## 2008/11/30

### Finance, FMAA & ANAO and Good Management: Never any excuse for repeating known errors

In light of the Sir Peter Gershon's Review of the Australian Government’s use of Information and Communication Technology, here's an email I sent to Lindsay Tanner (Finance Minister) prior to the 24-Nov-07 election of the Rudd ALP government. Edited lightly, formatting only.

Date: Sun, 11 Nov 2007 15:02:40 +1100From: steve jenkin To:  lindsay.tanner.mp@aph.gov.auSubject: Finance, FMAA & ANAO - Good Management: Never any excuse for repeating known errors

Here is something very powerful, but simple to implement & run, to amplify your proposed review of government operations and can be used to gain a real advantage over the conservative parties. On 8-Nov I wrote a version via the ALP website.

The Libs talk about being Good Managers, but they have been asleep at the wheel for the last 10+ years.

It's not "efficient, effective or ethical" to allow public money to be wasted by repeating known mistakes.

Nothing new needs to be enacted - only the political will to demand Good Governance from bureaucrats and the 'ticker' to follow through.

In the 60yrs since WWII, how many defence purchases and projects have been abandoned, failed or over-run??

What about other large, important projects?
[Nobody has a list or a number. That in itself is a failure.]

If managers within the public service were properly held to account, how could there be so many 'surprises' still?
The situation is so dire, that there isn't even a list of what projects are currently underway, let alone their outcomes.

There is a simple, direct solution to solving the lack of Good Governance perpetrated by the Howard Government:
• direct consequences for managers repeating known errors, and
• Lessons Learned (good & bad) documented for all large projects and demanded on all later projects.
This works spectacularly well for Aviation [ATSB + CASA].
For the whole of Federal Government it would be ANAO + Finance (FMAA).

There is every reason to differentiate your administration from the laissez-faire approach to Governance of the current 'conservatives'. And it's both cheap and effective.

The Sea Sprite is a current debacle, the Collins class submarines were recent. The new RAAF aircraft is an unfolding drama. The Army had bad press over gear & boots not performing. But it isn't just Defence, it's endemic.

And the ANAO is aware - but is powerless to enforce change, only gently encourage.

Joe Hockey, when at Centrelink, had conniptions over the 'EDGE project' firstly failing, then no manager being accountable.
His 20-Apr-2005 press club speech contains:
The Auditor-General’s report released last week into the failed EDGE project in Centrelink indicates an urgent need for increased and more careful management attention to major projects. I expect constant vigilance and clear governance structures.
But after all the hot air, soul searching and endless consultants reports what is different? Where is the on-going change?

The Auditor General address to the Institute of Project Management on 7-October-2007 mentions just a few projects of interest (on the front page of ):
• 1979 - JCPA review of the cancelled MANDATA
• 1983 - Audit report on Defence major capital acquisitions
• 2005 - Centrelink EDGE project
• 2005 - Defence PMKeyS Project
• 2006 - Customs ISS review
• 2007 - Defence HF Comms Systems Modernisation Project
Balanced with two only shining examples of successes:
• 2000 - Construction of the National Museum of Australia
• 2004 - Defence acquisition of ‘Wedgetail’ Airborne Early Warning and Control Aircraft
The ANAO address talks of 'Good Leadership' and 'A culture of discipline' to solve Project Management problems - and annunciates clearly that Senior public sector managers are not 'asking the right questions' - but the only remedy suggested is more training and guidelines.

Clearly is that was effective, it would've worked 30 years on from the MANDATA report.

A 2005 KPMG project management survey is quoted as saying:
• Govern to achieve,
• Hold to account
And a lot of theory, reporting, process and causes are mentioned including the new Finance 'Gateway Review Process' - but it entirely misses the mark, the important practices of the Aviation industry are:
• independent, detailed 'root cause' analysis of all incidents - applicable across the entire jurisdiction
• strict accountability for all incidents, not just obvious accidents, by the enforcement/regulation agency
In the 1994 an important study by researchers at Warwick Business School of firms in New Zealand found the single predictor of high-performing IT departments(*):
• Lessons Learned (good & bad) - documented and acted upon.
That's simple, cheap and effective.
And you'd think it would be obvious Good Management...

The ANAO Poject Management comments, while true up to a point, will cost a huge amount to implement, will entail massive reporting & Governance costs and will only further entrench the current practices:
• there are never serious personal consequences for underperforming public service managers such as discipline, demotion or even firing.
The managers responsible for the whole chain of disasters cited by the Auditor General, and many more, are teflon-coated.
Nothing in the current ANAO proposals & programs changes the one thing that will cause real change: Personal Accountability.

The ANAO paper confuses:
• Outcomes with Process
• Reporting with Responsibility
• Accountability and Assessment
As Finance Minister you can cause fundamental change in the public service by a radical cultural change that the bureaucrats cannot gainsay nor counter:

• require every 'Gateway' project to lodge a Lessons Learned statement.
• require a detailed "root cause" analysis, with remedial actions, for every failed/over-run project
• via the FMAA, enact direct, personal consequences for those repeating known errors or failing to act on documented "Lessons Learned."
• this needs to include firing senior Public Service managers, and
• excluding companies and certain employees for any future government work.
To counter the problem of "mates rates", the FMAA review panel needs to be handled like ASIC:
• external to the object of examination,
• staffed by 'outsiders', and
• limited tenure for those enacting outcomes.
A side effect is that it gives 'whistle blowers' a safe, legal and legitimate place to make their reports.
Currently their only option outside the department is the media - which only makes bureaucrats defensive and causes embarrassment for their political masters.

This is simple and obvious "Good Management".
It is entirely within the powers of the FMAA, and a very strong point of distinction between your government and the current conservatives who've had 10+ years of not promoting Good Governance.

It fits in with, and amplifies, your proposed review of the Public Service.

The direct political benefit to the elected members and ministers is:
• Ministers can legitimately divorce themselves from bureaucratic stuff-ups,
• Embarrassing projects can avoid the media and be handled internally - and the investigation turned into a positive.
• The government can reliably & credibly promise to the electorate:
• That won't happen again", and
• "If anyone does that again, heads will roll".
• Ministers won't normally fire or demote underperforming managers, but the FMAA bureau would - improving the relationship and trust between departments and ministers.

(*) Martin, A. and M. Chan (1996). Information Systems Project Redefinition in New Zealand: Will We Ever Learn? Australian Computer Journal, 28 (1)