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Audit Act - Auditor-General - Audit reports - 1994-95 - No. 2 - Department of Defence: Follow-up audit - Management of army training areas - Preliminary study: acquisition of additional F-111 aircraft


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THE AUDITOR-GENERAL

Audit Report No.2 1994-95

Department of Defence

Follow-up Audit

Management o f Army Training Areas

Preliminary Study

Acquisition of Additional F-111 Aircraft

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A u s t r a l i a n N a t i o n a l A u d i t O f f i c e

The Auditor-General

Audit Report No.2 1994-95

Department of Defence

Follow-up Audit

Management of Army Training Areas

Preliminary Study

Acquisition of Additional F - lll Aircraft

Tony Minchin Peter Robinson Tina Long

A u s t r a l i a n G o v e r n m e n t P u b l i s h i n g S e r v i c e , C a n b e r r a

®Commonwealth o f Australia 1994

ISSN 1036-7632

ISBN 0 644 35097 0

This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Australian Government Publishing Service. Requests and inquiries concerning reproduction and rights should be addressed to the Manager, Commonwealth Information Services, Australian Government Publishing Service, GPO Box 84, Canberra ACT 2601.

Produced by the Australian Government Publishing Service

Australian National Audit Office Canberra ACT 13 October 1994

Dear M r President Dear M r Speaker

In accordance with the authority contained in the Audit Act 1901, I have had the ANAO undertake a follow-up of an efficiency audit of the Department of Defence - Management of Army Training Areas and a preliminary study of the purchase by the Department of

Defence of additional F - l l l aircraft. I now present this report and the accompanying brochure to Parliament.

Yours sincerely

.

J.C. Taylor Auditor-General

The Honourable the President of the Senate The Honourable the Speaker of the House of Representatives

Parliament House Canberra ACT

The Auditor-General is head of the Australian National Audit Office. l ie and the A NAO are

independent o f the Government. The ANAO assists the Auditor-G eneral to carry out his duties

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A u s t r a l i a n N a t i o n a l A u d i t O f f i c e

G P O B o x 7 0 7

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p h o n e ( 0 6 ) 2 0 3 7 5 3 7 , f a x ( 0 6 ) 2 0 3 7 7 7 7

AUDITING FOR AUSTRALIA

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Contents

Abbreviations and Acronyms vii

1. Follow-up Audit - Management of Army Training Areas 1

Key Points 1

Report Summary 2

Background 2

Action on recommendations of Report No.38 1991-92 2

Conclusion 4

Further action 4

Follow-up audit 4

Management of Training Areas 5

Global management of training area operations 5

Army property planning 6

Training area asset register 7

Training Area Acquisition and Leasing 9

Army Manual of Accommodation and Works 9

Leasing of training areas 11

Evaluation of prospective training areas 12

Costing and Utilisation Data 16

Day-to-Day Management of Training Areas Organisation and staffing Policy and procedures 22

Training area security and safety 25

Storage of ammunition on training areas 30

Repairs and maintenance 30

Disposal of Training Areas 36

Property disposal 36

Yampi Training Area 38

Defence Environmental Management Processes 40

Environmental organisational responsibilities 40

Environmental policy development 41

Environmental management information systems 42

Environmental research 44

Army Land Management Practices 46

Determining land use practices 46

Unexploded ordnance 47

Environmental organisation staffing 50

K> N>

2. Preliminary Study Acquisition of Additional F - l l l Aircraft 51

History of F-l 11 fleet 51

Decision to purchase aircraft 51

Aircraft purchased 52

Compatibility with existing aircraft 52

Use of new aircraft 54

Management of the purchase 54

Series Titles 56

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Abbreviations and Acronyms

ANAO APG APiN Λ UP

Australian National Audit Office Australian Property Group Army Presence in the North Avionics Update Program

BASC Base Administrative Support Centre

csmo Commonwealth Scientific and Industrial Research Organisation

DAS DCFA-A DEH DGAW-A

DI(G) DRSR DTAMIS

Department of Administrative Services Directorate of Costing and Financial Analysis - Army Environment and Heritage Section Director General Accommodation and Works - Army

Defence Instruction (General) Defence Regional Support Review Defence Training Area Management Information System

EIA EIS EM P EPIP

E-RMS

Environmental Impact Assessment Environmental Impact Statement Environmental Management Plan Environmental Protection (Impact of Proposals) Act

Environmental Resource Mapping System

F P D IV FMS

Facilities and Property Division Foreign Military Sales

HQ ADF Headquarters Australian Defence Force

LM P Land Management Plan

MAW MBTA MIS MOU

Manual of Accommodation and Works Mount Bundey Training Area Management Information System Memorandum of Understanding

ΝΑΤΑ NFP NEWS

Northern Australia Training Area New Facilities Proposal NSW National Parks and Wildlife Service

RAAF Royal Australian Air Force

SWBTA Shoal water Bay Training Area

USAF UXO

United States Air Force Unexploded Ordnance

VCDF Vice Chief of the Defence Force

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1. Follow-up Audit - Management of Army Training Areas

Key Points

The follow-up of Audit Report No.38 1991-92 found that:

• Defence had made progress toward the identification of future training area requirements, and the development o f an environmentally sustainable, tri-service approach to training area use and management.

• Yet, thirteen of the seventeen recommendations accorded the highest priority for implementation in Audit Report No.38 had not yet been fully implemented.

• Of the 43 recommendations made in Report No.38: - implementation had been completed in regard to thirteen - no action had been initiated to address five, and - some action was under way on eleven, but only proposed on fourteen.

• Defence had not yet fully implemented eighteen agreed recommendations that the Department of Finance assessed as requiring no further reporting.

• There had been delayed or insufficient action taken by Defence in regard to a number of recommendations. As a result:

- there was still a need for a more coordinated control of training areas at the corporate level (Rec. 1)

- much of the information necessary to make informed management decisions regarding training areas, such as utilisation, costing and environmental data, was still not available as the necessary information systems were still being developed (Rees. 8, 9, 10, 11, 33 and 34)

- Defence needs to provide further policy and procedural guidance regarding a number of aspects of training area management, such as acquisition, rationalisation and review, environmental management and security (Rees. 5, 6, 15, 17, 27, 31, 32, 39 and 42)

- existing funding mechanisms may not be adequate to ensure the timely repair and maintenance of training areas (Rec. 25), and

- the scope for rationalisation of the training estate did not appear to have been fully examined (Rec. 28).

Report Summary

Background

1. The Auditor-General’s Audit Report No.38 1991-92 was tabled in June 1992. It recounted the findings of the Australian National Audit Office (ANAO) relating to the Australian Army’s management of its training areas and the environmental management processes within the Department of Defence.

2. Report No.38 found that there was inadequate control at the

corporate level over Army’s training estate, with little information collected or monitored. Army had no quantifiable measures to determine whether training areas were sufficient for, or exceeded, Army’s training requirements or to judge the cost-effectiveness of the training estate. The asset value of the estate was not known, and the ANAO considered there

was scope for its rationalisation. Most training areas were contaminated with unexploded ordnance (UXO), and the ANAO stressed the need to minimise UXO pollution. There were inadequacies in the procedures for training area acquisition and in the level of repair and maintenance funding. The Department of Defence’s environmental policy had been in draft form for eight years and the development of environmental management information systems was uncoordinated, with parallel development of similar systems occurring.

3. The report put forward 43 recommendations, of which Defence agreed or agreed in principle with 40. This follow-up audit has assessed the progress of Defence in implementing the recommendations or in otherwise remedying the deficiencies identified.

Action on recommendations of Report No.38 1991-92

4. Following Report No.38, Army conducted its own study of the management of training areas which confirmed those ANAO findings it examined and recommended action be taken to implement the audit recommendations. However, many of the tasks which arose out of it were still at a preliminary stage at the time of this follow-up audit, some two years after Report No.38 was tabled.

5. Of the 43 recommendations put forward, implementation had been completed in regard to thirteen (Recommendations 2, 3, 7, 16, 20, 23, 24, 26, 30, 35, 36, 38 and 43) but no action had been initiated in regard to five (Recommendations 6, 15, 29, 32 and 41). Of the remaining 25 recommendations, some action was under way in regard to eleven, but was only proposed on fourteen. Although not agreed to by Defence in

its response to Report No.38, the ANAO remains of the view that Recommendations 29 and 32 should be implemented. Defence also disagreed with Recommendation 26; however, as noted above, the ANAO considers this recommendation to have been adequately addressed.

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6. The AN AO considered seventeen of the 43 recommendations in Report N o.38 had priority for implementation. Of those, only four (Recommendations 3, 16, 26 and 38) had been fully implemented at the time o f this follow-up audit. Action to address a further seven of the

priority recommendations (Recommendations 8, 10, 11, 18, 34, 39 and 42), although not yet completed, was under way through the following initiatives:

• development of a Defence Training Area Management Information System to provide a hierarchical system capable of supporting the bookings, safety, environmental management, and cost monitoring functions of training areas

• development of a Defence policy on the contamination of training areas with UXO, and

• investigation of the procurement of warning signs which include the use of internationally recognised danger symbols for erection on training areas.

7. The AN AO considers that there had been insufficient action taken by Defence to implement the remaining six priority recommendations (Recommendations 1, 6, 17, 25, 28(a) and 31), which had raised concerns regarding the corporate level management of training areas;

development of policy or procedural guidance regarding training area acquisitions, environmental management and security; the level of funding allocated for the repair and maintenance of training areas; and the rationalisation of the training estate having regard for those areas

with low utilisation.

8. To assist the Executive Government the Department of Finance in 1980 put in place a procedure for monitoring implementation of recommendations made in Auditor-General’s reports. Under this procedure, the Department of Finance receives quarterly reports from departments summarising progress made in implementing those

recommendations it has assessed as requiring follow-up action. (Formally, these reports are prepared by the responsible department and sent by the responsible Minister to the Minister for Finance.)

9. In the period since Audit Report N o.38 was tabled in June 1992 Finance, as a result of its assessment of the response provided by Defence to the original recommendations or of advice received in the

quarterly reports prepared by Defence, determined that no further reporting was necessary by Defence on 29 of the 40 recommendations with which Defence had agreed or agreed in principle. The ANAO, using its powers of access to Defence records in the course of this

follow-up audit, formed the opinion that Defence had not yet fully implemented eighteen of those 29 recommendations.

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Conclusion

10. Progress had been achieved toward the identification of Defence’s long-term training area requirements, and in developing an increased awareness of the need for an environmentally sustainable approach to the use and management o f training areas. The ANAO was also pleased to

note that Defence is now adopting a tri-service approach in addressing some of the issues highlighted in Report N o.38. This should assist in enabling the ongoing training area requirements of all three Services to be satisfied in a more efficient and effective manner.

11. However, continued or further action by Defence is necessary to address concerns raised in Report No.38 relating to a number of areas. These included the need for a more coordinated control of training areas at the corporate level of management, as well as completing development of the management information systems necessary to support efficient and effective management of the training estate; development of policy or procedural guidance regarding training area acquisitions, environmental

management and security; the regular review and rationalisation of training area assets; review of the level of funding allocated for training area repair and maintenance; and safety measures, particularly concerning UXO contamination on land not owned by the

Commonwealth. These concerns are raised throughout the body of this report.

