The objective of this report is to provide the Auditor-General’s independent assurance over the status of selected Major Projects, as reflected in the Project Data Summary Sheets (PDSSs) prepared by the DMO, and the Statement by the Chief Executive Officer (CEO) DMO. Assurance from the ANAO’s review of the preparation of the PDSSs by the Defence Materiel Organisation (DMO) is conveyed in the Auditor-General’s Independent Review Report, prepared pursuant to the endorsed Guidelines, contained in Part 3.

Summary

Introduction

Major Defence equipment acquisition projects (Major Projects) remain the subject of considerable parliamentary and public interest, in view of their high cost, contribution to national security and the challenges involved in completing them within budget, on time and to the required level of capability.

The Defence Materiel Organisation (DMO) provides support to Australian Defence Force (ADF) operations through the acquisition and sustainment of ADF capabilities1 and expended some $3.7 billion on major and minor capital acquisition projects in 2012–13.2

Report objective

The objective of this report is to provide the Auditor‐General’s independent assurance over the status of selected Major Projects, as reflected in the Project Data Summary Sheets (PDSSs) prepared by the DMO, and the Statement by the Chief Executive Officer (CEO) DMO. Assurance from the ANAO’s review of the preparation of the PDSSs by the DMO is conveyed in the Auditor‐General’s Independent Review Report, prepared pursuant to the endorsed Guidelines, contained in Part 3.

ANAO analysis on the three key elements of the PDSSs—cost, schedule and the progress towards delivery of required capability, in particular, longitudinal analysis across these key elements of projects over time, are contained in Part 1. Additional analysis on other elements of the PDSSs, for example, Project Maturity is also included in this part.

Further insights and context by the DMO on issues highlighted during the year are contained in Part 2—although not included within the scope of the review by the ANAO.

Review scope and approach

The ANAO’s review of the individual project PDSSs, which are contained in Part 3, was conducted in accordance with the Australian Standard on Assurance Engagements (ASAE) 3000 Assurance Engagements other than Audits or Reviews of Historical Financial Information issued by the Australian Auditing and Assurance Standards Board.

Excluded from the scope of the ANAO’s review is PDSS data on expected future events or the forecast achievement by future dates (including forecasts on delivery of key capabilities), the project financial assurance statements, and major risks and issues. This information relates to future events and depends on circumstances that have not yet occurred or may not occur, or may be impacted by events that have occurred but have not yet been identified. Accordingly, the conclusion of this review does not provide any assurance in relation to this information.

While our work is appropriate for the purpose of providing an Independent Review Report in accordance with ASAE 3000, our review of individual PDSSs is not as extensive as individual audits conducted by the ANAO, in terms of the nature and scope of issues covered, and the extent to which evidence is required by the ANAO. Consequently, the level of assurance provided by this review in relation to the 29 Major Projects is less than that provided by our program of audits.

Review conclusion

In 2012–13, the results of the ANAO’s assurance review of the 29 PDSSs was that nothing has come to the attention of the ANAO that causes us to believe that the information in the PDSSs, within the scope of our review, has not been prepared, in all material respects, in accordance with the Guidelines.

Footnotes

[1] Department of Defence, Defence Annual Report 2012–2013, Chapter 12 – Defence Materiel Organisation, p. 183.

[2] Department of Defence, Defence Annual Report 2012–2013, Part 5 – Financial Statements, p. 338.