Defence can't show that its program to monitor underperforming procurement projects actually has any effect on bringing budgets and timelines under control, an audit report has found.
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The program has become less transparent at the same time as a greater emphasis has been placed on maintaining good relationships with industry, the report said.
The department's $36 billion annual budget includes billions on ships, planes and other vehicles for the defence force runs its "projects of concern" program to attempt to guide problematic builds back on track, but the audit report released on Tuesday wasn't complimentary of its execution.
"Defence cannot demonstrate that the Projects of Concern regime contributes materially to the recovery of underperforming projects," the auditor general said.
Defence no longer has an appropriate framework for the regime, the auditor general said, saying "its current implementation lacks rigour".
The regime was designed to involve ministers in projects considered troubled and off-track.
"Over the last five years, transparency has reduced, the level of formality has declined with explicit criteria replaced by unpublished principles, and processes have become less rigorous with a greater emphasis on maintaining relationships with industry," the report said.
"Maintaining collaborative relationships with industry has become a more dominant element in the governance of the regime."
The involvement of ministers in the program from 2008 onwards strengthened the regime, the report found, with more progress made through regular meetings chaired by ministers beginning in 2011.
Defence agreed with the two recommendations made by the report, to evaluate the regime and introduce a consistent approaching to managing how projects enter and exit the regime. The department didn't agree that it was attempting to protect its relationships with industry by avoiding adding projects to the list of concern.
"The reduction in the number of projects on the Project of Concern list is linked to the changing nature of the Capital Equipment Program as well as the close out of legacy projects," the response said.
In the case of the multi-billion dollar Air Warfare Destroyer project, the report found there was no evidence that being placed on the list "made any difference to the remediation work, given that remediation was initiated independently and already had senior engagement".
Defence's project management office for the destroyer project told the audit office that it was actually the publicity of an earlier audit report and an independent review, commissioned by Defence before it was placed on the list.
The audit office also found that while the project has exited the projects of concern regime, its reason for entering in the first place - shipyard productivity - has deteriorated.