Further action

12. The ANAO considers that further action in the areas highlighted in this report would assist in improving the efficiency and effectiveness of the management of Army training areas, and that the Department of Defence should implement those recommendations identified as requiring further action.

Follow-up audit

13. The follow-up audit did not seek to repeat the original audit but focused on evidence of activity undertaken by Defence to address the recommendations made in Report No.38. The audit fieldwork was conducted in Canberra. Audit matters were discussed with Defence

throughout the audit process, with the draft audit report being put to the Department in July 1994. The report was revised having regard to comments received in August 1994. The audit was carried out in conformance with ANAO Auditing Standards and cost approximately $35 000.

14. For the purposes of this report, the recommendations made in Report No.38 have been grouped under theme headings. The original recommendations addressed by each section of the report are quoted immediately before the relevant discussion, along with the departmental responses received in 1992.

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Management of Training Areas

Global management of training area operations

Recommendation 1 That training areas be managed at a corporate level.

Response in 1992 Agreed, noting that the ANAO Team considered corporate level in this context to mean Army Office level, and that management currently appropriately devolved continues.

1.1 Recommendation 1 urged that training areas be managed at a corporate level within Army, as it was considered that a lack of

corporate control had resulted in a fragmented approach to the collection and use of management information relating to training areas and an inconsistent implementation of policy and procedures.

1.2 The ANAO noted that in implementing a number of other

recommendations, both Army and the Facilities and Property Division of the Department (FP DIV) had commenced a number of projects which, when operational, have the potential to improve the effectiveness of the global management of training area operations. These included

completion of the valuation of all non-current assets and development of an estate management system and supporting asset management systems within the Services. Initial work had also begun on the development of a tri-service Defence Training Area Management Information System

(DTAMIS), which will incorporate utilisation, costing and environmental management information on training areas, and should assist in their corporate management. This project is discussed further in regard to Recommendation 10.

1.3 Activity being undertaken by Army Office at the time of audit did indicate an involvement at the corporate level in the ongoing management of the training estate. However, the ANAO considered this to be largely reactive in nature; that is, in response to specific events or circumstances

such as the Inquiry into the Shoalwater Bay Training Area (SWBTA) or in response to proposals for the development of training areas. Army Office also advised the ANAO that it may be required to conduct an assessment of existing training areas in support of the proposal to acquire a Northern Australia Training Area (ΝΑΤΑ). The ANAO noted,

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however, that there does not appear to have been adequate documentation of existing training area corporate management activity.

1.4 In recommending in Report No.38 that training areas be managed at a corporate level, the ANAO was proposing that a central point within Army take a proactive role in the regular monitoring and analysis of information and data regarding the training estate as a whole. This did not appear to have been implemented at the time of this follow-up audit.

1.5 The ANAO considers that Army needs to further develop training area management at the corporate level in order to ensure that the training estate is used in the most efficient and effective manner and to fully implement Recommendation 1.

Army property planning

Recommendation 2 That long-term user needs and specifications for the development of Army training areas be prepared. The specifications should state:

• the current and future requirement for training areas

• the basis on which to analyse the training area deficiencies and surpluses, and

• die basis on which to analyse Army’s national requirements for training areas, i.e. training areas which are not attributable to any particular Army base.

Response in 1992 Agree.

Recommendation 3 That subsequent to the development of user specifications, a training area requirement plan be produced which would allow priorities to be allocated for the acquisition, disposal and improvement of training areas. The training area priority plan would form the base document to accommodate changes in strategic guidance, unit locations, force structure, improved weapons systems and battlefield mobility.

Response in 1992 Agree. This plan would provide a generic document for on-going development to accommodate die changes listed.

1.6 Recommendations 2 and 3 of Report No.38 required the preparation of long-term user specifications and a training area requirement plan in

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order to improve Army’s ability to effectively plan its future training area requirements. The ANAO noted that since the original audit

considerable work has been done in this regard.

1.7 In June 1993 the Army Development Committee endorsed a submission on Army’s future basing requirements which provides a strategic plan against which current and future training area requirements can be assessed. It contains an analysis of long-term user needs, presenting options for future east coast basing, and identifying deficiencies in the capacity of existing barracks/range complexes to

effectively meet Army’s training requirements.

1.8 The recommendations of the submission have been taken up in Army’s strategic plan Army into the 21st Century which recognises that a commensurate change in the usage o f training areas will occur as Army shifts its centre of gravity north and increasing urban encroachment

places additional pressure on the use of training areas.

1.9 The ANAO considers Recommendations 2 and 3 to have been largely implemented. However, there should be regular monitoring of the plan provided in the Army future basing report in the light of changes in Defence priorities and funding and achievements against

stated needs.

Training area asset register

Recommendation 4 That:

• a Defence working party be formed to determine the data to be maintained on the asset management information system

• Australian Property Group expertise be utilised in developing an asset management system

• the asset management system be networked to District Support Units, and

• the system be user friendly so that it can be operated by personnel not

specifically trained in management information systems.

Response in 1992 Agreed, except that, with the untying from APG, that organisation will have to compete for any contract to develop an asset management information system.

1.10 Defence has made progress in the development of a comprehensive asset management system, as outlined in Recommendation 4. FP DIV

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completed the valuation of all non-current assets in June 1993, resulting in a complete asset database. As a result of a reorganisation of the division, asset management within Defence is to be undertaken at two levels. The Estate Manager within FP DIV will undertake a portfolio approach to the management of the Defence Estate, while day-to-day property and facilities management and operations will be devolved to the

base/unit level.

1.11 Australian Property Group (APG) was engaged to develop specifications for the implementation of estate management in Defence and in early 1994 commenced piloting the system at two locations. Defence considered that using APG on this project would also provide an opportunity to improve the transfer to it of the skills, knowledge and data held on Defence assets by the Department of Administrative Services

(DAS). Defence considered this transfer to have been inadequate during the recent untying process.

1.12 The Defence Estate Management System operated by FP DIV will not hold asset data at all levels. Rather, the program areas will be responsible for maintaining asset data and were, at the time of this follow-up audit, introducing office-based facilities management information systems. For example, the Army Works Information System for the day-to-day management of Army assets was due to be operational mid-1994. The Estate Manager will draw on data from these systems and the Defence Financial Management Information System, DEFMIS, which will include financial information on all Defence assets.

1.13 Both the Estate Management System and the program level asset management systems were in the early stages of implementation at the time of this audit, and may require further follow-up. The ANAO considers, however, that Defence was making satisfactory progress in the implementation of Recommendation 4.

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Training Area Acquisition and Leasing

Army Manual of Accommodation and Works

1.14 Report N o.38 identified deficiencies in Army’s Manual of Accommodation and Works (MAW), which laid down policies and procedures for the acquisition and management of facilities.

Recommendations were made for the updating or amendment of provisions in the MAW relating to:

• training area acquisition (Recommendation 5)

• training area repairs and maintenance (Recommendation 23), and

• Army policy on asset disposal (Recommendation 27).

1.15 Recommendations 5 and 27 had not been implemented at the time of this follow-up audit. However, as is discussed below in regard to training area repairs and maintenance, the ANAO accepts that Recommendation 23 had been adequately addressed by other means.

Recommendation 5 That the Army Manual of Accommodation and Works be rewritten to reflect current Defence policy on acquisitions, in particular that:

• reference be made to any training area requirement plan that is developed

• a full evaluation be carried out before purchase

• wherever possible measures be taken to safeguard the integrity of existing ADF training areas by acquiring sufficient tracts of land or buffer zones, and

• subject to the preceding points, that a long-term policy of acquisition of land on an opportunity basis be adopted in concert with a training area requirement plan.

Response in 1992 Agreed, noting that the Land Acquisitions Act can impose time restrictions on purchases which may conflict with evaluation processes prescribed by the Environmental Protection (Impact of Proposals) Act.

1.16 Army recognises that the MAW has been out of date for some years. The Directorate of Accommodation and Works - Army (DGAW-A) is to replace the MAW with an instruction which will

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provide only broad guidance on the management of assets. Policy guidance for the acquisition and disposal of assets will not be covered as DGAW-A, although previously responsible for all Army assets, no longer has responsibility in these areas. Asset management has been devolved to the Defence Centres and Base Administrative Support Centres (BASC).

1.17 Subsequent to the original audit, some policy guidance on the acquisition and disposal of assets was provided in the Defence Departmental Facilities Instruction 1/92 - Capital Facilities Proposal Development issued in October 1992. It is proposed that further policy

guidance on the acquisition and disposal of assets will be provided as part of the Estate Management System under development. The APG specifications for the implementation of estate management provide for the development of ‘Best Practice Notes’ which are intended to provide Defence establishments with a procedural benchmark, a process for linking other Defence manuals and procedures, and a training mechanism.

1.18 However, as stated earlier, at the time of this follow-up audit the Estate Management System was still in the early stages of development. Consequently, no planning documentation as to the issues to be addressed in such notes was available for review by the ANAO. It was noted that the APG specifications indicate tliat early development and distribution of the notes was considered integral to the implementation process.

1.19 The ANAO understands that the devolution of asset management may have resulted in some ambiguity regarding responsibility for Army assets. DGAW-A suggested that although they are no longer formally responsible for asset management, the BASCs still look to them for advice.

1.20 The Department should ensure that the policy matters listed in Recommendation 5 are included in any ‘best practice’ notes produced to provide guidance on facilities acquisitions, and that such guidance is promulgated in a timely manner. The ANAO also considers that, in order to ensure consistency, responsibility for providing guidance on Defence facilities and acquisitions policy should be clarified at the time of the issue of any such notes.

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Recommendation 27 That the Manual o f Accommodation and Works be amended to provide details of the property review process and the frequency with which it should occur.

Response in 1992 Agreed, but the frequency of review should arise out of the long-term planning process.

1.21 Recommendation 27 was based upon a finding that, although the MAW recognised the requirement for all property used by Army to be continually reviewed and declared surplus if no longer required, there was no policy on how the property review should occur or how often.

Defence also intends to address this recommendation through the planned ‘best practice’ notes referred to above. No other action to establish a policy on the property review and disposal process was identified.

1.22 The ANAO considers that Defence should take action to provide guidance to facilities managers on the property review process and the frequency with which it should occur. The Facilities Rationalisation Study provided a framework for current disposal action, but did not provide guidance for the ongoing and regular review of assets

to ensure the timely disposal of those which are surplus to requirements.

1.23 The ANAO considers that Defence should produce the guidance outlined in order to implement Recommendations 5 and 27.

Leasing of training areas ·

Recommendation 7 That:

• the annual review of leased training areas be more rigorous in order to

determine their cost-effectiveness and the correct balance between owned and leased training areas, and

• leasing options continue to be considered during deliberations of acquisition proposals.

Response in 1992 Agree. Army currently complies with these recommendations.

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1.24 Report No.38 recommended the continued consideration of leasing options during acquisition deliberations, but that existing training area leases be subjected to a more rigorous review before renewal. The suitability of leasing as a method of acquisition was considered in recent Defence submissions regarding the proposed Northern Australia Training Area. The ANAO also noted a recent instance in which the lease on a particular training area was not renewed due to diminished requirement

for its use. The ANAO considers that Defence has implemented Recommendation 7.

