Transparency and accountability in relation to major Defence acquisitions has been a longstanding focus of parliamentary interest and the Auditor-General’s audit work program. This performance audit of Defence’s management of its capability investment priorities incorporates how Defence manages the Integrated Investment Program (IIP) to support the delivery of future military capability requirements. The biennial IIP sets out Defence’s capability investment priorities and is a key mechanism for providing visibility over planned investment decisions. This audit will consider whether the governance arrangements for managing Defence’s capability investments are fit-for-purpose and whether Defence is delivering on its capability investment priorities. This will include reviewing a selection of Defence major equipment acquisition projects with respect to agreed cost, scope and schedule.

The ANAO proposes to examine:

• Has Defence established fit for purpose enterprise level governance, control and decision making arrangements to manage its capability investments?
• Is Defence delivering on its capability investment priorities? This includes reviewing Defence major equipment acquisition projects with respect to agreed cost, scope and schedule. In doing so, the ANAO will draw upon data that is used for Defence’s performance statement performance measure 6.1 to report on the aggregate analysis across major acquisition projects under this measure, by domain, and highlight performance against Government second pass approval; and provide dashboards and analysis of selected major projects, including projects that have been reported in the 2024–25 Defence Major Projects Report.

This performance audit is part of the Auditor-General’s audit work program of performance audits of Defence focussed on acquisition and sustainment activities and the Auditor-General’s audits of Defence’s financial statements and performance statements which include targets for delivery of future capability.