Background

The Australian Customs Service (Customs) is responsible for managing the integrity of Australia's border. The Australian maritime border is the 200 nautical mile Exclusive Economic Zone (EEZ) around Australia's 37 000 kilometre coastline. Customs provides a Civil Maritime Surveillance and Response program to detect, report and respond to potential or actual violations of Australian and international laws. Coastwatch manages and coordinates this program, using a combination of Customs' seagoing vessels, contracted aircraft, and Australian Defence Force (ADF) vessels and aircraft.

The National Marine Unit (NMU) contributes to the Civil Maritime Surveillance and Response program. It has eight 35-metre Bay-class vessels (known as Australian Customs Vessels or ACVs) that are capable of maintaining a strategic presence around the Australian coast. NMU patrols operate within, and sometimes beyond, Australia's EEZ. Joint patrols may also be conducted within the territorial seas of neighbouring countries. The NMU undertakes strategic, tactical and standing taskings, which may include:

• information and intelligence gathering;
• intercepting vessels suspected of carrying illegal entrants, drugs and other prohibited or restricted goods;
• intercepting suspect illegal fishing vessels; assisting with search and rescue; checking on environmental pollution; and
• assisting with park management of offshore nature reserves.¹

Audit objective and scope

The objective of the audit was to examine the administrative effectiveness of the NMU's surveillance and response operations. Particular emphasis was given to the following areas:

• strategic and tactical taskings;
• crew operations;
• crew training;
• asset management; and
• governance arrangements.

Audit findings and conclusion NMU's tasking process - Chapter 2

The NMU undertakes strategic, tactical and standing taskings. Strategic taskings are planned, general in nature, and identified as part of a three-month forward planning cycle. Standing taskings are completed for clients on an opportunity basis as part of routine strategic patrols. Tactical taskings are based on specific incidents or events that require an immediate Customs or client agency response to a breach, or alleged breach, of the Australian border. Tactical taskings always take precedence over strategic and standing taskings.

Client agencies

The NMU undertakes taskings for Commonwealth, State and Local government agencies and internal Customs' clients. The ANAO had discussions with a number of the NMU's client agencies. All advised that they are more than satisfied with the services provided by the NMU. The Great Barrier Reef Marine Park Authority (GBRMPA) and the Department of Environment and Heritage (DEH) advised that strategic and standing tasking requests will increase as GBRMPA is required to protect more areas of the Great Barrier Reef² and DEH's marine areas of control increase.

Tactical taskings

The Coastwatch National Surveillance Centre coordinates tactical response operations on behalf of client agencies. Customs' Enforcement Operations Coordination Unit (Enforcement Operations) is responsible for coordinating a Customs' response to any breach or alleged breach of Australia's border. This may involve a Customs-only, or a joint or multi-agency, response with other law enforcement agencies.

The ANAO considers that there are adequate systems and processes within Customs, Coastwatch and the NMU to coordinate and undertake an effective response to the tactical taskings requested by client agencies. The NMU, Enforcement Operations and Coastwatch have documented and implemented procedures for officers initiating and undertaking tactical taskings.

Strategic and standing taskings

The NMU receives strategic and standing tasking requests directly from client agencies and Customs' Enforcement Operations.³ The NMU considers all tasking requests received in the context of operational priorities and fleet availability. The NMU does not prioritise or assess taskings against any specific documented criteria. Consideration is given to factors such as Government and Customs' priorities, NMU maintenance and training requirements, seasonal trends, weather patterns and the timeframes in which the task can be completed. The NMU advises that, to date, it has generally been able to accommodate clients' tasking requests. However, tasking requests may conflict in the future as Customs continues to commit resources to Operation Eddington,⁴ and DEH and GBRMPA increase their marine areas of control.