Evaluation of prospective training areas

Recommendation 6 That Army develop procedures which will ensure that before there is a commitment to training area acquisition, a proper evaluation, including a comprehensive reconnaissance, be conducted.

Response in 1992 Agree in principle.

Recommendation 32 That appropriate measures be introduced to allow the Department time to undertake a minimum level of environmental impact analysis prior to purchase.

Response in 1992 Not agreed. The time restrictions imposed by the Land Acquisitions Act, which can conflict with the time needed to implement the provisions of the Environmental Protection (Impact of Proposals) Act is an important issue, but not one particular to Defence. The Recommendation can only be implemented by DAS, which administers the Land Acquisitions Act.

ANAO Comment in 1992 The ANAO recognises the restrictions imposes by the legislation, but considers that the Department of Defence should attempt to resolve the difficulties with the Department of Administrative Services.

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1.25 Report N o.38 made two recommendations regarding the policy basis that should be in place to guide future training area acquisitions in order to ensure any land acquired is suitable for the intended purpose.

Evaluation and reconnaissance

1.26 Recommendation 6 required the development of procedures to ensure that a proper evaluation and reconnaissance is conducted before there is a commitment to training area acquisition. This recommendation was agreed to in principle by Defence.

1.27 As part of the monitoring procedures for the implementation of AN AO recommendations, each quarter the Department of Defence provides advice to the Minister for Defence regarding progress achieved in relation to outstanding recommendations. The Minister for Defence

then formally provides this advice to the Minister for Finance for assessment by the Department of Finance. In its May 1993 quarterly update advice, Defence said that the procedures referred to in

Recommendation 6 had been developed and were being followed. However, in conducting this follow-up audit the AN AO noted that no formal procedures had been set down or promulgated and does not consider Recommendation 6 to have been fully implemented.

1.28 Army now considers that since training area acquisitions do not occur very often, with each one being different in nature, formal procedures laid down in addition to existing legislation governing such acquisitions would be of limited value. It is the ANAO’s view that the very fact that such acquisitions do occur infrequently highlights the

necessity for a fully articulated set of procedures to guide the process.

1.29 The ANAO noted in Report No.38 that in the case of the Mount Bundey training area (MBTA) the prospective users of the area were not given an opportunity to conduct a comprehensive reconnaissance until after the purchase was completed. The risks associated with this approach have been highlighted by concerns expressed within Defence as

to the suitability of the property. The ANAO acknowledges that, more recently, Army appears to be conducting an extensive reconnaissance and evaluation along the lines recommended by the ANAO of potential sites for the ΝΑΤΑ. The ANAO remains of the opinion, however, that

appropriate procedures should be developed to ensure that a similar evaluation process is undertaken before all future acquisitions.

Environmental impact analysis

1.30 In Recommendation 32 the ANAO urged that appropriate measures be introduced to allow Defence time to undertake a minimum level of environmental analysis prior to the purchase of training areas. This recommendation was also prompted in part by the approach taken by

Defence to the MBTA acquisition, which was completed prior to the conduct of an Environmental Impact Study (EIS). The ANAO noted in Report No. 38 that although Army always intended to use the MBTA for environmentally significant activities, the stated reasons for purchasing

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the land did not require the conduct of an EIS under the Environment Protection (Impact of Proposals) Act (EPIP).

1.31 The ANAO was informed at that time that the reason for

purchasing the land on the grounds of ‘purposes which are not

environmentally significant’ was to expedite the purchase. It was noted that the acquisition of land for ‘environmentally significant purposes’ may be delayed for up to two years before the EIS process is complete, by which time the land may no longer be for sale. The Lands

Acquisition Act does not provide for the purchase of land by Defence before its EPIP Act obligations have been fully discharged. In Report N o.38 the ANAO considered that if difficulties exist due to the EPIP Act requirements delaying the acquisition process, procedures should be changed in consultation with relevant authorities to enable some expediency to be introduced into land acquisition while maintaining a minimum initial level of environmental impact analysis.

1.32 Although agreeing that this was an important issue, Defence did not agree with the recommendation, stating that the difficulties involved in the process were not matters Defence could deal with in isolation as they involved legislation it did not administer. The ANAO noted that in the quarterly update advices provided since Report No.38, Defence had said that it would be approaching DAS, which administers the Lands Acquisition Act, and the Australian Government Solicitor for discussions on die issue. The ANAO has subsequently been advised that no discussions have occurred since Report No.38 was tabled.

1.33 In conducting this follow-up audit, die ANAO noted internal Defence correspondence suggesting that the MBTA may not in fact be environmentally capable of sustaining the level of use intended by Army. This highlights the importance of ensuring that a minimum level of environmental impact analysis, at least sufficient to ensure the area is capable of supporting the intended type and extent of use, is carried out before acquisitions are made.

1.34 The intention of the recommendation was for appropriate measures to be introduced which would prevent this type of situation arising in the future should similar circumstances arise. For example, in Report No.38 the ANAO suggested the possibility of paying compensation to a land owner whose property is the subject of an EIS pending purchase by the Commonwealth. Introduction of such measures may involve discussions with other relevant departments. However, it is also the responsibility of Defence to ensure that its internal procedures preclude a similar approach to any future property acquisitions.

Impact assessment process

1.35 Under the Memorandum of Understanding between Defence and the Commonwealth Environmental Protection Agency on the application to Defence of the EPIP Act, it is Defence’s responsibility to determine in the first instance the degree of environmental impact assessment required to meet its responsibilities under the Act. Defence advised that all new

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property acquisitions are assessed initially to determine whether any significant environmental impacts may arise and whether, in its view, the property is fit for the intended purpose. A decision is then made as to whether the extent and sensitivity of those potential impacts may require

an EIS or a Public Environment Report (PER), in which case a Notice of Intention (NOI) is prepared. Thus, the onus for initial assessment of the significance of the likely environmental impacts of any activity or proposal rests with Defence. Guidance in making these assessments is provided in Defence Instruction (General) 40-1 Environment and Heritage

Protection. Departmental Facilities Instruction No 1/92 also now provides some policy guidance.

1.36 Defence advised that even if the identified environmental impacts of a proposed activity is such that an EIS or PER is required, these impacts are still manageable with appropriate project planning. The EIS or PER process will contribute to this. In the case of the MBTA

Defence complied with the requirements of the legislation and its own environmental guidelines, yet there have subsequently been some doubts raised as to its environmental suitability.

1.37 In regard to its latest training area acquisition, ΝΑΤΑ, Defence does appear to be acting to ensure that sufficient environmental analysis is conducted on potential sites prior to any commitment to purchase. The ANAO was concerned to note that a draft New Facilities Proposal for the

ΝΑΤΑ acquisition suggested that, in order to avoid delays which may affect the ability of Defence to acquire the property, the purchase should proceed before the full process of environmental impact studies was completed. However, Defence subsequently advised the ANAO that it

has, in fact, assumed at all stages of the project that given the size and location of the proposed training area, an NOI would be prepared and an EIS required. The ANAO understands that the Vice Chief of the Defence Force (VCDF) has directed that a fully documented

environmental assessment must be carried out before the purchase proceeds. However, it was also indicated to the ANAO that this is a risk management decision to be taken by Defence on a case-by-case basis.

1.38 Despite the approach being taken in regard to the ΝΑΤΑ

acquisition and the increasing focus on environmental management within Defence, however, the ANAO does not consider Recommendation 32 to have been fully implemented. The ANAO was unable to identify any action by Defence, either internally or in consultation with other relevant parties, to address the circumstances surrounding the MBTA acquisition

in order to ensure a similar situation may not occur in the future.

1.39 The ANAO remains of the view that Defence should implement Recommendations 6 and 32 in order to ensure that all training areas acquired in the future are appropriate for their intended purpose.

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Costing and Utilisation Data

1.40 In 1992 Report No.38 commented on deficiencies in the

information systems used in the management of training areas and made four recommendations for improvements in those systems. At the time of this follow-up audit Army was still in the preliminary stages of developing the recommended management information systems due to the delay involved in conducting its own study into the management of training areas to consider the ANAO recommendations.

Recommendation 10 That:

• Army develop and introduce a uniform booking system to all training area Range Controls. This system should be capable o f generating management information relating to the maintenance and analysis of utilisation data for all training areas, including statistics on unsuccessful bids

• a uniform booking sheet be developed by Army and included in Standing Orders, to ensure a consistent approach to range bookings and enable Army to collect comparable information for all training areas

• actual usage data be monitored and maintained including the number of tracked and wheeled vehicles, the number of troops and the user units unable to access the training area, and

• the utilisation information be collected and collated by Army Office and used to establish Army’s current and future training area needs.

Response in 1992 Agree. Implementation is subject to resourcing priority. It is intended to base development on the computerised booking system being trialled at Puckapunyal.

1.41 Recommendation 10 urged the development of a uniform booking system capable of providing comparable and comprehensive utilisation data on each training area. The report of the Army study supported the criticisms made in Report No.38 of the parallel development of alternative ‘range booking systems’ which had been occurring.

1.42 In October 1993 a formal trial was defined to bring into operation an Army Range Management and Booking Information System, with die final report due in May 1995. The first formal meeting of interested parties was held in November 1993 to discuss the macro-level factors

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affecting development of the system, such as die potential tri-service and FP DIV applications, including environmental and property management.

1.43 The ANAO did have some concerns regarding the capacity and utilisation initially proposed for the system; however, a number of these concerns have now been addressed by Defence. In order to ensure all requirements are met, it was decided that all three Services would be

involved in development of the system, to be known now as the Defence Training Area Management Information System (DTAMIS). Defence engaged a consultant to produce a system concept and a feasibility study was scheduled for completion by the end of 1994. At that stage die

Director-General Force Development - Joint was to take over from Army as project sponsor, reinforcing a tri-service approach.

1.44 It was initially envisaged that the system would operate on a stand­ alone basis, with utilisation data collected and used at the range control level. The ANAO was concerned that this approach did not appear to provide for use of the data at a corporate level in the analysis of training

area costs and utilisation, and of Army’s current and future training area needs. The ANAO noted that the Department’s Environment and Heritage section (DEH) had also expressed a need for an ability to access and extract data from the system.

1.45 After the field-work stage of this follow-up audit the project was re-evaluated by Defence, with the tri-service DTAMIS now proposed to be a hierarchical networked system which will allow for interface with FP DIV, including DEH, to enhance asset management. However, it

was not yet clear what form the communication channels with Army Office would take.

1.46 Development of the DTAMIS was in the early stages at the time of audit, and therefore Recommendation 10 may require further follow-up. The ANAO was advised that, in order to improve training area management in the interim, Defence would be purchasing eight

additional copies of the PC-based range management system currently operating at the Puckapunyal training area. Five were to be allocated to the BASCs controlling the Shoalwater Bay, Greenbank, Singleton, Holsworthy and Townsville training areas, as well as one each to the

Defence Centre in Perth, the Air Force training area at Delamere and to Navy at Beecroft.

1.47 Defence considers that this system will satisfy the interim booking and safety monitoring requirements of training areas. Other advantages expected to arise include the training of personnel in the use of such systems, as well as allowing for the gathering of data on training areas.

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Recommendation 8 That uniform training area costing data be captured and maintained for a period of not less titan three years to enable trends to be identified.

Response in 1992 Agree. Achievement o f this objective will depend on the availability of resources to undertake the task and its priority in relation to other Army projects requiring resource funding.

