B. ANAO Conclusions and Recommendations

ANAO Report No. 34 (2017-18), Defence’s Implementation of the First Principles Review

Conclusion (pp. 7-8)

Defence has implemented a substantial number of the most important recommendations of the Review—relating to building a strong strategic centre within Defence and reforming the capability development process. The implementation of other important recommendations—including the reform and consolidation of Defence’s Systems Program Offices and enabling services—remains a work in progress. Achieving full implementation and the intended results of this agenda will require continued focus across Defence for several more years. Defence is not yet in a position to demonstrate that it has achieved all the intended outcomes of the Review.
Defence established sound governance arrangements for the implementation of the First Principles Review, which were commensurate with the importance and scope of the activity. The Secretary and the Chief of the Defence Force (CDF) invested substantial time and effort, and were seen by Defence as leading the implementation. Responsibility for implementation tasks was clearly allocated to the most senior leaders in the Defence Groups. The implementation schedule was closely monitored and reporting to senior management was regular and thorough. Progress reports were provided to the Government as scheduled. Progress reports have also been provided to the Parliament. Nonetheless, the Joint Standing Committee on Foreign Affairs, Defence and Trade has requested that Defence develop a transparent reporting mechanism by 31 March 2018. Although Defence indicated to the Government that efficiency improvements would be possible, no quantifiable savings have been identified.
Defence has implemented the Review recommendation to establish a strong strategic centre to strengthen accountability and top-level decision-making. Generally, the recommendations leading to changes in organisation structure and changes in responsibility have been introduced promptly, including some important legislative changes. Introduction of the contestability function to test Defence investment proposals has been successful to date and is operating well. There has also been improved engagement with central agencies, but opportunities remain to improve the policy function, especially in regard to ministerial engagement.
Defence has established a single end-to-end capability function by implementing major organisational changes, such as the delisting of the Defence Materiel Organisation, creating the Capability Acquisition and Sustainment Group, and developing a new Capability Life Cycle.
Reform of the Systems Program Offices is expected to run until 2023. Completion of this significant project will be required to realise many of the expected improvements in the efficient, effective and professional delivery of military capability.
Defence has undertaken action to close all but one of the enabling services recommendations. The outstanding recommendation relates to estate enabling services. Defence’s ability to improve enabling functions is limited by the lack of a coordinated, enterprise-wide plan to address the inefficiencies identified by the Review in the Service Delivery work stream.
Defence has implemented the recommendations in the Workforce stream, but delays in implementing the Strategic Workforce Plan, including Defence White Paper People initiatives, will take until 2021. Defence has implemented the recommendations relating to behaviours. Defence is not yet able to demonstrate that the intended outcomes of the recommendations relating to enabling services, workforce and behaviour have been achieved.
Defence is now evaluating whether its implementation of Review recommendations has achieved the intended outcomes. Initial evaluation plans included only selected elements of the Review; however, Defence has now decided to adopt a more comprehensive evaluation framework encompassing all elements of the Review.

Recommendations (p.13)

Recommendation No. 1
That Defence ensures that its evaluation encompasses all of the recommendations of the First Principles Review and seeks to assess whether the intended outcomes of the Review have been achieved.
Defence response: Agreed.

ANAO Report No. 39 (2017-18), Naval Construction Programs - Mobilisation

Conclusion (pp. 8-9)

