Senator HOGG —Senator West raised the issue at the last estimates hearing of reports of the theft of expensive and specialised defence equipment such as weapons and night vision goggles, et cetera. I want to follow a couple of those things up. Do we have an estimate of the total value of defence equipment that is stolen or lost each year?

Mr Neumann —We have the amounts for each year that come under fraud. The determined loss under that heading, which includes theft, for 1996[hyphen]97 was $1.67 million approximately; for 1997[hyphen]98 it was $3 million; and to 31 March of the current year, 1998[hyphen]99, it was $1.1 million.

Senator HOGG —So that is a combination of fraud and theft?

Mr Neumann —Fraud and theft. Out of that, the recoveries were about $600,000 for 1996[hyphen]97, $218,000 for 1997[hyphen]98 and, up to 31 March 1998[hyphen]99 it is about $420,000 so far.

Senator HOGG —So on a proportionate basis, your recovery until 31 March this year seems to be a darn sight better than the more recent—

Mr Neumann —But there is a lag effect in it because it depends when you recover it.

Senator HOGG —Some of the $420,000—

Mr Neumann —Comes from previous years.

Senator HOGG —So we cannot identify—

Mr Neumann —There is not enough data because the statistics were kept differently beforehand. There is not enough data anyway over 2[frac34] years, essentially, to argue that there is a pattern. Otherwise, looking at 1997[hyphen]98, you would say, `That's almost double 1996[hyphen]97. It's getting worse.' If you look at this year's figures it is $1.1 million so far, so there is no clear pattern.

Senator HOGG —Do we know whether most of that is goods and equipment or whether it is cash? Do we have an idea or break[hyphen]up?

Mr Neumann —No, I do not have a break[hyphen]up.

Senator HOGG —Are you able to provide me with a break[hyphen]up?

Mr Neumann —I would have to look into that.

Senator HOGG —Is any of that weaponry or ammunition?

Mr Neumann —No, I do not think there are any weapons in that one. It depends how you define a weapon. For example, in the Nowra one, which we were discussing last time, there were a number of knives which were part of equipment sets that were taken. For example, out of a diver's set last time six divers knives were stolen and six were returned or recovered. There were various other knives as well. There were hook knives, eight were stolen and eight were recovered, and there were gerber knives—

Senator HOGG —Can you give us the listing of what has been stolen and what has been recovered?

Mr Neumann —For Nowra?

Senator HOGG —No.

Mr Neumann —I do not think we would be able to provide that sort of detail for everything.

Senator HOGG —What about 1997[hyphen]98?

Mr Neumann —I could take broad categories, probably, but I do not think—

Senator HOGG —Can you give me, by broad categories, if you can, what has been stolen and what has been recovered? I am particularly interested in any specialised equipment such as night vision goggles, as we have mentioned previously, ammunition, rifles, weapons—any form of weaponry. And obviously if you are recovering $600,000, $218,000 and $420,000, one could assume that there is still a large cache outstanding. Is that a reasonable assumption?

Mr Neumann —Or yet to be recovered.

Senator HOGG —Or yet to be recovered?

Mr Neumann —Some of it will not ever be recovered, but some of it will be recovered in future years, hopefully.

Senator HOGG —Do we know basically who are responsible for the thefts? Are they inside jobs or are they people from outside the defence forces?

Mr Neumann —I think these are basically inside jobs usually.

Senator HOGG —Could we have some sort of break[hyphen]up of any prosecutions that may well take place?

Mr Neumann —Do you want it by criminal prosecutions and then by Defence Force and Public Service Act?

Senator HOGG —Yes, please. What are the main establishments or bases where these thefts have occurred? Are there some areas which are more vulnerable than others—some establishments which are more prone to have property or goods stolen from them than others? Also, what steps have Defence taken to protect their assets against further theft?

Mr Neumann —I am not sure there is actually any pattern in terms of establishments. The second issue is what we have done about it. Going back to weapons and ammunition in particular, we conducted a series of audits over the last year or so and, overall, most units were managing their weapons effectively, but some required significant improvement in their procedures for storage and accounting. Sometimes when ammunition is missing it is because of the accounting, not because it has actually physically gone missing. There is also currently
under way a security review of bulk holdings of weapons and ammunition as opposed to the unit holdings.

Senator HOGG —That is a bit concerning if they can't account properly. Are we giving them some training?

Mr Neumann —Sometimes it is a matter of a transcription error, sometimes it is a matter of training; it depends which particular unit it is. But most commanders actually take on board the audit findings and take remedial action.

Senator HOGG —Who gets to see these audit reports?

Mr Neumann —The commanders always get to see them. The summary is also produced, which is available for other members of the defence organisation.

Senator HOGG —Could we get a look at some of those audit reports or the summary?