Recommendation 9 That:

more efficient systems for the uniform collection, maintenance and storage of costing data be developed and introduced to District Support Groups and Units (DSG/DSU). Any computerised system should be capable of providing relevant costing information for each training area under the DSG/DSU control and the system should be user friendly and capable of providing ad hoc reports on request, and

the costing information be regularly analysed by management at both the training area level and Army Office level, as part of an ongoing review of the operating costs associated with each training area in Australia.

Response in 1992 Agree.

1.48 Recommendations 8 and 9 required the collection, maintenance and regular analysis of costing information on training areas. Although little action had been taken regarding these recommendations in the period since the original audit, Army had identified the development of methodology for the collection of uniform costing data as a priority activity for 1994. No planning documentation regarding the task was available at the time of audit; however, the ANAO was subsequently advised that work had now commenced on the task. It is proposed that training area costs will be collected and reported through the DTAMIS system under development.

1.49 The Directorate of Costing and Financial Analysis - Army (DCFA- A), which is responsible for development of the cost data collection system, advised the ANAO that there was already a methodology in place for analysing the costs of one-off uses of training areas. This task, however, involves developing a system to provide for the regular collection, reporting and monitoring of all costs associated with training

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areas in order to provide the information necessary to assess their cost- effectiveness. The ANAO understands that DCFA-A will be

participating in the DTAMIS working party and will advise the consultant performing the concept evaluation exercise regarding the cost capture and reporting requirements of both local training area managers and Army Office. As noted above, development of the DTAMIS was still in its

early stages at die time of audit. Consequently, implementation of Recommendations 8 and 9 was not completed and may require further follow-up.

Recommendation 11 That Army review the costs and utilisation of the training estate on a regular basis. The ANAO considers dial a set of criteria needs to be developed to provide Army with a management tool to:

• highlight low utilisation of a training area

• compare the operating costs of all training areas

• enable Army to assess the costs and benefits of a training area, and

• enable Army to review options available in regard to the use of training areas.

Response in 1992 Agree.

1.50 Report No.38 emphasised the need for the regular collection of costing and utilisation data and for Army Office to collate and analyse that data as part of the ongoing management of the training estate at the corporate level. Recommendation 11 proposed that a set of criteria be

developed to provide Army with the tools necessary to usefully analyse training area utilisation and cost data.

1.51 Defence indicated in its quarterly update advices that this mechanism would be included in the development of a training area cost collection methodology which, as noted above, was yet to be completed at the time of this follow-up audit. The ANAO was unable to identify

any other action taken by Army to develop a set of criteria to assist in the analysis of costing and utilisation data. Given the proposal to provide for the regular reporting of training area data to Army Office through the DTAMIS system, the development of such criteria will be an important element in the meaningful analysis of training area cost-effectiveness.

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1.52 The ANAO considers that Army should complete its

implementation of Recommendations 8, 9, 10 and 11 in order to provide a more effective basis for the management of training areas.

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Day-to-Day Management of Training Areas

Organisation and staffing

Recommendation 12 That a review be conducted on the staffing levels of training areas to ensure that:

• positions for all training areas are determined on a consistent and appropriate basis, and

• a generic set of duty statements be established and that suitable classifications for support positions be determined.

Response in 1992 Agree. This is occurring as a consequence of the DRSR process.

1.53 Only limited work had been conducted in regard to this

recommendation in the period since Report No.38 was tabled. However, the ANAO was advised that subsequent to the completion of fieldwork for this follow-up audit, a review was undertaken and was substantially completed.

1.54 Manpower changes had been recommended on seventeen of 32 training areas, although there were apparently insufficient staff available for allocation to the new positions. Army also indicated that since the original audit there had been a review of all civilian

classifications as part of the Defence Regional Support Review (DRSR) process, with an increased use of civilian employees on training areas. Generic duty statements for a number of civilian positions had been developed, although the ANAO was advised that there was considerable

resistance to them from establishment managers who believed that duty statements for training areas needed to be specific to an area.

1.55 As the final report on the review of training area staffing levels was still in draft form at the time of audit, implementation of Recommendation 12 had not been completed.

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Policy and procedures

1.56 Report No. 38 made four recommendations relating to t

inconsistencies identified between the standing orders of a number of training areas. Although under review by Army, none had been implemented at the time of this follow-up audit.

Recommendation 13 That the common elements of training area standing orders be written and reviewed centrally to ensure that there is consistency between all standing orders on core matters. For specific local matters, individual training areas would develop their own discrete requirements.

Response in 1992 Agree.

Recommendation 14 That procedures be introduced whereby standing orders are processed and distributed electronically either on computer disk or via the Defence computer

network.

Response in 1992 .............

Agree. This information may be placed on the Defence Information Digest.

1.57 In Recommendations 13 and 14, the ANAO recommended the centralised preparation and electronic distribution of the core matters ■ included in the standing orders of all training areas. This was to eliminate inconsistencies between training area standing orders, reduce the duplication of effort involved in their review and to ensure the timely updating of standing orders at all training areas. The Army study of the

management of training areas supported this standardisation of common elements, suggesting that the recently revised Shoalwater Bay Training Area standing orders could provide a draft standard.

1.58 A review of all standing orders aimed at achieving this

standardisation was scheduled to commence in November 1993, with the final report due in July 1994. However, by mid-1994 Army had not yet been able to identify an available officer possessing suitable knowledge and background to undertake the project.

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1.59 The first stated objective of the review was to establish whether standardisation of range Standing Orders is necessary’. The AN AO was advised that this had been set as the first objective as Army was unsure whether any real benefits were likely to accrue from the task. It was

noted, however, that the recommendation to centrally prepare and review the common elements of standing orders was previously agreed to by Army both in its response to the original audit and in the conclusions of its own subsequent study into the management of Army training areas.

1.60 As was indicated in Report N o.38, the ANAO accepts that there are specific local matters for which each training area must develop its own discrete requirements. However, it is considered that matters such as safety and security procedures, which are addressed in the standing orders of all training areas, must be uniform, consistent and up-to-date.

It is the view of the ANAO that this would be best achieved through the centralised preparation and maintenance of the core elements of training area standing orders. Army has now agreed that there is some scope for the standardisation of training area standing orders and advised in the

June 1994 quarterly update advice that the review was underway.

1.61 In its November 1993 quarterly update advice Defence said that consideration was being given to the cost-effectiveness of processing and distributing standing orders electronically as proposed in

Recommendation 14.

1.62 The ANAO’s view is that Army should give full consideration to implementing Recommendations 13 and 14 through the central review and distribution of the common elements of standing orders. It is acknowledged, however, that these recommendations should be

implemented having regard to the cost-effectiveness of the proposal.

Recommendation 21 That standing orders for all training areas include a section on action to be taken in the event o f trespass onto training areas.

1.63 Report No.38 identified inconsistencies in the guidance provided in training area standing orders regarding trespass, with some areas providing no such guidance. Recommendation 21 proposed that the standing orders for all training areas include a section on action to be

taken in the event of trespass. Such a section is now included in the

Response in 1992 Agree.

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standing orders of the Shoal water Bay, Mt Stuart and Townsville training areas. However, guidance of this kind was still not included in the Majura or Holsworthy standing orders.

1.64 The original audit identified civilian trespass as a matter applicable to all training areas for which there should be consistency in the instructions included in all standing orders. Consequently, it is considered that Recommendation 21 should also be considered by the review of the common elements of training area standing orders referred to in the discussion regarding Recommendation 13.

Recommendation 42 That the following issues be addressed in the centralised preparation of standing orders:

• environmental matters, such as procedures relating to UXO should be included

• the requirement to designate impact areas, and to ensure that areas so

designated are clearly defined, and can be fenced-off when the need arises (e.g. if the training area is disposed of)

• the requirement tliat only Commonwealth-owned land be designated as high explosive impact areas, and

• the strict enforcement of the requirement to fire high explosive ordnance only into designated impact areas.

Response in 1992 Agree.

1.65 Recommendation 42 identified a number of environmental and safety issues related to the contamination of training areas with UXO which the ANAO considered should also be addressed in the centralised preparation of standing orders. The ANAO considered that this would assist the effectiveness of standing orders in helping to minimise UXO contamination.

1.66 In order to address the issues raised in Recommendation 42, Army initiated development of a policy document addressing the contamination of training areas with UXO. The ANAO was advised that the Army paper was now to be developed into a Defence policy, since all three

Services utilise training areas. Defence had also indicated in its quarterly update advices that this policy would be incorporated into the uniform common elements of training area standing orders to be developed in

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response to Recommendation 13. Neither the standardisation exercise nor development of the UXO policy was completed at the time of this follow-up audit, but both were due for completion later in 1994. Accordingly, implementation of Recommendation 42 had not been

completed at the time of audit.

Training area security and safety

Recommendation 15 That the Defence policy on security be finalised and issued at an early date.

Response in 1992 Agree.

Recommendation 17 That Army incorporate a tiered approach to security on the following basis:

• those parts of the training area that need protection from unauthorised access, such as buildings, fuel storage/motor vehicle garaging facilities, or other places where assets are stored, need to be protected by security measures described in the Army Protective Security Manual (suggested tier one)

• boundary areas (buffer zones) that contain no facilities but are contiguous to urban areas should have security measures which make it difficult for casual trespassers to enter the training area (suggested tier two), and

• those training areas remote from civilian populated areas need lesser security measures (suggested tier three).

Response in 1992 Agree in principle. The implementation of this Recommendation must be cognisant of all the factors. Expenditure should be commensurate with the threat in each case, and should be kept to a minimum to achieve cost-effectiveness. Fencing

without other high-cost methods of detection and reaction to incursions will have limited effect.

1.67 Recommendations 15 and 17 relate to the policy basis for training area security. Report No.38 found that Army did not have a specific policy on the security of training areas, but that a draft policy document on Defence security was being considered. Recommendation 15

proposed that the Defence policy on security be finalised and issued at an early date. At the time of this follow-up audit Defence was unable to

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provide the ANAO with any information as to whether the draft document had been issued. Defence had included no information regarding Recommendation 15 in any of its quarterly updates providing ' advice on progress in the implementation of audit recommendations. In the absence of any advice to the contrary, the ANAO must conclude that Recommendation 15 has not been implemented.

1.68 Although the recommendation was agreed to at the time o f the original audit, Army has subsequently noted that the basis for action against trespass is laid down in existing legislation regarding

Commonwealth property. It is the view of the ANAO, however, that this does not obviate the need for a separate policy on security. As is noted below in the discussion regarding Recommendation 16, since the original audit Army has established that trespass problems exist in regard to about 50% of training areas. The ANAO considers that a need still exists for policy guidance on security and that the Department should implement Recommendation 15.

1.69 Report No.38 also considered Army’s blanket approach to training area security to be inappropriate and in Recommendation 17 urged the incorporation of a tiered approach. The ANAO was advised that since that report Army had not performed any across-the-board review of the security measures required at training areas, and the ANAO could identify no other action by Army aimed at removing inconsistencies between training areas in the approach to security. Army considered

such inconsistencies a natural outcome of the devolution of training area management and advised the ANAO that the security of individual training areas was a complex issue which should be considered on a case- by-case basis in response to the nature of the trespass problem being experienced at each area.

