"The Australian National Audit Office's latest report shows that while Defence is making improvements, we still face some significant challenges in financial accounts management," the Secretary of the Department of Defence, Mr Richard Smith, said today.
The Secretary said that while the number of issues raised by ANAO about Defence's accounting had increased, the Auditor General had recognised that overall the scope of Defence's qualifications had been substantially reduced.
He said the new qualifications relating to employee leave records, and the increase in the number of audit findings identified by the Auditor General, reflected in part the work done by Defence itself in identifying areas for improvement, and in part the inclusion of a number of long standing issues for the first time.
"The Department remains committed to a substantial program of continuous financial improvement," said Mr Smith. "This is reflected in our recent creation of a Financial Statements Project Board.
"The seriousness with which we are treating this issue can be seen in the Board's membership - myself, the Vice Chief of the Defence Force, the three Service chiefs and senior Defence group heads.
"It's important to note that our problems are not related to cash accounting. Rather, our problems are those of accrued provisions, and the detailed price recording of Defence's massive asset holdings in the accrual world.
"Many of these are legacy issues. We recognise them and are working hard to address them, though complete resolution may take several years more."
Mr Smith said it was worth noting that these findings in the Auditor General's report have no implications for Defence in terms of its capacity to conduct military operations, or on future capability acquisition decisions.
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Defence Secretary Comments on ANAO Report Findings