The ANAO considers that using the results of Coastwatch's Common Risk Assessment Methodology (CRAM) would help the NMU to address possible conflicts between agencies' taskings. The process would also provide a more rigorous basis for assessing the relative importance and urgency of requests. The majority of the NMU's client agencies have already completed a risk assessment of their tasking threats and geographical areas as part of this methodology. As well, NMU patrols operate within the same geographical areas.

The ANAO found that the NMU has implemented adequate systems and processes for planning, completing and reporting strategic and standing taskings requests. The ANAO considers that these processes could be improved if the NMU were able to use the Coastwatch Command Support System (CWCSS) to automate tasking requests and reporting processes. Currently, a number of key client agencies have, or are in the process of acquiring, access to CWCSS. Clients are able to submit tasking requests electronically; monitor the progress of tasks; receive reports on the outcome of their tasking requests; and view information that is of relevance to them.

Intelligence capability

The NMU does not have its own intelligence capability. The Unit relies on Customs' Risk Identification and Intelligence Branch, Enforcement Operations, client agencies and the Coastwatch Analysis Unit as its primary sources of intelligence. Currently, very little intelligence is received from, or provided to, the NMU or ACV crews. An effective intelligence capability requires a two-way exchange of information between the NMU and its intelligence sources. To facilitate this exchange of information, the ANAO considers that the NMU should assign an officer the role of intelligence liaison. This officer would be a point of contact within the NMU and could routinely liaise with, and disseminate information to, all relevant intelligence sources within and outside Customs.

Crew operations - Chapter 3

It is important that seagoing officers rostered to ACVs hold current qualifications and certificates as required by the Uniform Shipping Laws Code (USLC).⁵ Without these qualifications, NMU crews would not be able to lawfully operate the ACVs in Australian waters. Minimum crewing requirements for the ACVs must also be maintained.

Developing and maintaining crew rosters

Preparing and maintaining crew rosters is complex because of the numerous factors that must be taken into account. Currently, the NMU uses five data sources to prepare rosters. The manual processes involved increase the risk of error and reduce the NMU's ability to consider all factors when preparing rosters. The ANAO found that the spreadsheets and database containing the information used to develop crew rosters are not integrated, resulting in data duplication and redundancy. Also, the current systems do not allow the NMU to retain historical data, making it difficult to analyse trends or undertake performance reviews.

The ANAO considers that the increase in crew numbers, and the need for two roster cycles covering different conditions of service, will compound existing problems.⁶ The NMU recognises the limitations of the systems and processes it uses to develop and maintain crew rosters and views them as a serious concern. It is taking steps to develop and implement a new integrated rostering system. The ANAO considers it is important that the new system integrates all data sources across the NMU that influence ACV patrols and crew rosters. A business case outlining options for leasing or purchasing should be prepared so that the decision to lease/purchase is based on sound analysis. This should also provide assurance that any new system meets the NMU's business needs.

The need for an improved and flexible rostering system is well demonstrated by Operation Rushcutter, the recent Southern Ocean patrol. This operation had a significant impact on rosters over a period of many months in 2003. Maintaining sufficient crew availability for routine patrols required a tightening of crew leave, a reduction in non¬essential training from February to October 2003, and the rescheduling of several maintenance periods. The NMU advised that it was unable to crew four patrols during June and July 2003 because of this operation, as well as illness and injury to other crewmembers.

Onboard verification of qualifications and certificates

As previously noted, seagoing officers rostered to ACVs must hold current qualifications and certificates as required by the USLC. Det Norske Veritas (DNV) Rules for Classification of Ships requires shipping companies to establish an onboard verification process to ensure that personnel are qualified, certified and medically fit for the performance of their tasks, in accordance with national and international requirements.⁷ The Navigation Act 1912 also states that unqualified persons are not to perform certain duties on ships and that all crew must be able to produce certificates to proper authorities. Fines apply for non-compliance. It is an individual marine officer's responsibility to maintain marine certification, current qualifications, certificates and medical assessment and to hold current documentation, including passports, identification cards and aboriginal land permits.