1.70 The ANAO remains of the view that the adoption of a tiered approach to the security of training areas such as that outlined in Recommendation 17 would assist in improving the effectiveness of training area security. It is considered that Recommendation 17 should be implemented as part of a Defence policy on security. In August 1994 Defence advised the ANAO that action was being taken by Headquarters Logistic Command to implement the measures proposed in Recommendation 17.

1.71 The ANAO made several recommendations for improving the safety and security of training areas, particularly relating to the prevention of trespass. Army had implemented some of the measures recommended, but others remain outstanding.

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Recommendation 16 That for those training areas which are subject to regular trespass, plans be developed for the education of the local community of the dangers of unauthorised access to training areas.

Response in 1992 Agree.

1.72 Recommendation 16 has been implemented. After the original audit, Army conducted a survey of the extent of trespass occurring on training areas under its control which identified that minor trespass problems existed in about 50% of the areas. Actions such as media

advertisements, school visits and open days have been taken by each of those areas to alert the local community to the presence of the training areas and the dangers associated with trespass upon them due to UXO contamination. There have also been improvements in boundary

signposting.

Recommendation 18 That the quantity and quality of signposting of boundary fences be improved with the dangers explicitly portrayed and that signs either include international danger symbols or that consideration be given to the inclusion of appropriate non-English

languages.

Response in 1992 Agree.

1.73 In Report No.38, the ANAO considered that, given the risk of injury to the public posed by UXO, efforts should be made to improve the quantity and quality of the signposting used on training areas to alert the public to the dangers of trespass. In Recommendation 18 it was

suggested that the use of simplified, more explicit wording or

internationally recognised danger symbols would improve the level of awareness generated by the signs.

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1.74 The ANAO is aware that improvements have been made in the extent of signposting at a number of training areas. However, still only a very low percentage of warning signs include the use of standardised danger symbols, and these mainly relate to industrial and laser hazards. Defence Instruction (General) LOG 10-2, Management of Land Affected by Unexploded Ordnance, now requires the use of illustrative signs

warning of the dangers of UXO. Despite this, at the time of this follow­ up audit no signposts at the Singleton range used international danger symbols, although the procurement of such signs was under investigation

following an audit by the Australian Ordnance Council’s Explosives Safety Audit Group in November 1993. Holsworthy training area advised the ANAO that illustrative signs were expected to be erected there by the end of 1994.

1.75 The ANAO considers that, where appropriate for each training area, signs of adequate quantity and quality warning of the existence and dangers of UXO should be erected and maintained. It is considered that fully implementing Recommendation 18 with the use of international danger symbols would improve the effectiveness of the signs in alerting the public to the possible dangers of entering the area.

Recommendation 19 That:

• further consideration be given to implementing those recommendations of the Board o f Inquiry into the accident at Holsworthy which have not been implemented, and

• the lessons learnt from the incident be communicated to the other training areas.

Response in 1992 Agree. The cost implications of implementing some of these recommendations must be considered as they could become prohibitive and negate the value of the training area as such. In such cases training may have to be relocated to ensure

safety requirements are not breached.

1.76 Recommendation 19 related to the findings of a Board of Inquiry into a trespass incident at Holsworthy. The ANAO accepts that the costs associated with implementing the outstanding Board recommendations, such as for air surveillance of the training area, are prohibitive.

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However, given the seriousness of the incident at Holsworthy, the ANAO considered in Recommendation 19 that other training areas should be informed of the lessons learnt front the incident. Despite Army’s agreement with the recommendation, there does not appear to have been

any action taken to implement it.

1.77 During this follow-up audit the ANAO was advised that BASC Liverpool, which has responsibility for Holsworthy training area, is to prepare a report on what changes have been made to security

arrangements at that training area as a result of the Board of Inquiry recommendations. However, there does not appear to have been any coordinated dissemination to other training areas of the lessons learnt from the incident. Army suggested that the proposed DTAMIS system may provide a mechanism by which future range incidents could be communicated to other areas for consideration in the updating of their

standing orders. The ANAO considers that the second part of Recommendation 19 should be implemented, and that this should occur at the corporate management level within Army.

Recommendation 20 That consideration be given to the divestment of areas of land which are subject to regular trespass and which are neither useful for training nor as a buffer zone.

Response in 1992 Agreed, subject to consideration of issues such as safety to the public from contamination by unexploded ordnance. Army is currently negotiating with the NSW State Government about parts of Holsworthy Range.

1.78 Recommendation 20 urged Army to consider divestment of areas prone to regular trespass where they were useful neither for training nor as a buffer zone. The ANAO noted that Army has subsequently been negotiating with the State Government regarding the excision of a portion

of the Holsworthy training area for use as a shooting venue for the Sydney 2000 Olympics. The proposed site is located in an area particularly prone to trespass.

1.79 Although the ANAO is not aware of any coordinated consideration being given to the divestment of those areas subject to regular trespass, the original recommendation was largely directed at the parts of Holsworthy training area which were subject to chronic trespass

problems. This situation appears to have been addressed and, as no other areas have been identified as falling within the stated parameters, no further action is required in regard to Recommendation 20.

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Storage of ammunition on training areas

Recommendation 22 That Army investigate the possibility o f all Range Controls being able to store ammunition so that units can draw and return ammunition from Range Controls.

Response in 1992 Agree in principle, but to be subject to detailed evaluation. Some calibres and ammunition types may pose particular security and handling problems for example. In the context of providing overnight storage to facilitate early starts/late finishes, the Recommendation may offer particular advantages and obviate the waste it seeks to eradicate.

1.80 Recommendation 22 was directed at improving the efficiency and economy of live firing exercises and reducing ammunition wastage. An evaluation by Army of the economics, including the factor of

convenience, of implementing this recommendation was due for completion in July 1994 but had not yet commenced at the time of this follow-up audit. The ANAO noted that Recommendation 22 had been

implemented at the Pontville Rifle Range in Tasmania, with the construction of a magazine at the range. Army has, however, expressed doubts as to its viability on a wider scale, although consideration is being given to relocating the Mt Stuart ammunition store onto the new range at Dotswood in order to collocate it with the range control facilities to be constructed there.

1.81 The ANAO recognises that Recommendation 22 has the most utility in relation to the short-term storage of small arms ammunition requiring smaller facilities and fewer specialist staff. An evaluation of the viability of the storage of ammunition at training areas should be

done on a case-by-case basis, giving most consideration to training areas some distance from the nearest explosives storage depot. The ANAO considers that the evaluation referred to above should be completed in order to implement Recommendation 22.

Repairs and maintenance

1.82 Report No. 38 made four recommendations relating to the management of training area repairs and maintenance, of which three had been adequately addressed. Recommendation 25 did not appear to have been fully implemented.

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Recommendation 23 That the Manual o f Accommodation and Works be updated to describe repairs and maintenance procedures and requirements for the training estate.

Response in 1992 Agreed, although in conjunction with Recommendation 26, the need for conservation, environmental and heritage works to be separately funded is an issue for further consideration, and the appropriate instruction would be the Manual of

Environmental Policy and Procedures (Recommendation 31) and associated Land Management Plans for particular training areas.

1.83 Although Recommendation 23 had not been implemented in the terms described by Report No.38, Defence had taken other action to address the identified deficiency in the guidance provided on repairs and maintenance procedures for training areas. The draft Defence policy on

environmental management commits Defence to preparing Environmental Management Plans (EMP) for land it controls and manages. A completed EMP reviewed by the ANAO included a chapter on Repair and Restoration which provided guidance on repairs and maintenance

requirements and procedures for that training area.

1.84 To date Land Management Plans (LMP) or EMPs, an extended version of LMPs, have been completed in respect of eleven training areas, with a further eight in draft form. As is discussed further in regard to Recommendation 37, in its 1993 quarterly update advices

Defence said that the development of LMPs for major training areas would be completed within five years. The ANAO considers Recommendation 23 to have been adequately addressed.

Recommendation 24 That a process be put in place to identify and repair major erosion sites on training areas, such as those identified at the Samuel Hill airstrip.

Response in 1992 Agree.

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1.85 Recommendation 24 had been implemented with the appointment of environmental or land management officers to the Base Administrative Support Centres responsible for the major training areas. These officers are responsible for overseeing the 1 environmental management of both the training areas and other facilities within the control o f each BASC.

1.86 However, the AN AO was given conflicting advice as to whether Army Office or DEH, the Department’s environment and heritage section within Facilities and Property Division, had policy and technical control over these officers. The AN AO considers this confusion may be

indicative of the potential for problems to arise with the existence of separate environmental management structures within Army and FP DIV. Following fieldwork on this audit, the ANAO was advised that DEH and Army were seeking to reach formal agreement as to their respective responsibilities for environmental management. This issue is discussed further in relation to Recommendations 30 and 31.

Recommendation 25 That the level of funding allocated to the repair and maintenance o f training areas be reviewed.

Response in 1992 Agreed, although in conjunction with Recommendation 26, the need for conservation, environmental and heritage works to be separately funded is an issue for further consideration.

1.87 Although Recommendation 24 had been largely addressed with the appointment of environmental managers, in order to prevent major erosion problems it is also important that adequate funding is provided to enable the repairs and maintenance requirements identified by those officers to be carried out in a timely manner. Recommendation 25 proposed that the level of funding allocated for the repair and

maintenance of training areas be reviewed.

1.88 The ANAO noted that the corporate level of management within Army did seek to improve the level of repairs and maintenance funding being allocated to SWBTA, Army’s most frequently used training area. The ANAO was advised that additional funding was allocated to the area

following an internal Army report which indicated that the funding available for the repair and maintenance of SWBTA had been inadequate. The June 1993 report expressed concern regarding the minimal Facilities

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Operations funds which it appeared had been expended on such a significant range in the previous fifteen years. The report identified a number of works in need of attention, pointing out that many of the repair and maintenance tasks on the area were being conducted on an opportunity basis.

1.89 However, the ANAO was unable to identify evidence of any coordinated review by Army or the Department of the level of funding being allocated for the repair and maintenance of training areas. Army had made efforts toward reducing the impact of training activity on

training areas, with the planning for each activity now required to include an assessment of the likely impact, including environmental, on the area. The ANAO also noted that bids may now be made for separate funding for environmental, conservation and heritage works, such as the

implementation of LMPs, which may assist the environmental managers in preventing major damage to training areas. In addition, the

appointment of environmental officers will allow for more consistent technical input into the repairs and maintenance needs identified and bid for by each BASC.

1.90 It is not clear, however, that there is sufficient nexus between the identification of a likely impact from a training activity or the

identification of a repair or maintenance requirement by environmental officers, and provision of the funds necessary to carry out the required repairs and maintenance works. Although the problems identified at SWBTA appear to have been addressed, at least in the short term, the

funding mechanisms in place may not be adequate to ensure that a similar situation does not arise on training areas in the future.

1.91 The ANAO was advised that the proposed DTAMIS system may assist in the identification of repairs and maintenance requirements resulting from training activities. The expansion in the interim of the range management system currently in use at the Puckapunyal training

area to other major training areas may also assist in building up a database on the cost of repairs and maintenance.