Defence continues to work towards effective planning and mobilisation to deliver the Australian Government’s Naval Shipbuilding Plan. Successful implementation will depend on actively managing the high to extreme levels of associated risk. While the key elements for success have been identified through the Naval Shipbuilding Plan—focussing on infrastructure, workforce, the industrial base, and a national approach—progress in the planning and delivery of those key elements is mixed. High-level governance arrangements to coordinate and advise on implementation of the Plan are still evolving. Defence is currently meeting scheduled milestones to deliver the Offshore Patrol Vessel, Future Frigate and Future Submarine construction programs, although each program is still at an early stage.
Defence has identified the key elements for a successful continuous shipbuilding enterprise. The Australian Government identified four key program enablers in its 2017 Naval Shipbuilding Plan—infrastructure, workforce, the industrial base, and a national approach. Implementation of the Plan is based on ‘guiding principles’ adopted by the Government, which were informed by lessons learned from previous Australian shipbuilding programs including the Collins Class submarine and Hobart Class Destroyer. The guiding principles focus on achieving productivity, the selection of mature ship designs4, limiting unique Australian design changes, and adopting an integrated approach to design and construction.
At this early stage, the effectiveness of governance arrangements cannot be established. In response to internal governance reviews, Defence appointed a senior responsible officer for the Plan in early 2018. A framework of senior advisory and coordinating committees has also been established.
Defence’s planning and mobilisation activities relating to the four key enablers of the Naval Shipbuilding Plan remain a work in progress. Specifically:
short term shipbuilding infrastructure requirements have been identified and construction of infrastructure has commenced, with longer term requirements under development;
a workforce plan for the naval construction programs as a whole is currently under development, however, the cost-effectiveness of Defence’s approach to maintaining a shipbuilding workforce between the end of the Hobart Class Destroyer build and the new surface ship programs has not been established;
the broad areas of industrial reform required to achieve productive and cost-effective naval construction programs have been identified, but there has been no decision how these reforms might be achieved; and
initial activities have commenced towards adopting a national approach.
Defence is currently meeting scheduled milestones for the naval construction programs, noting that each program is in its early stages. Over time, Defence has advised the Government of the high to extreme risks the shipbuilding programs present. Certain risks are now being realised, including the progress of the Offshore Patrol Vessel through second gate approval without detailed sustainment costs and finalised commercial arrangements.
Defence has not updated its cost assumptions for its naval construction programs to reflect the earlier design and build milestones for its surface ships and the decision to build the Future Submarine in Australia.

Recommendations (p.11)

Recommendation No. 1
That Defence, in line with a 2015 undertaking to the Government, determine the affordability of its 2017 Naval Shipbuilding Plan and related programs and advise the Government of the additional funding required to deliver these programs, or the Australian Defence Force capability trade-offs that may need to be considered.
Defence’s response: Disagreed.
Defence takes an enterprise approach for Naval Construction Programs. The shipbuilding provisions identified in the Integrated Investment Program are consolidated for Government to consider the Naval Construction Program affordability as each project is presented to Government.
Offsets are recommended to Government if there is a shortfall between the funding requirement and existing provision.

ANAO Report No. 31 (2017-18), Managing Mental Health in the Australian Federal Police

Conclusion (pp.7-9)

