ACI Conference 2005

Australian Defence Department MSD Financial Reform Strategy

1 Introduction

The MSD requires (MSD Financial Reform 2005/06 Brochure – DPS SEP018/05) that financial and asset management be carried out:

	to approved standards
	by competent and authorised people, and
	using authorised processes.

Some of the legislation that governs these requirements includes:

Legislation:

Australian Constitution

Financial Management & Accountability Act (FMA ACT)

DMO Chief Executive Instructions (CEIs)

DMO Manual of Financial Delegations

DMO Accounting Policy Manual

Defence Procurement Policy Manual

DMO Financial Instructions

Regulations:

Dl(G) LOG 08-18 Rapid Acquisition of Capability

Dl(G) LOG 04-3 Australian Defence Force Logistics Manager roles and responsibilities

Navy Technical Regulations Manual

Dl(G) LOG 08-16 Defence Policy on Codification

DI(N) LOG 47-3 Navy Technical Regulation

Governance Activity Statements

To save you time, you can find many hotlinks to these documents at HOTLINKS.

These regulations affect those involved in:

	immediate, medium and long term accountability, accounting and quality assurance
	the development of strategies, policies, processes and procedures
	material misstatement of financial information
	breach of legislative and accounting requirements
	establishment and maintenance of internal controls and systems
	compliance with legislative requirements
	system deficiencies

In particular, it will affect those involved in:

analytical reviews

impairment reviews

classification of AUC Enhancements

accounting for:

supplier invoices

expenditure on design between 2nd pass approval and prime contracts

overpayment to suppliers

materiality for the due diligence sign-offs

commitments

expenditure classifications

capitalisation thresholds

More information about these tasks is available in the Governance/Financial Guidance section at http://intranet.defence.gov.au/dmo/Sites/MSD

They will affect the following MSD departments:

	ANZAC SPO
	FFG SPO
	AAS SPO
	MSS BHQ
	MCD SPO
	PB SF0
	HYDRO SF0
	PPB SPO
	DMCP-N
	COL SPO
	SMCS SPO
	MR SPO
	DLMG
	CME
	DJFLA
	D D&MA

2 What are the problems and challenges we will face?

Reality one: Research shows that the Financial Reform Regulations are written in complex confusing language that most people have difficulty understanding and complying with. This includes your staff, suppliers, contractors, lawyers, translators and consultants.

Reality two: There are unnecessary costs for not complying and ‘ignorance’ is no excuse in the eyes of the law.

Reality three: There is a simple system that will help your people ensure:

	they understand what is required
	they can check that they complied and
	they can check that their suppliers, contractors, lawyers, translators and consultants complied.

This system is called Mustor Management and is governed by the MIS 10 000 standard.

At the 2005 International Plain Legal Language Conference in Washington DC , the conference summary speaker Mr Christopher Balmford, described Mustor Management as “the most exciting development in our field at the moment”.

This system will make it easier for your people to:

	negotiate obligations, offers and counter offers
	identify and compare choices
	compare changed clauses with original ones
	compare clauses between documents
	plan, program and cost compliance
	check and audit compliance
	analyse workflow requirements and develop procedures
	prepare flowcharts, procedures, action plans and programs (timelines, Gantt/PERT charts)
	make and review compensation claims
	complete prescribed notices and
	translate requirements into other languages.

Savvy employers can reduce their risks and increase their staff's productivity, by enrolling their staff in the Mustor Management Masterclass.