1.92 Given the concerns expressed above, the ANAO considers that there should be a coordinated review of the level of funding allocated for the repair and maintenance of training areas in order to fully implement Recommendation 25. After completion of the follow-up

audit, the ANAO was advised that funding provided to date had been inadequate to address this recommendation. The ANAO considers that the provision of adequate levels of funding for the timely repair and maintenance of training areas will help to ensure that the safety, security and environmental sustainability of training areas is maintained, and that unnecessary expenditure in the long term is

avoided.

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Recommendation 26 That:

• consideration be given to providing a repairs and maintenance component within the training appropriation that would be used to repair damage caused to training areas by the training activity, and

• when the Air Force, the Navy and the armed forces of other nations use Army training areas, costs be recovered from the users and applied to the training area on which the activity was conducted.

Response in 1992 This is impractical. Three aspects impact:

• whilst the concept of a repair and maintenance component in training

appropriations is not agreed, there is a need for separate funding for

environmental, conservation and heritage works to give weight to Land Management Plan implementation. This is under consideration;

• training is not die sole cause for repairs and maintenance at ranges; flood, fire and drought can equally provide an imposition. Equally, these conditions can influence the impact of any damage caused directly by training activity making the allocation formula for funds associated with training unworkably complex and/or tying up resources unnecessarily; and

• there is a process for cost recovery from other Nations, however, the issue of routine cross-charging between Programs within the Portfolio is a matter for further consideration noting the Defence Training Estate is available for use by the Defence Forces. Significant or irresponsible damage can be considered on a case-by-case basis, but separate funding and programming are preferred to ensure that damage repair is timely.

1.93 Recommendation 26 was not agreed to by Defence and had not been implemented. Given the subsequent introduction by Defence of separate funding for environmental, conservation and heritage works, however, no further action is considered necessary in regard to the first part of Recommendation 26.

1.94 In the second part of Recommendation 26 the ANAO considered that there should be a mechanism by which costs associated with the use of a training area are recovered from users and applied to the

maintenance of that area. In conducting this follow-up audit, the ANAO was advised that costs were not recovered from Navy or Air Force as it was considered that they caused little damage. However, costs have been

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recovered from other nations, such as the Singapore Armed Forces, for the maintenance of training areas used by them. The ANAO considers no further action is necessary in regard to Recommendation 2 6 .

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Disposal of Training Areas

Property disposal

Recommendation 28 That:

• Army review its training area holdings in order to rationalise the training estate with particular reference to those training areas identified with low utilisation, and

• the Department of Defence consider providing an incentive to Army to monitor and rationalise its training areas by allowing Army to retain a portion of the funds realised from the disposal of land.

Response in 1992 Agree. Rationalisation is an outcome of the training area requirement plan. The increased pressure coming from a variety of encroachments is being balanced with the changing needs of Army for training areas. Defence policy already exists for Programs to generate savings and share in the proceeds. With a restructured Facilities and Property Division that incentive now rests with that Division.

1.95 The ANAO does not consider the first part of

Recommendation 28 to have been fully implemented. A proposed review by Headquarters Australian Defence Force (HQ ADF) of the rationalisation of training areas, which arose out of the 1992 Facilities Rationalisation Study, has been deferred until a database on training areas capable of informing such a review is developed. In Report No.38 the

ANAO made a number of recommendations directed toward addressing inadequacies in the management data available regarding training areas. As was discussed earlier, although action was being taken regarding those recommendations, development of the management information systems required had not been completed at the time of this follow-up audit.

1.96 The ANAO was advised that until the required information database was available, Defence considered that it would not be cost- effective to proceed with the HQ ADF review. In addition, it was considered that the review should await finalisation of the examination of

the requirement for training areas to support ADF elements in the north. The ANAO was advised that continued implementation of the Army Presence in the North (APIN) strategy will involve consideration of

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training area requirements, and that development of a Defence Force Capability Proposal for the acquisition of the proposed ΝΑΤΑ will require consideration of tri-service impacts and a review of existing training areas. As previously noted, Army Office had also considered

training area holdings in response to particular events such as the Inquiry into SWBTA or in response to development proposals for training areas.

1.97 The study of Army’s future basing requirements did identify Wide Bay training area as an area that could be disposed of given its

inadequacy to meet the requirements of units in the area, provided a replacement training area was available within economic reach of users. Although acknowledging that Army’s major field firing and manoeuvre areas adjacent to principal population centres are suffering varying

degrees of restrictions, the study concluded that the current Army barracks/range complexes and associated manoeuvre areas should be retained. Due to the loss of access to some areas such as state forests, the increasing urban pressures on other areas, and the potential

difficulties in acquiring new areas, Army considered that it needed to retain the training areas currently held. For example, Army proposes to retain Yampi training area despite its extremely low utilisation rate since acquisition and the fact that it had not been used at all for its intended purpose.

1.98 Of the training areas identified in Report No. 38 as having low utilisation rates, the Facilities Rationalisation Study did identify Sussex Inlet training area as a possible property release. Although a portion of the Yampi training area which is to be excised for incorporation into a

National Park was also identified, it was concluded that there was little pressure for or advantage in disposal of the training area as a whole. This is discussed further in regard to Recommendation 29.

1.99 Despite the processes described above, however, the ANAO could find little evidence of consideration being given to the utilisation rates of individual training areas in the context of the training estate as a whole in determining their potential for rationalisation. As noted previously,

Army is yet to complete development of a reliable and consistent system for collecting and monitoring such data. The ANAO considers that Army should ensure that the utilisation and costing data to be collected through the systems under development as a result of

Recommendations 9 and 10 is used in making informed judgments about the cost-effectiveness of and future need for individual training areas.

1.100 Recommendation 28 also proposed that the Department of Defence consider providing an incentive for Army to rationalise its training areas by allowing Army to retain a portion of the funds realised. Although there does not appear to be a specifically articulated policy

providing for such an incentive, the ANAO understands that a capacity does exist for Army to seek a portion of the proceeds expected from the sale of properties as additional funds to assist in developing alternative

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locations. The ANAO considers no further action is required in regard to the second part of Recommendation 28.

Yampi Training Area

Recommendation 29 That, in the absence of any specific proposals to use the Yampi training area, Army commence disposal action.

Response in 1992 Disagree. Disposal of ranges should not occur until the development of the training area requirement plan. Also it is noted that Yampi was an advance opportunity purchase, that there is no compelling reason to vacate, that the overheads are not significant, and that a Facilities Rationalisation Review currently being undertaken is considering the future of Yampi Training area.

1.101 Although Army did not agree with Recommendation 29, and has not implemented it, the ANAO remains of the view that Army should dispose of the area.

1.102 The arguments previously presented for its retention centred on the need to retain it until a suitable manoeuvre area for formation exercises in tire north, the ΝΑΤΑ, had been acquired. A draft New Facilities Proposal (NFP) for acquisition of a ΝΑΤΑ prepared by Land

Command in December 1993 considered Yampi unsuitable for the purpose due to its remoteness from Darwin, inaccessibility during the wet season, and the existence of two Aboriginal land claims affecting it.

1.103 Despite this, the NFP recommended its retention to provide alternative terrain for training and to allow sea access. Army advised the ANAO that disposal of the Yampi training area would not be considered until the ΝΑΤΑ had been acquired, as 2nd Cavalry Regiment had been

experiencing increasing difficulty in obtaining access to private property in the Northern Territory for manoeuvre training. The Mount Bundey training area, which was acquired for use by 2nd Cavalry Regiment, is not capable of meeting all of the regiment’s training requirements. In addition, 1st Armoured Regiment, which is scheduled to move north by

1996, will not have a training area available to it for at least two years and may have to use SWBTA. Therefore, Army argues that Yampi must be retained as an alternative training site at least until the ΝΑΤΑ is available for use.

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1.104 The AN AO noted, however, that against the criteria used to evaluate the potential locations for the ΝΑΤΑ, Yampi training area’s overall assessment was ‘poor’. Given the factors described above, the ANAO considers the likelihood of the area being used in the future (any

more than it has been in the past) to be poor also.

1.105 The ANAO also noted that the Singapore Armed Forces, which has used SWBTA for training exercises, recently indicated a reluctance to use Yampi as an alternative training site, preferring the eastern Australia training areas due to their superior infrastructure support and scope for

combined training.

1.106 The reluctance of other nations to use Yampi appears to reinforce the area’s lack of suitability as an Army training area. This was also the conclusion of the Army study of the ANAO’s recommendations, which noted that there were no current plans to use the area, even allowing for

the movement of units to the north, although the ANAO was

subsequently advised that one sub-unit level brigade exercise is planned for Yampi in the coming year. The study also suggested that future use of the area would require significant infrastructure development, given the difficulty of bare base operations highlighted by exercises

KANGAROO 89 and 92. Given its extreme remoteness, the study concluded that ‘... there are no compelling reasons for maintaining it’.

1.107 Based on available figures, Defence spends an average of $100 000 per annum on operating costs for the area. Therefore, the Yampi training area has consumed $1.5m since Defence acquired it in 1978 for $3m. This represents a significant outlay for such a rarely used

asset.

1.108 Army advised the ANAO that the ΝΑΤΑ working group would continue to consider the future of Yampi training area in its deliberations, and indicated that disposal of Yampi would be considered once the ΝΑΤΑ had been acquired. The ANAO is concerned that the use of

Yampi as an interim training area may result in UXO contamination, making any future disposal a more expensive and difficult process.

1.109 The ANAO remains of the view that Army should implement Recommendation 29 and commence action to dispose of the Yampi training area.

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Defence Environmental Management Processes

Environmental organisational responsibilities

Recommendation 30 That environmental management responsibilities within the Department of Defence be consolidated. The AN AO suggests that this consolidation could be effected by

the creation of a Defence environmental group comprising of both service and civilian personnel.

Response in 1992 Agree.

1.110 Since the original audit, structural changes have been made which consolidated both the civilian and Service environmental management responsibilities within FP DIV into its environment section, DEH. Therefore Recommendation 30 is considered to have been implemented. It is noted, however, that these changes did not achieve a consolidation of environmental management Defence-wide, with a new environmental management coordination position having subsequently been created within Army Office.

1.111 The ANAO is concerned that unless there is close liaison between the environmental management sections within the Department and Army, there may be duplication in the roles and activities fulfilled by each. In particular, the existence of separate environmental management

structures increases the potential for the duplication of policy

development effort.

1.112 As noted previously, at the time of this audit the two sections were seeking to reach formal agreement regarding their respective environmental management responsibilities and were intending to establish a committee to meet regularly with a view to avoiding duplication of effort.

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Environmental policy development

Recommendation 31 That the Department pursue the finalisation and release of a Departmental environmental policy and guidelines be consolidated into a single manual of environmental policy and procedures.

Response in 1992 Agree.

1.113 Recommendation 31 required Defence to complete and release its long-delayed comprehensive environmental policy in order to reduce the extent of dual policy and guideline development. Report N o.38 noted that in the absence of such a policy, which had been in draft form for

eight years, Army had developed its own draft land use policy document.

1.114 At the time of this follow-up audit, the Defence Instruction (General) on Environmental Management (DI(G) 40-2) was still in draft form. The ANAO was advised in May 1994 that DEH had identified the need to dedicate an officer to this task in order to issue the policy within

six months. Once released this policy would subsume the Army land use policy noted in the original audit, thereby achieving the consolidation recommended by the ANAO.

