Chapter 1 Introduction
Background
1.1
The 2010-11 Major Projects Report (MPR) is the fourth produced by the
Defence Materiel Organisation (DMO) and the Australian National Audit Office
(ANAO). The Joint Committee of Public Accounts and Audit (JCPAA) has reviewed
the three previous MPRs (2007-08; 2008-09; 2009-10) and reported on two
(2007-08; 2009-10).
1.2
The MPR came about as a result of a recommendation made in the Senate
Foreign Affairs, Defence and Trade References Committee Report into Materiel
Acquisition and Management in Defence in 2003 that the Department of
Defence (Defence) produce an annual report on progress in major defence
projects, detailing cost, time and technical performance data for each project.[1]
1.3
In December 2006 the JCPAA unanimously agreed to recommend that the ANAO
receive additional funding to produce such a report. In August 2008 the JCPAA
published Report 411: Progress on equipment acquisition and financial
reporting in Defence. Chapter 5 of that report provided a broad outline of
the key features deemed critical for inclusion in the MPR.
1.4
The aim of the MPR is to provide the Parliament and wider Australian
community with accessible, transparent and accurate information about the
status of Defence’s major acquisition projects, providing a basis for
longitudinal analysis of project performance. The report is comprised of a
series of Project Data Summary Sheets (PDSSs), an overview and summary by the
DMO and an overview and limited assurance review undertaken by the
Auditor-General.
1.5
The MPR is automatically referred to the JCPAA in accordance with its
statutory obligations to examine all reports of the Auditor-General that are
tabled in each House of the Parliament.[2]
Role of the committee
1.6
The JCPAA has reviewed the MPR annually to assess the content,
accessibility and transparency of the information provided on major projects.
The Committee’s subsequent report has provided suggestions and recommendations
to improve the format and presentation of the data and ensure that the MPR
fulfils its original objective to enhance transparency and accountability.
1.7
As well as reviewing the MPR, the Committee reviews and endorses the MPR
Work Plan annually. The MPR Work Plan includes:
n the criteria for
project selection;
n the roles and
responsibilities of DMO in the production and review of the MPR;
n Guidelines for
producing the PDSS;
n format for the PDSS
template; and
n an indicative program
schedule.
Scope and conduct of the review
1.8
This report includes discussion on a selection of the ongoing issues
highlighted in previous reviews of the MPR and discussion on the future role of
the MPR. The Committee considered Government Responses to its previous report, Report
422: Review of the 2009-10 Defence Materiel Organisation Major Projects Report
during the course of the review.
1.9
The Committee received two submissions to the inquiry, which are listed
at Appendix A.
1.10
The Committee held a public hearing on 21 March 2012 in Canberra with
representatives from Defence, the DMO and ANAO. Witnesses who appeared before
the Committee at this hearing are listed at Appendix B. The Transcript of
Evidence received at this hearing is available from the Committee’s website at:
http://www.aph.gov.au/Parliamentary_Business/Committees/House_of_Representatives_Committees?url=jcpaa/defenceannual0311/index.htm.
Report structure
1.11
Chapter 2 provides an overview of the 2010-11 Major Projects Report
including the Auditor-General’s assurance audit.
1.12
Chapter 3 identifies and examines the ongoing issues identified in the
Committee’s review of the MPR, both in 2010-11 and previous years. Those issues
include the presentation of financial data, project slippage and possible exit
criteria for projects from the MPR as well as an overall evaluation of the
usefulness of the MPR.
