Robert Oakeshott (Lyne, Independent) Share this | Link to this | Hansard source

On behalf of the Joint Committee of Public Accounts and Audit I present the committee's report entitled Report 422: Review of the 2009-10 Defence Materiel Organisation major projects report.

Ordered that the report be made a parliamentary paper.

by leave—On 6 December 2006 the Joint Committee of Public Accounts and Audit unanimously agreed to recommend that the Australian National Audit Office receive additional funding to produce an annual report on progress in major Defence projects. This report would detail cost, schedule and capability information for a number of large acquisition projects. The government agreed with that recommendation and approved funding for the report in the May 2008 budget. The intention was that the annual major projects report would provide a means by which accessible, transparent and accurate information could be made available to the parliament and the Australian public about the state of Defence major acquisition projects.

The 2009-10 Defence Materiel Organisation major projects report is the third MPR to be produced, but only the second MPR to be reviewed and reported on by the committee. Therefore, through this review the committee has incorporated ongoing issues that were raised as part of the review of the pilot MPR in 2007-08 but also provides discussion on the Auditor-General's major findings in relation to the 2008-09 MPR in addition to the 2009-10 MPR.

Major acquisition projects are complex and often diverse in nature. This creates challenges for the DMO in presenting consistent data across projects and for the ANAO in reviewing this work. In particular, as qualified audit conclusions have been received for the 2007-08, 2008-09 and 2009-10 MPRs, due to the exclusion of price and expenditure information expressed in base state dollars, the committee focused on evidence received in relation to this particular issue. Through its recommendations the committee has requested that the DMO address the base state dollar issue associated with the qualified audit opinions given, with a resolution of the matter expected for the 2001-12 MPR.

Other areas of importance highlighted during the review include the timing of the preparation of the MPR guidelines, determining the exit criteria for MPR projects, the impact of financial control frameworks on the cost, schedule and capability of projects, analysis of the Gate Review Assurance Board's process and inclusion of earnt value management systems data in the project data summary sheets for individual projects.

The 2009-10 MPR builds on the level and presentation of information provided in the previous MPRs, which in turn improves the readability and utility of the document. As each successive MPR is intended to further progress and improve both accountability and transparency with regard to the management of major defence capital acquisition projects, it is important that the concerns highlighted through the assurance audit process, and consequently the committee's review, be dealt with and addressed by the DMO itself.

On behalf of the committee I would like to congratulate the Auditor-General and the DMO on the cooperative manner in which they and their staff have worked to produce the 2009-10 MPR. Ultimately, the scrutiny provided through the review of the MPR should increase transparency and accountability and therefore provide the Australian public with confidence that Defence procurement dollars are being spent wisely to provide Australian Defence Force personnel with the quality support they deserve. I commend the report to the House.

Yvette D'Ath (Petrie, Australian Labor Party) Share this | Link to this | Hansard source

by leave—As Deputy Chair of the Joint Committee of Public Accounts and Audit, I rise to speak in support of report 422, Review of the 2009-10 Defence Materiel Organisation Major Projects Report. As the chair, the member for Lyne, has already highlighted, this is only the second major project report to be reviewed and reported on by the committee and the third major project report to be produced overall since the Joint Committee of Public Accounts and Audit unanimously agreed to recommend that the Australian National Audit Office receive additional funding to produce an annual report on progress in major defence projects back in December 2006.

It is important to acknowledge the reason such a report was created in the first place, which is to provide a means by which accessible, transparent and accurate information could be made available to the parliament and, importantly, the Australian public about the state of defence major acquisition projects. The government recognises the importance of transparency and accountability in relation to the major project acquisitions by the Defence Materiel Organisation and the important role that the major projects report plays in providing that transparency and accountability.

It is of note that, through its recommendations, the committee has requested that the Defence Materiel Organisation address the base-date dollar issue associated with the qualified audit opinions given, with the resolution of the matter expected for the 2011-12 major project report, the reason being that the qualified audit conclusions have been received for each and every one of the major project reports that have been produced. It is important that we overcome this problem of having these qualified audit conclusions. As the chair has indicated, quite a bit of evidence went to that point and there were questions from the committee members to ensure that we can overcome this problem in the future and provide more transparency.

The work of the Defence Materiel Organisation to improve accountability and transparency in regard to the management of major defence capital acquisition projects and the work that the Defence Materiel Organisation is doing to work with the Australian National Audit Office to ensure this transparency and accountability is acknowledged. However, importantly, we must note that the concerns highlighted through the assurance audit process and consequently the committee's review must be dealt with and addressed by the DMO.

I also take this opportunity to acknowledge and congratulate Mr Ian McPhee, the Auditor-General, and Dr Stephen Gumley, the CEO of DMO, on the cooperative manner in which they and their staff have worked to produce the 2009-10 major projects report. It is my pleasure to commend the report to the House.

Robert Oakeshott (Lyne, Independent) Share this | Link to this | Hansard source

I move:

That the House take note of the report.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

In accordance with standing order 39, the debate is adjourned. The resumption of the debate will be made an order of the day for the next sitting.