1.115 However, in June 1993 the Chief of the General Staff endorsed Army’s environmental strategy, since retitled as a policy. The ANAO was advised that in the absence of an endorsed departmental policy on environmental management, Army had perceived a need to develop an

Army policy to guide future planning and activities. Army indicated that the draft DI(G) 40-2 had not been considered in the drafting of its document.

1.116 Army was also developing an Army Environmental Management Plan 1993-95 to define the tasks required to achieve particular environmental objectives within the seven principal components of the Army environmental policy, allocate responsibility for carrying out each

task, and determine the level of funding available. Navy was also completing its ‘Total Environmental Plan’.

1.117 The ANAO appreciates the need for each Service to develop its own strategy to reflect broad environmental management policies in the maimer which best serves its specific needs. However, the ANAO is concerned that the Services are still proceeding with the development of

individual environmental strategies to guide future policy objectives

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without the benefit of, and in isolation from, an endorsed Departmental environmental policy. As there still appears to be a duplication of policy development effort occurring within Defence, the ANAO considers that Recommendation 31 should be implemented as a matter of priority.

Environmental management information systems

1.118 Report No. 38 made two recommendations relating to the development of environmental management information systems (MIS) within Defence. The ANAO does not consider the implementation of Recommendations 33 and 34 to have been completed.

Recommendation 33 That:

• system specifications be developed for an environmental management information system for use by all the major training areas, and

• the environmental management information system be complementary to and consistent with wider training area systems applications.

Response in 1992 Agree.

1.119 Recommendation 33 required the development of system specifications for an environmental MIS. As noted in regard to Recommendation 10, at the time of this follow-up audit preliminary work had begun on a proposed Defence Training Area Management Information System. Development of specifications for the

environmental management aspects of the MIS were scheduled to be addressed in phase two o f the project, the concept definition phase.

1.120 Recommendation 33 also stated that any environmental MIS should be complementary to and consistent with any wider training area systems applications. This requirement is to be addressed through the expansion of the scope of the proposed range management and booking system to include consideration of the environmental aspects of training area management and planning.

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Recommendation 34 That a comprehensive review of available systems be undertaken, taking into account appropriate environmental management information system specifications and that no further expenditure be incurred on any environmental management

systems or modules until the review has been completed.

Response in 1992 Agreed that a review be undertaken but that it be output-driven, not technology-of- GlS-system driven, because systems needs will vary between training areas. Disagree with the discontinuation o f pilot research projects, which are necessary to

trial the use o f the latest information management technology for in-house applications.

1.121 The evidence identified by the AN AO during this follow-up audit suggested that there had still been a somewhat fragmented approach to the planning for and development of environmental MIS within Defence. The ANAO is aware that until recently Army was proposing to purchase

the Environmental Resource Mapping System (E-RMS) software package for use by the environmental managers of major training areas. However, there did not appear to have been any discussion between Army and DEH regarding its suitability for environmental management.

DEH advised the ANAO that it had reviewed the system and was not convinced of its suitability. Army was not aware of this review.

1.122 The ANAO has now been advised that the interim training area MIS referred to in the discussion regarding Reconmiendation 10 will perform the required environmental management function.

Consequently, the E-RMS purchase will not proceed. Upon its completion, the DTAMIS system is intended to provide Defence with, among other functions, an environmental MIS. Therefore,

Recommendation 34 had been overtaken by the DTAMIS project.

1.123 As the DTAMIS was still in the preliminary stages of

development at the time of audit, Recommendations 33 and 34 were not considered to have been fully implemented and may require further follow-up.

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Environmental research

1.124 The ANAO made two recommendations to improve Defence’s management of the environmental research carried out on its behalf by external organisations. These had been implemented where appropriate.

Recommendation 35 That:

• the management of the Defence/CSIRO memorandum of understanding be at a higher level than Army in order to ensure that the MOU research is focused on the priority needs of the Department of Defence

• the administrative arrangements set out in the MOU be reviewed, any anomalies corrected and that the arrangements be monitored more closely.

Response in 1992 Agree.

1.125 The environmental research needs of all areas of Defence are now being considered in determining research priorities under the memorandum of understanding (MOU) with the Commonwealth Scientific and Industrial Research Organisation (CSIRO). The MOU is now managed by DEH and it appears that the administrative

arrangements are being more closely monitored. The ANAO considers Recommendation 35 to have been implemented. However, the ANAO also considers that Defence should continue to closely monitor progress against stated objectives and milestones, noting that DEH has expressed concern regarding the overall level of achievement on MOU tasks.

Recommendation 36 That, wherever possible, research projects should be offered to agencies on the basis of competitive tendering and that in cases where environmental research benefits the research agency as well as Defence, some formula be developed by which costs are shared.

Response in 1992 Agree.

1.126 Recommendation 36 proposed that, wherever possible, research projects be offered for competitive tender and that Defence seek to share costs where the research agency also benefits from environmental research. At the time of this follow-up audit, there were no research

projects available for competitive tendering and CSIRO was the only body carrying out environmental research for Defence. However, it was being proposed that future development of Land Management Plans, using base data developed by CSIRO under the terms of the MOU,

would be put out to competitive tender. As noted, Defence does appear to be more closely monitoring the conduct of environmental research, such as that performed under the MOU with CSIRO, in order to ensure that it is receiving value for money. Accordingly, no further action is

required in regard to Recommendation 36 at this time. However, the ANAO considers that Defence should continue to ensure that environmental research is carried out in the most cost-effective manner, with consideration given in future to offering research

projects to agencies on the basis of competitive tendering.

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Army Land Management Practices

Determining land use practices

Recommendation 37 That:

• Land Management Plans (LMP) for the major training areas should be completed as a priority

• a cyclical program be developed to update Environmental Impact Assessments (EIA) and LMPs

• regular ‘environmental’ audits be undertaken on the quality of LMPs and EIAs and compliance with LMPs, and

• the Department of Defence Facilities and Property Division and Army collaborate in the preparation of land management documentation by allocating suitably qualified staff to the task of coordinating and progressing the completion o f EIAs and LMPs.

Response in 1992 Agree.

1.127 The ANAO considers that implementation of Recommendation 37 was progressing satisfactorily. As was noted in the discussion regarding Recommendation 23, at the time of audit LMPs or EMPs had been completed in respect of eleven training areas, with a further eight in draft

form. In 1993 Defence said that the development of land management plans for major training areas would be completed within five years.

1.128 The ANAO reviewed the EMP for the Mount Bundey training area and noted that it included a requirement for environmental audits, with the implementation plan requiring ongoing assessment of the EMP through periodic review and audit programs. These audit provisions are in accordance with requirements proposed under the draft Defence environmental policy, DI(G) 40-2.

1.129 Both DEH and Army, through the recent appointment of scientific officers as environmental managers, are now involved in the preparation of LMPs for training areas. LMPs produced by Army environmental staff are subject to review by DEH, with formal review for all draft

LMPs and EMPs to be a requirement under DI(G) 40-2 once it is issued.

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The ANAO was also advised that Army had commenced a review of all LMPs.

1.130 Further follow-up of the completion of outstanding LMPs and Environmental Impact Assessments, and of the implementation of the environmental audit requirements, may be necessary.

Unexploded ordnance

1.131 Report N o.38 made five recommendations relating to the contamination of training areas with UXO, two of which Army had implemented. As noted with regard to Recommendation 42, after the original audit Army began developing a policy on the pollution of

training areas with UXO, which is now to be developed as a Defence policy. However, a draft of the paper was not yet available for review by the ANAO at the time of this follow-up audit.

Recommendation 38 That Army extend its use of:

• simulation of high explosive weapons firing, and

• alternative ammunition types to reduce the long-term hazard of unbeatable UXO.

Response in 1992 Agree. Army continues to introduce simulated weapons systems as the cost of full calibre live firings continues to increase. However, Army will always need to retain ranges for full calibre live firings.

1.132 The ANAO supports the continued exploitation of simulated weapons and sub-calibre devices as a means of reducing UXO contamination. As Army has an ongoing commitment to this, as outlined in its published strategic plan, the ANAO considers that no

further action is necessary on Recommendation 38.

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Recommendation 40 That the Stony Head impact area either be acquired by the Commonwealth or that its use for high explosive weapons firing be discontinued.

Response in 1992 Agree in principle.

Recommendation 41 That, with respect to the former impact area at Tianjara, steps be taken to erect fencing and appropriate signposting of the area.

Response in 1992 Agree. * 1

1.133 Recommendations 40 and 41 had not been implemented. The ANAO noted in Report No.38 that use of leased land for an impact area, as was the case with Stony Head training area, was contrary to Army’s , policy of containing impact areas to Commonwealth-owned land. In

addition, it was noted that the probable existence of UXO pollution would make the return of such an area to the State at some stage in the future difficult. At the time of this follow-up audit, Defence had not acquired the Stony Head impact area as proposed in Recommendation 40, despite agreeing with the recommendation in principle. Given that Army’s study of the management of training areas stated that Stony Head provided the only proximate range and field firing area for units in

northern Tasmania, implementation of the alternative recommendation of discontinuation of its use for high explosive weapons firing is unlikely. In discussions with the ANAO during this audit, FP DIV undertook to liaise with Army to initiate the acquisition. Accordingly, Recommendation 40 may require further follow-up.

1

1.134 The Tianjara training area was also identified by the ANAO as an example of UXO pollution occurring on land not owned by the |

Commonwealth. Recommendation 41 urged that steps be taken to erect fencing and appropriate signposting of the former impact area which was known to be contaminated with UXO.

1.135 Tianjara is no longer used as a Defence practice area and, apart from a small parcel o f Defence-owned land (which was not the impact area), is now included in tire Morton National Park and is subject to a NSW Wilderness Act nomination. The ANAO noted that in 1989 and again in 1992 Defence considered a 1988 site assessment which identified a need to fence and signpost the area polluted with UXO, but had

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concluded that the costs associated with such an undertaking were too high. Consequently, no action had been taken in regard to

Recommendation 41.

1.136 Defence advised the ANAO that, given the pending wilderness declaration, there were no plans to proceed with any fencing or

signposting of the impact area, as fencing would not be compatible with a wilderness area. It was indicated that although Defence accepts responsibility for clearing UXO as it is discovered, it also considers that the NSW National Parks and Wildlife Service (NPWS) is aware of the

existence of the UXO and had not required any further action from Defence.

1.137 The ANAO now accepts that the erection of fencing in the area is not appropriate. However, the ANAO understands that the public has access to areas in the former training area where UXO pollution is still being found and considers that Defence has a responsibility to the public

to place signposts at strategic entry points to indicate the existence of UXO. This responsibility will continue even if the area is declared a wilderness area, as there would still be access for walking.

1.138 The ANAO considers that Defence should liaise with NPWS to identify any publicly accessed tracks bordering the former impact area which may require signposting in order to implement the remaining element of Recommendation 41. It is also suggested that Defence liaise with the appropriate Commonwealth and State

mapping authorities in order to ensure that the former impact area is noted or highlighted on government-produced maps of the area.

Recommendation 39 That Army:

• does not create ‘temporary* impact areas, and

• ensures that designated impact areas are of the smallest practical size consistent with realistic training and the need to minimise UXO pollution of land.

Response in 1992 Agree. This is currently policy.

