The opaque world of Defence spending is set for more scrutiny, with a parliamentary inquiry recommending that the department's financial reporting be more transparent and straightforward.
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The Defence Department's spending on sustainment - keeping its military equipment up to standard so that it may be deployed at any time - has been the subject of an audit office report and now a parliamentary inquiry has recommended a range of actions so that its spending is more easily examined.
The Joint Committee of Public Accounts and Audit, led by Liberal Senator Dean Smith, found that financial reporting on Defence sustainment was predominantly "adequate," but that "there were variations in descriptive information, including no explanation of variations in full year outcomes, the use of different terminology across documents, and missing links between what was planned and what was actually achieved".
The report recommended that Defence's corporate plan, its portfolio budget statements, additional estimates statements and annual reports be overhauled to give a "clear read" of the financial information and assessment of performance contained within them. A "clear read" means that the objectives and achievements related to spending are stated and reported in a straight-forward way.
"Defence's internal reporting regime should be open to the minister and the secretary, and report using plain language," the report said.
"Terms like 'overachievement' should not be used to describe overspending. More broadly, the culture in the Department of Defence will need to continue to change to reinforce reform across this area."
In its submission to the inquiry, Defence said it had to weigh up transparency about its spending outcomes against national security. "Of utmost importance is the need to be cognisant of the national security risks associated with providing a high level of public visibility regarding military capability," the submission said. The committee acknowledged that it was important to protect national security but "this should not preclude adequate parliamentary scrutiny".
The committee also wants Defence to consolidate sustainment spending information from across its corporate plan, portfolio budget statements and additional estimates statements and annual report in one place online "that allows for clear and easy scrutiny of sustainment expenditure".
The committee has also asked for another five reports or updates on progress of other reviews within the next six months, as well as a report on "behavioural changes that have accompanied improvements in internal performance reporting".
Defence's budget across the 2017-18 year is $34.6 billion, with spending on the sustainment program coming in at $9.4 billion. It's expected to go up by 21.5 per cent over the next four years.
The report took issue with the engagement of consultants without clear outcomes related to their contracts, and said culture needed to change around finding savings.
"The Committee acknowledges that while Defence has found savings by seeking efficiencies, re-evaluating contracts and pursuing performance based contracts, the outcome of this process has been inconsistent and unclear," it said.