To ensure that marine crews comply with mandatory regulations and Customs' instructions, verification of qualifications is undertaken at the commencement of each patrol and also when personnel join or depart during a patrol. Seagoing crew are required to complete a Qualification Check-Off List. All certificates, permits and other documentation must be sighted prior to sailing.

The NMU undertook an audit of the onboard verification checklists for the three-month period between 29 November 2002 and 13 February 2003. The audit noted instances where crewmembers either did not have, or did not present, their qualification. With minimum crews, such instances can compromise the crews' ability to undertake taskings and boardings. It can also have occupational health and safety implications. The Marine Operations Section advised that it has re-issued its instructions, relating to the Qualification Check-Off List, in a further effort to ensure that all Commanding Officers and crew comply with these instructions.

Evaluation and analysis of staffing and travel data

Currently, the NMU does not analyse staffing data or associated crew travel costs to evaluate trends, identify areas for improvement or potential savings. The ANAO recognises that the Crew Operations Section was only established in May 2002 and for the last 18 months has been involved in extensive recruitment campaigns for permanent marine officers and contract officers for Southern Ocean patrols. The ANAO considers it is important and good business practice for the NMU to regularly review the processes and costs associated with staffing arrangements and crew travel. This analysis will provide valuable input to the annual review of the NMU's domiciling policy and future workforce planning and recruitment strategies.

Crew training - Chapter 4

The NMU places the onus for renewing and re-certifying mandatory qualifications, certificates and permits on the individual crewmember. When a crewmember has completed training or re-certified a mandatory qualification, certificate or permit, they provide these details to Marine Standards. The relevant documentation is sighted and the information is recorded in a spreadsheet (Crew Qualifications Record).

In reviewing this spreadsheet, the ANAO found incomplete information, out-of-date data, the inability to sort on fields and limited scope for any data analysis. It is also very difficult to identify those qualifications that are due to expire. The Crew Qualifications Record spreadsheet does not record information on officers currently undertaking further studies to upgrade their formal qualifications. This information is recorded on a second spreadsheet (Crew Training). However, in reviewing this spreadsheet, the ANAO also found there was incomplete data in most columns.

The ANAO considers that the current Crew Qualifications Record and the Crew Training spreadsheets are inadequate for planning and monitoring training activities. If these spreadsheets are to be used to record and analyse training data, they should be redesigned and existing data validated to ensure that all training related data is accurately recorded. The NMU recognises the current method of recording crew qualifications as a problem and is initiating a project to incorporate this data into Customs' PeopleSoft system.⁸

To mitigate the risk of marine crew being rostered to or reporting for a patrol without current qualifications, certificates and permits, the ANAO considers that the responsibility for renewing and re-certifying qualifications should be shared by both the NMU and crewmember. Central Office should be aware when each crewmember's qualifications, certificates and permits are about to expire and formally advise the crewmember in writing. Progress in updating qualifications should be monitored and records updated when the qualifications have been renewed. Crew Operations should be responsible for certifying that the seagoing officers on the roster have the appropriate qualifications and certificates. Seagoing officers are still required under s17 of the Navigation Act 1912 to produce, on demand, their certificates to the proper authorities.

Collection and analysis of training related data

During the audit, the ANAO sought to analyse training related data such as training costs, the allocation of training resources and crew training activities. The ANAO found that, while the NMU may retain some of this data, it is not readily available. To extract this information in a usable form requires considerable effort on the part of Marine Standards and Crew Operations. The NMU advised that it did not analyse training related data.

The ANAO considers that to effectively manage its training needs, the NMU needs to retain and analyse some basic training data. This information will assist in identifying areas for improvement and support decision-making regarding the allocation of resources and priorities. It will also provide a basis for evaluating and reviewing the effectiveness of current training and development programs.⁹ As a minimum, the costs associated with training, how resources are being used and details of the training activities being undertaken, should be available to adequately monitor training inputs and evaluate outcomes.