The AFP lacks a comprehensive and consolidated organisational health and wellbeing framework to enable effective management and support of employee mental health. While the AFP offers a variety of mental health support services, there is no evidence that these services are effective and they are not supported by sound governance, risk management, evaluation or an articulated business rationale. Any reform of the portfolio of services available should be made in the context of available data on employee access, areas of high stress and risk, gap analysis, organisational culture and employee preferences.
The AFP has identified gaps in its management of employee mental health across the organisation and has commenced processes, within existing organisational constraints, to improve the management of employee mental health, which is a complex and sensitive challenge for the AFP and other first responder organisations. Since the end of 2016, eight initiatives have commenced to improve mental health management across the AFP, including a review of AFP’s mental health support services, the establishment of a Mental Health Strategy Board, the launch of an expanded Welfare Officer Network and a wellbeing application (app)—Equipt.
While currently developing a mental health framework, the AFP has not established a clear governance structure for decision-making, information sharing and oversight in relation to employee mental health arrangements. Reporting into the governance structure is not comprehensive or risk-based, making it difficult to identify emerging mental health related risks and to utilise this reporting to inform decision making in resource prioritisation to address increasing mental health risks.
The AFP formally included mental health as a strategic risk to the organisation in October 2016, however this risk identification has not led to substantive engagement and coordinated identification of mental health risks faced by all of the AFP’s functional areas.
The AFP does not currently have in place mechanisms or sufficient data to appropriately align resources with key mental health risks.
Screening processes are in place to assess the suitability of employees’ psychological readiness for sworn roles. These are undertaken consistently as part of the recruitment process into the AFP. Required screening processes are not always taking place prior to an existing employee commencing in a high risk / specialist role with the AFP. Therefore the AFP is not provided with the assurance that all employees in these roles have been assessed as suitable for high risk roles.
Individual training courses have been developed by the Psychological Services team in response to operational requests in specific areas, however the AFP does not have a specific mental health training framework that identifies the competencies and resilience levels required by employees at different stages in their AFP career to inform delivery and prioritisation of training.
Current mechanisms used for identifying employees at risk of psychological injury are limited in effectiveness and do not occur routinely.
There are weaknesses with the AFP’s rehabilitation and return to work arrangements for employees suffering from a psychological injury sustained during their employment with the AFP. These relate to the lack of mental-health specific rehabilitation policies, procedures and training.
The AFP has a range of mental health support services available for employees to access. Recent employee feedback has indicated that the availability and effectiveness of these services is varied, and that there are no systemic arrangements to evaluate support service effectiveness on an ongoing basis. Feedback also indicated that cultural barriers to accessing support and assistance reduces the potential impact of these services.
Information on employee mental health is held across a range of disconnected information systems and multiple hardcopy records which make it difficult for the AFP to monitor and respond to emerging issues.
The AFP undertakes a range of internal reporting on mental health metrics and performance for internal oversight committees.
The external review currently being conducted of the AFP mental health support services, commenced in 2017, provides the AFP with the opportunity to inform the selection and resourcing of the most effective mix of support services to support the mental health needs of AFP employees.

Recommendations (p.11)

Recommendation No. 1

The AFP develop a comprehensive organisational health and wellbeing strategy and governance arrangements based on an integrated approach to staff mental health and wellbeing which incorporates policies, programs and practices that address the AFP’s specific risk profile.
Australian Federal Police response: Agreed.

Recommendation No. 2

The AFP analyse, define and report on mental health risks across the organisation in a consistent manner and develop arrangements to align employee mental health and wellbeing resources to areas assessed as highest risk. During this process the AFP should also assess the effectiveness of the existing controls and treatments used to mitigate mental health risks.
Australian Federal Police response: Agreed.

Recommendation No. 3

The AFP implement a mandatory mental health training framework for all AFP employees, tailored to the various capability requirements throughout their career lifecycle that provides information on identifying signs and symptoms of mental health injury (in self and others) as well as guidance on how to conduct meaningful conversations with staff and colleagues about their mental health.
Australian Federal Police response: Agreed.

Recommendation No. 4

The AFP develop formal processes to monitor and provide assurance that:
employees in specialist roles have their psychological clearance in place before commencing in the role; and
mandatory mental health assessments and psychological debriefs are undertaken for all those who require them, in a timely manner.
Australian Federal Police response: Agreed.

Recommendation No. 5

The AFP, in reviewing available support service options, uses a risk-based approach to determine the optimal mix of services to target identified organisational mental health risks, including:
linking the outcomes of that review with the development of an organisational health and wellbeing strategy;
ensuring the health and wellbeing strategy also addresses the cultural change required to support and encourage employees to access mental health services when required, particularly after involvement in critical incidents or prolonged exposure to high-stress roles; and
establishing performance measures for the selected support services, and implementing monitoring and evaluation arrangements to ensure those services are systematically assessed.
Australian Federal Police response: Agreed.

Recommendation No. 6

The AFP:
consolidate disparate systems and hard copy records in order to establish an electronic health records management system that allows a single point of access to high level health information for each AFP employee; and
establish a strategy for analysing employee health information against data in areas such as workplace incident reporting, Comcare claims, unscheduled leave, exposure to explicit material and information on deceased personnel in order to assist in identifying and addressing known psychological injury risk factors.
Australian Federal Police response: Agreed.

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