Mr Neumann —We could probably do the summary but, once they become public, it is a question then of frankness as the auditors go about their task. I understand that in Canada, where they are now public, the level of detail and the comments have been softened. When people know they are writing for a public audience, they tend to perhaps pull their punches a little bit. So that would be an issue that we would have to think about.

Senator HOGG —It is something, though, that is reasonably before the scrutiny of this committee.

Mr Tonkin —The way we would approach it is that individual audits are conducted at the request of commanding officers or they are centrally directed. Those audits come back to the management that requested them. Summaries of the findings and any thematic findings are then reported to the Defence Audit and Evaluation Committee, which I chair, and which essentially is the audit committee of Defence. We are then obliged to act on the summaries which come forward, act on the trends. We either task more high[hyphen]level audits to be conducted or we might take broader evaluations. We also then report to the defence executive or formally to the secretary on the outcomes of these audit activities, as well as other activities of the Defence Audit and Evaluation Committee. The summary findings were, I thought, part of the materials that came forward in the annual report or in supplementary materials to the annual report. I think there are some summaries of that. The audit reports to which the Inspector[hyphen]General is referring would be several feet high in any given year.

Senator HOGG —Thanks very much for the offer, but I do not want those. A summary would suffice very well.

Mr Tonkin —We might see what we can do.

Senator HOGG —Just looking at it, from the 1996[hyphen]97 year on there is in the vicinity of $5.77 million worth of fraud and/or theft, and the recovery is of the order of $1.2 million, which is a not insignificant amount of money to be concerned about. Whilst I understand that recovery is still proceeding, it is still something that I think we should reasonably inform ourselves of.

Mr Tonkin —We will see what summary material that flows from the issues that Senator Hogg has explored can be provided and see whether that meets your needs.

Senator HOGG —In particular, I am very interested in the class of goods that are being stolen. Some of it may well be specialised equipment. Mr Neumann, does the Inspector[hyphen]General play any role in operations such as the ones that I discussed with Navy earlier—which
they were unable to answer—where they are purportedly running an Operation DIAD? Do you get involved in those sorts—

Mr Neumann —That I think has been run by the Naval Investigative Services, which is separate from the Inspector-General's organisation.

Senator HOGG —So you do not necessarily involve your organisation in those sorts of operations. Do you look at any illegal operations that might happen within the defence forces? If so, by what category?

Mr Neumann —There is a threshold of $5,000, at which stage the service police—if I can use that category broadly to cover the three service police—are supposed to consult with the Inspector[hyphen]General's organisation to determine the way ahead. Then, depending on what that is, and depending on the scope of it, we might refer it to the Federal Police or it might be referred to the relevant state police.

Mr Tonkin —Mr Chairman, at the risk of prolonging the session, the Deputy Chief of the Air Force has answers to four of the six questions that the senator raised, which might properly be dealt with now.

Senator Newman —Rather than take them on notice, we can give you the answers now.

Senator HOGG —All right. Yes.

CHAIR —Air Vice Marshal, you have seven minutes.

Air Vice Marshal Titheridge —I think I can do it a lot quicker than that. Senator, you asked several questions of Air Force, which we took on notice. I will go through four of those. The first question was: have we passed to Mr and Mrs Moffat the information about flight paths over the last 10 years. We have; that was passed in August last year to the Moffatts. The second was: did we promulgate the usage of the range on public holidays. Yes, we did. That was an administrative error at Williamtown. We have not flown on public holidays. In fact, going over the records for the last five years, we cannot find a record of us flying on a weekend or a public holiday in that time. The third issue was about the five Hornet flights on 30 April. Mrs Moffatt reported the cloud being 600 feet. That was correct overhead Williamtown. The Hornets did overfly Mrs Moffatt's at 1,500 feet, at the normal height, on that day.

Senator Newman —Did you say 1,500?

Senator HOGG —I understood the figure was 1,500 metres.

CHAIR —It was 600 feet.

Senator HOGG —600 feet was the cloud level.

Air Vice Marshal Titheridge —The 600[hyphen]foot cloud level was over the base at Williamtown. The Hornets transitioned across Mrs Moffatt's residence at the height they normally planned—at 1,500 feet.

Senator HOGG —1,500 feet—not metres.

Air Vice Marshal Titheridge —Not metres; 1,500 feet. The last question was about the 88[hyphen]day promulgation. That was a 1997 figure. It has increased since then to about 120, based on the Macchi flights.

Senator Newman —That is a terrific way to get answers to questions on notice, isn't it?

Senator HOGG —I am very impressed. Thank you, Air Vice Marshal. I am impressed.

CHAIR —We would have been finished by 9.30 if we had done it all morning. I thank you, Minister, and the officers of the Department of Defence.

Proceedings suspended from 1.24 p.m. to 2.42 p.m.