Sea riding activities

The NMU has set an internal benchmark of 360 sea riding days per year.¹⁰ This target is designed to ensure sufficient coverage of the fleet. Marine Standards advised that, for the past few years, it has not achieved this target because of increased training commitments for new crewmembers and Southern Ocean patrols. The ANAO found that the NMU does not routinely collect any data in relation to sea riding activities such as the number of sea riding days, the number of patrols involved or crews assessed. To be able to accurately determine whether the sea riding benchmark is being achieved or to assess its continued relevance, the ANAO considers the NMU needs to collect and analyse such performance data.

Asset management - Chapter 5

The NMU's principle assets are its eight ACVs. As at December 2003, these were valued at $27.7 million and accounted for 98 per cent of the total value of NMU assets. The ANAO found that the NMU has processes and systems in place to manage scheduled and unscheduled maintenance. However, we consider these could be improved by:

• strengthening the NMU's quality assurance processes;
• greater integration of systems and migrating maintenance data from spreadsheets to a relational database;
• improving the control and supervision of contractors by developing better performance monitoring criteria in the maintenance contract; and
• recording and documenting configuration changes with a greater level of detail.

Quality assurance

NMU engineers usually perform unscheduled maintenance while the ACV is on a patrol. The ANAO considers that there are adequate controls in place given the majority of repairs are relatively minor. These controls include the engineer signing off the contractor's invoice or checks by Central Office with ACV crews to confirm that the contractor has completed all repairs.

For scheduled maintenance, the ANAO found that the slipping specification and repair and survey list could not be easily cross-referenced with the Maintenance Control Records (MCRs) and maintenance task sheets. As a consequence, there is a risk that the NMU could be paying for work that has not been completed. The ANAO considers that the quality assurance process would be strengthened, if the NMU was able to ensure that the tasks on the slipping specification and repair and survey list, correlated with the maintenance task sheets and the MCR spreadsheet. We also suggest that consideration be given to having the on-site engineer formally accept the ACV back into service after the sea trials are completed.

Maintenance data

Currently, the capacity of the NMU to analyse maintenance and repair data is limited. This is due to the manual process of recording MCRs on spreadsheets, a lack of data capture from maintenance periods and a lack of integration of maintenance spreadsheets and systems. The NMU is aware of this limitation and is currently working towards putting in place a Computerised Maintenance Management System (CMMS), as part of its new maintenance contract. The ANAO suggests that an important function of the new CMMS should be the ability to hold maintenance data in a relational database, increasing the scope for analysis and evaluation.

Performance monitoring

The NMU has a performance monitoring clause in its current maintenance contract, based on the Coastwatch surveillance contracts. This clause specifies that, where an ACV is non-operational due to faulty repairs more than 10 per cent of the time, the NMU can reduce payment. The Coastwatch contracts relate to flying hours for leased aircraft. The ANAO questions whether they are a suitable model for monitoring the maintenance and repairs of marine vessels. The NMU recognises the limitations of the current contract and intends to address these during the negotiation of its new maintenance contract.

Configuration management

Currently, the NMU records all configuration changes on a spreadsheet. As at October 2003, this spreadsheet listed 118 modifications. For those configuration changes that require on-going maintenance, the NMU also records the details on Micro Plan 3.¹¹ The NMU acknowledges that the spreadsheet and Micro Plan 3 are insufficient to adequately document and record configuration changes. Without an adequate record of all modifications undertaken, there is a risk the NMU will not have up-to¬date and accurate baseline specifications that reflect the build of each ACV. The NMU plans to address this deficiency by implementing a CMMS, as part of its new maintenance contract.

Asset planning and management

Customs developed its Asset Management Framework in 2001 and is currently moving towards implementing this framework across the organisation. The Framework recommends that business groups develop an asset management strategy that is linked with other strategies and produce a formal asset acquisition and replacement plan. The document also specifically recommended that the NMU develop a schedule of life-cycle costs for each ACV.

