1.15 The initial stage of the ANAO's development of processes and procedures to provide independent assurance over the PDSSs focused on reviewing the DMO's project management and reporting arrangements, and the number and nature of different processes in place that contribute to the overall governance of Major Projects within the DMO. This encompassed the following, to the extent that they impact on the preparation of the PDSSs:
• the specific control framework applied to progress tracking and payment systems, including prime contractor progress payments and the reporting of the financial information contained within Section 2 of the PDSSs;
• ongoing review of the ERMF and major risk and issue data contained in the PDSS from each project;
• specific programs for the management of acquisitions such as: Gate Reviews, the tailored oversight arrangements for projects on the Projects of Concern list, assurance mapping processes and skilling initiatives within the Commonwealth and industry;
• as recommended by the JCPAA41:
- the difference in the scale, size and incidence of requirements to be completed between FMR and FOC42;
- base date, out turned and current dollar reporting of expenditure for the 11 projects as listed in the guidelines for 2010-11;
- Measures of Materiel Capability Performance data (previously Measures of Effectiveness) and the transition to the new Materiel Acquisition Agreement (MAA) template incorporating this change; and
• the review also involved analysis of the use of the Earned Value Management System (EVMS) and contingency management following the JCPAA's interest in these subjects.
1.16 This review informed the ANAO's understanding of the DMO systems and processes used to populate the PDSSs for 2010-11, and highlighted issues in those systems and processes that could be beneficially addressed by the DMO in the longer term.
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41 Joint Committee of Public Accounts and Audit, Report 422, Review of the 2009-10 Defence Materiel Organisation Major Projects Report, April 2011, p. xi.
42 Australian National Audit Office, 2010-11 Major Projects Report, Part 2, paragraph 2.22, p. 157.