The ANAO report on Defence’s Management of Materiel Sustainment found that, while the fundamentals of Defence's governance and organisational framework for the management of material sustainment are 'fit-for-purpose', more must be done to improve.
"There remains scope for Defence to improve its performance monitoring, reporting and evaluation activities to better support the management and external scrutiny of materiel sustainment," the report said.
In order to improve these problems and others, such as the functioning of the Systems Program Offices, Defence initiated a reform project as part of its First Principles Review (FPR) implementation. But the report found that the FPR, which was preceded by earlier reform initiatives like the Strategic Reform Program, failed to adequately assess the outcomes of the 'smart sustainment reforms'.
The FPR identified a range of operational problems that "detract from the efficient and effective sustainment of Defence capability", including: adherence to procurement principles, staff capabilities, duplication of effort and transparency of internal costs.
But the report also offered some positive news for Defence, finding that the system it is implementing to effectively monitor sustainment should be highly capable.
"With the introduction of its Sustainment Performance Management System (SPMS), Defence continues to develop a basis for an effective monitoring system for sustainment," the report said.
"Once fully implemented this system should be capable of systematically reporting against a suite of performance indicators settled in agreement with capability managers."
Defence welcomed the report's findings and said it saw many opportunities for improvement as a result.
"The Department of Defence welcomes the Australian National Audit Office (ANAO) performance audit on Defence’s management of materiel sustainment," Defence said.
"Defence notes that the audit was conducted at a strategic level, and acknowledges the opportunities for improvement identified by the ANAO. Defence continues to strive towards efficiencies in the delivery of sustainment outcomes for Defence capability."