Annual Report 2004-05

External Scrutiny

Auditor-General's Reports

The Inspector-General's Group is responsible for identifying Auditor-General reports that have implications for Defence.¹ Seven 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.

Audit Report No. 1, 8 July 2004 - Sale and Leaseback of the Australian Defence College Weston Creek

The audit examined the process of identifying the Australian Defence College, Weston Creek, Australian Capital Territory, property for sale and leaseback and the management of the sale process. The objective of the performance audit was to examine the efficiency and effectiveness of the management of the sale process by Defence, including assessing whether the sale and long-term leaseback arrangements adequately protect the Commonwealth's interests.

The Australian National Audit Office made five recommendations to which Defence agreed, two with qualification.

Audit Report No. 5, 4 August 2004 - Management of the Standard Defence Supply System (SDSS) Upgrade

The audit on the Defence Project Management of the SDSS Upgrade Project examined Defence project management procedures and practices in the information management systems domain.

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

Audit Report No. 9, 25 August 2004 - Assistance Provided to Personnel Leaving the ADF

The audit examined the range of support made available to ADF personnel making the transition from military to civilian life; the extent to which the assistance is utilised; the cost to Defence of such assistance; and the relevant responsibilities of those who deliver the assistance.

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

Audit Report No. 25, 1 February 2005 - Army Capability Assurance Processes

The audit examined the relationship between the strategic guidance and capabilities provided by Army, through analysis of the Army capability management and reporting framework. The objectives of the audit were to: assess Army capability management and reporting processes; determine whether these processes efficiently and effectively manage resources to provide Army capability; and accurately indicate the capability provided by Army.

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

Audit Report No. 29, 25 February 2005 - The Armidale Class Patrol Boat Project: Project Management

The objective of the audit was to provide independent assurance of the effectiveness of Defence's management of the acquisition, and future provision of the Armidale-class patrol boats capability, relating to the in-service support contract, provision of infrastructure, and crewing sustainability.

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

Audit Report No. 44, 25 May 2005 - Defence's Management of Long-term Property Leases

The objective of the audit was to examine Defence's management of leases that have resulted from property sale and leaseback transactions. Leases subject to review were for a period of ten or more years and included the following six properties: the Defence plazas in Sydney, New South Wales and Melbourne, Victoria; the Hydrographic Office Wollongong, New South Wales; Defence National Supply Distribution Centre Moorebank, New South Wales; Campbell Park Offices and the Australian Defence College Weston Creek in Canberra, Australian Capital Territory.

The audit examined the process for identifying the properties for sale and leaseback and the sale approval process. The audit sought to determine the basis on which the properties were proposed for sale and leaseback and the financial impact for the Government. It also reviewed the lease terms and conditions to determine whether they protect the Government's interests, and examined Defence's management of commitments arising from the leases.

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

Audit Report No. 45, 27 May 2005 - Management of Selected Defence System Program Offices

The audit focused on the Defence Materiel Organisation's equipment acquisition and support, at the system program management level. The objective of the audit was to assess the adequacy of Defence's capital equipment project definition, approval, acquisition and logistics support management. The Systems Program Offices subject to audit were:

• Aerospace Systems Division's Tactical Fighter Systems Program Office, which is responsible for acquisition and logistics support management of the Air Force's F/A-18 and Hawk 127 fleets and associated equipment;
• Land Systems Division's Track Manoeuvre Systems Program Office, which is responsible for the acquisition and logistics support management of Army's Leopard Tanks and M113 Armed Personnel Carrier fleets;
• Electronic and Weapon Systems Division's Over-the-Horizon Radar Systems Program Office, which is responsible for acquisition and logistics support management of the Jindalee Operational Radar Network and Jindalee Over-the-Horizon Radar systems; and
• Maritime Systems Division's Fast Frigate Guided System Program Office which is responsible for the support and upgrade of the Navy's Fast Frigate Guided fleet.

In view of the significant role that the Systems Program Offices play in managing major capital equipment acquisition projects, the audit includes a case study of the $1.45 billion upgrade project (SEA 1390).

The Australian National Audit Office made eight recommendations to which Defence agreed; one with qualification, one in principle.

Cross-Portfolio Reports

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

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