recommendation to which Defence agreed.

Audit Report No. 47, 25 May 2004 - Developing Air Force's Combat Aircrew

The audit objectives were to provide assurance to Parliament on the adequacy of the measures and plans instituted by Defence to ensure that the combat aircrew workforce met military preparedness requirements in the future and to identify possible areas for improvement.

The Australian National Audit Office made three recommendations to which Defence agreed.

Audit Report No. 59, 30 June 2004 - Defence's Project Bushranger: Acquisition of Infantry Mobility Vehicles

This was not an audit of contractor performance, but of the formation and contract management of the acquisition project by Defence. The objective of this audit was to provide an independent assurance on the effectiveness of Defence's management of the acquisition of armoured infantry mobility vehicles for the ADF. The audit sought to identify the initial capability requirements; analyse the tendering and evaluation process; and examine the management of the project by Defence.

The Australian National Audit Office made seven recommendations to which Defence agreed.

Cross-Portfolio Reports

Defence also participated in, or contributed to, the following cross-portfolio Auditor-General's reports.

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Defence Force Ombudsman

There were no formal reports to the Chief of the Defence Force pursuant to Section 15 of the Ombudsman Act 1976, nor were any reports raised under sections 16, 17, or 19 of the Act relating to the operations of the ADF during the period under report.

Decisions of Courts and Tribunals

During 2003-04, there were no decisions of a court or tribunal in relation to matters handled by the Defence Legal Service that resulted in a significant change to the law.

Common law actions for damages for personal injury against the Commonwealth by former crew members of HMAS Melbourne, alleged to have arisen from its collision in 1964 with HMAS Voyager, continue in the Supreme Courts of New South Wales and Victoria. Common law claims are also being defended in the Supreme Court of Queensland in which plaintiffs allege injury caused by their participation in various deseal and reseal programs conducted on F-111 aircraft.

On 19 December 2003, the State Coroner of Western Australia handed down his findings in the inquest into the death on 5 May 1998 of four crew members of HMAS Westralia after an onboard fire. In his findings, the State Coroner concurred with the earlier findings of the Navy Board of Inquiry that each of the deceased had died as the result of being asphyxiated in a fire caused by the failure of an incorrectly-fitted engine fuel system supply line.

The confidential mediation of the claim in the Federal Court of Australia by the Commonwealth against ADI Limited, Parker Enzed Technologies Limited, Jetrock Pty Ltd (in liquidation) and Todd Hydraulics Pty Ltd, for damages relating to the 1998 fire onboard HMAS Westralia, has been terminated and the matter is now proceeding to trial. A hearing in early 2005 is expected to be ordered by the Court.

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