1.139 Army appears to be implementing Recommendation 39. A request from the Singapore Armed Forces to fire fused ammunition outside of the designated impact areas during its use of SWBTA in 1993 was denied due to concerns regarding UXO pollution, and restrictions to

49

the area’s future use and disposal options that would result. Army also indicated to the ANAO that it was recognised that an impact area policy needed to be in place prior to live firing commencing on the new Dotswood range. The Defence policy on UXO discussed in regard to Recommendation 42 is expected to provide guidance on impact areas and UXO contamination.

1.140 Although Army appeared to be implementing

Recommendation 39 in practice, further follow-up may be required of progress made in developing the proposed policy on UXO in order to ensure that it fully articulates the restrictions on impact areas recommended by the ANAO.

Environmental organisation staffing

Recommendation 43 That the proposal to attach scientific officers to the more significant training areas be examined.

Response in 1992 Agree. ·

1.141 Army had implemented Recommendation 43 with the appointment of scientific officers to oversee the environmental management of most of the significant training areas. The ANAO was advised that a proposal to appoint scientific officers was in train at the time of the original audit, but that the audit report had given it tne necessary impetus to be implemented.

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2. Preliminary Study Acquisition of Additional F - lll Aircraft

In early 1994 the ANAO conducted a preliminary study of the Department of Defence’s arrangements to purchase fifteen surplus F-111G long-range strike aircraft from the United States Air Force (USAF) to meet the expected attrition needs of tire Royal Australian Air Force’s (RAAF) fleet of 22 F-111C aircraft.

The study was begun in view of the parliamentary and public interest shown in the purchase since it was announced in 1992.

The preliminary work indicated that tire Department’s procedures to give effect to die Government’s decision to purchase the aircraft were satisfactory. The ANAO decided not to proceed with the audit. Set out below is die report of the study.

History of F - lll fleet

2.1 The RAAF’s fleet of F-111C aircraft was acquired in 1973 when 24 aircraft were acquired for the RAAF Strike/Reconnaissance Force. In 1979-80 four more were acquired to offset attrition losses. By 1992 the fleet had been reduced by peacetime attrition to 22. Each aircraft had

flown some 4800 hours and has a safe fatigue life of around 10 000 hours. Attrition was estimated at eight aircraft per 100 000 peacetime flying hours. The fleet has been undergoing a $400m avionics update

program (AUP) in the United States to ensure retention of the capability to the expected end of the aircraft’s life-of-type in 2010.

Decision to purchase aircraft

2.2 The purchase was initiated by the Minister who gave the first public indication of the intention to examine the purchase of the aircraft in September 1992 in reply to a question he received in Senate Estimates Committee B as to whether any consideration was being given to acquiring F - l l l aircraft from the USAF as spares for the RAAF fleet. The Minister said in reply that the matter had not been considered by Air

Force but that he had given it some thought and would be pursuing the matter when in the United States.1

2.3 Later, in October 1992, the Minister told the Senate that there had been a positive reaction from the United States to a proposal that Australia acquire additional F - l l l aircraft from among the approximately

ϊ Estimates Committee B Hansard 23 September 1992, p. B280.

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250 being taken out of service by the USAF. He said that since his return there had been further discussions within Government and that departmental officers would visit the United States to negotiate the purchase of up to eighteen aircraft. This would enable the RAAF fleet to be deployed beyond the current target year of 2010. It was intended at that time that the aircraft would be stored, upgraded and introduced into service as required to meet attrition or to extend the length of service of the fleet.2

Aircraft purchased

2.4 The F-111C variant, which is unique to the RAAF, could not be supplemented directly with USAF aircraft being taken out of service. Defence established a working group to consider the options available. In its comprehensive report the working group commented that the | existing fleet was likely to be reduced through attrition to fifteen aircraft

by the year 2005 and would probably not be flying in 2015 unless augmented by additional aircraft. The working group reported that the purchase of fifteen surplus F-111G aircraft would be the most cost- ' effective way of achieving the primary aim of extending the life of the RAAF fleet.

2.5 Defence then negotiated with the US authorities for a purchase to be made under the US Foreign Military Sales (FMS) program. The Minister obtained Cabinet approval for the purchase and in June 1993 amiounced that agreement had been reached with the United States for the purchase of fifteen surplus F-111G aircraft at a capital cost of approximately $A78m, which represented 20% of original cost. This amount would be supplemented to the Defence Budget by the

Government. He said the aircraft would be used primarily in an operational training role and that it was intended to rotate them through the flight line to enable the life of the fleet to be extended to 2020.

2.6 The Minister said that the acquisition meant that consideration of any replacement could be delayed by five to ten years. The ANAO noted that this may be an important factor for Defence, as current ; projections for major capital equipment investment show that a significant congestion in the requirement for capital funds is due to occur around 2010, die original life-of-type target for the F - l l l fleet. This projected expenditure includes the acquisition of replacements for existing tactical fighter aircraft, strike/reconnaissance aircraft, destroyers and armour.

Compatibility with existing aircraft

2.7 The F-111G variant was chosen by Defence from the surplus aircraft available as it offered digital avionics similar to that being fitted to the RAAF’s ‘C ’ model aircraft under the avionics update program. However, there are differences between the F-111C and F-111G variants, 1

1 Senate Hansard 15 October 1992, p. 1933.

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particularly in regard to the engines, flight control systems, and weapons deployment capabilities. Accordingly, some key support issues will need to be addressed.

2.8 An estimated $68m to be spent over the next few years on additional spares, logistics support and minor modifications was also included in the project’s approved funding o f approximately $144m. Included in that funding was provision for the fitting of digital flight control systems to

the F-111G aircraft, as well as a three year buy of unique spares for the F - l l l G ’s P-107 engine which is not interchangeable with the F - l l l C ’s P-103 engine. Additional funding from normal Air Force appropriations is being utilised to acquire life of type spares for the P-107 engine. The

working group reported that the USAF F - l l l fleet will probably standardise on the P-109 engine, possibly placing the RAAF in the position of supporting two unique F - l l l engine types. The RAAF is evaluating the feasibility of fitting the P-109 to both the ‘G’ and ‘C’

aircraft should the P-103/P-107 engines become difficult to support. If required, funding for the upgrading of F - l l l engines would be pursued separately through the normal force development process.

2.9 It has been recognised within Defence that the introduction into service of the F-111G will pose logistic support difficulties. Although there will be no increase in flying hours, there will be additional operating costs associated with the ‘G’ model due to the need to manage

additional ‘G’ unique spares and equipment and the need to conduct some initial maintenance in accordance with the USAF calendar-based maintenance philosophy. These additional costs have been estimated at $3m per annum.

2.10 Australia does not currently possess the software support capability required for the F-111G operational flight programs. As an interim measure, provision was made in the approved acquisition cost and original estimate of ongoing support requirements for the USAF to continue to provide this capability, with assistance from RAAF personnel. Air Force is examining the options available for life-of-type

software support for the ‘G’ model and this arrangement may be reviewed after the establishment of a Weapons System Support Facility at RAAF Base Amberley in Queensland. That facility, which has been developed for the ‘C’ model post-AUP, is expected to be operational in

late 1995.

2.11 The ANAO noted that discussions had also occurred within Defence regarding potential difficulties in providing adequate F - l l l trained service personnel. The ANAO was advised that a temporary increase in manpower had been approved to support the introduction into

service of the first four F-111G aircraft and that Air Force will manage the personnel required to sustain operations in the context of its total constrained establishment and the Chief of the Defence Force’s (CDF) Preparedness Directive.

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Use of new aircraft

2.12 Assessments by Defence determined that in order to achieve the extended life-of-type proposed by the Minister in the most cost-effective manner it would be necessary to operate at least some of the newly acquired aircraft rather than store them until required to meet attrition losses. However, approved flying hours and aircrew establishment were not to be increased. The working group found that the life extension . achieved will depend more on die number of aircraft rotated through the , operational fleet than on the number acquired. However, it was also

suggested that a continuing issue in regard to achievement of a ten-year extension in the life-of-type of the RAAF’s fleet may be the continued operation of the F - l l l by the USAF.

2.13 It is intended that two of the additional F-111G aircraft will be [ cannibalised for spares with the remaining thirteen rotated through the flight line, thereby achieving a reduction in flying hours by the existing | ‘C* models. As noted above, there are differences between the F-111C

and F-111G variants in terms of weapons deployment capabilities. The/ ‘G’ model aircraft are not fitted with the Pave Tack precision weapon delivery system which guides the Harpoon air-to-surface and AIM-9 air-1 to-air missiles. As available funds will be inadequate to achieve commonality across the fleet, the role to be fulfilled by the F-111G aircraft will necessarily differ from that of the PaveTack/Guided Weapons System-equipped F -lllC s . This will require careful

management by Defence in order to ensure that F-111C aircraft in storage at any time due to the rotation of aircraft through the flight line are recoverable within a period of time which will ensure preparedness r requirements are satisfied. )

2.14 Defence also determined that a minimum of four F-111G aircraft must be operated at any one time as numbers below this introduced major inefficiencies. The AN AO noted that in January 1994 it appeared that introduction into service of the F-111G could be delayed by servicing requirements and manpower constraints. As a result, it was expected I that only one F-111G aircraft would be available by mid-1995, with one more becoming available each year thereafter. As noted above, however, a temporary increase in service manpower levels has since been approved and it is now expected that a Flight of three to four aircraft will be operational by mid-1995 using the USAF maintenance philosophy. A Flight of four F-111G aircraft will be maintained until the F-111C avionics update program is completed in 1997, when the number of operational aircraft will increase to six. This core number will allow storage of some F-111C aircraft to achieve the desired life extension of the fleet.

Management of the purchase

2.15 The preliminary work conducted by the ANAO indicated that Defence appears to have attempted to obtain the additional aircraft and related support capabilities at the lowest possible cost. Delivery was

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sought after the aircraft had been declared surplus by the USAF, but before they had been inducted into long-term storage, thereby avoiding significant costs in retrieving the aircraft from storage. In November 1992 Defence requested that the USAF suspend disposal action on all

F-111G unique spares until the RAAF had assessed its spares

requirements. It was recognised in April 1993 that the USAF was disposing of surplus F - l l l spare parts at auction and that Air Force should be moving to secure those spares it required at low cost, although it appears that a delay in developing procedures to permit purchase of

these spares at auction may have initially reduced its capacity to take advantage of these opportunities. Since that time Air Force appears to have been striving to manage the acquisition of spares for the ‘G’ model in order to achieve the lowest price while balancing the risk of support

items being lost through early disposal by the USAF.

2.16 The ANAO was informed that RAAF pilots had now flown the aircraft from the United States to Australia, with the last one arriving in May 1994, and that they are in good order and based at RAAF Base Amberley. There are no offsets obligations under FMS purchases,

although there could be some minor opportunities for Australian industry.

2.17 The preliminary study was conducted in Canberra earlier this year and cost approximately $31 000.

13 October 1994 Canberra ACT

J C Taylor Auditor-General

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Series titles Titles published in the financial year 1994-95

Audit Report No. 1 Project Audit Commonwealth Scientific and Industrial Research Organisation - Follow-up of an Efficiency Audit of External Funds Generation

Tabled 24 August 1994

Audit Report No.2 Department of Defence Follow-up Audit Management of Army Training Areas Preliminary Study Acquisition of Additional F - l ll Aircraft

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