This audit would examine the efficiency and economy of the Department of Defence’s management of its inventory of general stores, including its procurement methodology, its system for determining order quantities, and its plans and procedures for managing the category of general stock classified as excess but not obsolete.

The Department of Defence had a balance of $7.8 billion in inventories as at 30 June 2021, which includes general stores inventories ($2.5 billion), fuel ($49.7 million) and explosive ordnance ($5.3 billion). While Defence’s management of explosive ordnance and fuel have been the subject of ANAO performance audits in the last decade, the ANAO has not examined Defence’s management of its general stores inventory.

This audit would examine whether the Department of Defence (Defence) has effective and efficient sustainment arrangements for the Royal Australian Navy’s fleet of Canberra Class Amphibious Assault Ships (also referred to as ‘Landing Helicopter Docks' (LHD)) and Hobart Class Guided Missile Destroyers (DDG) (also referred to as ‘Air Warfare Destroyers’ (AWD)).

The Royal Australian Navy operates two Canberra Class LHDs and three Hobart Class AWDs. These ships were commissioned between 2014 and 2020. The Canberra Class provides a forward operating capability for the deployment of troops and support assets. The Hobart Class provides air defence for accompanying vessels and land assets, in addition to undersea warfare capabilities and naval gunfire support. The acquisition cost of these warships was publicly reported to be over $12 billion.