The ANAO found that the NMU had not produced an asset plan or strategy that will assist and guide decision-making regarding the operation and replacement of the Bay-class vessels. If NMU management do not clearly outline their asset strategy and calculate the estimated life cycle costs, there is a risk that the operating budget may not be sufficient to maintain and operate the NMU fleet over the life of the vessels. The ANAO considers that having an effective asset strategy directly affects the extent to which the NMU is able to strategically manage its assets and maximise its use of available resources. The NMU should, in consultation with Customs' Financial Services Branch, develop an appropriate asset management strategy.

The ANAO also considers it is important that Customs now give consideration to the range of issues that need to be addressed in replacing its current fleet of Bay-class vessels, as any future replacement will require significant lead time to implement.

Governance arrangements - Chapter 6

Business planning

The Customs' Planning and Performance Framework encompasses three levels: governance, operational, and individual. The ANAO considers this Framework is well designed. It identifies and articulates responsibilities and relationships and gives consideration to who is responsible for what, to whom, and by when. It acknowledges the relationship between stakeholders and those who manage resources and deliver outcomes. The Framework ensures plans are aligned and mutually supportive. Also, the Corporate Planning Guide provides the NMU with helpful step-by-step guidance in developing its Work Area Plan and Risk Management Plan.

Risk management

An integrated risk management strategy allows Customs (and the NMU) to identify, analyse, treat, monitor and communicate potential risks. In reviewing the NMU's Risk Management Plan 2003-2005, the ANAO noted that the NMU did not complete a SWOT¹² analysis, as outlined in the Corporate Planning Guide. This type of analysis will help the NMU to ensure that all potential risks are identified, assessed and, where necessary, treatment strategies developed. The ANAO suggests the NMU should undertake a SWOT analysis when next reviewing its Risk Management Plan.

Performance information

The ANAO examined the adequacy of the performance information used to measure the effectiveness of Customs' surveillance and response activities. Customs reports on the number of operational days achieved by the ACVs, and the number of suspect illegal entry vessels and foreign fishing vessels apprehended. The ANAO considers that Customs cannot determine the NMU's effectiveness solely by the number of operational days achieved, or the number of vessels apprehended. These current performance measures monitor activity only; they do not measure the impact or effectiveness of Customs' surveillance and response activities.

In December 2003, Customs commenced a Performance Measurement Project. This project is designed to improve Customs performance measurement reporting arrangements to ensure they are accurate, correct and justifiable; and to better align planning processes with the development of performance measures. The ANAO considers that the performance measures relating to Customs' surveillance and response activities should be reviewed as part of this project and when implementing the ANAO Annual Performance Reporting audit recommendations.¹³

Financial management

In the past five years, the NMU has experienced rapid growth, with funding increasing by 230 per cent from $9.1 million in 1999-2000 to $30 million in 2003-2004. It has also received additional funding for Southern Ocean patrols. A basic component of good financial management is establishing a budgetary framework that estimates costs and allocates resources. Such a framework would allow the NMU to monitor actual expenditure with its estimated costs. The ANAO was advised that the Customs Business Support Group (BSG) prepares the NMU annual budget with limited NMU input. The ANAO considers that the NMU should have greater involvement in preparing its own budget. However, in order to provide meaningful input into this process, the NMU will need to have a greater understanding of its cost structure and expenditure patterns.

Currently, a lack of financial awareness, monitoring of expenditure, and analysis of financial data, reduces the NMU's ability to effectively manage and control its financial resources. The NMU does not prepare reports that analyse trends over time, variances between estimated costs and actuals, or a breakdown of major costs. The NMU is unable to advise the specific costs associated with training, or operating individual ACVs, without significant assistance from the BSG and the Financial Services Branch. The ANAO considers that each Section Manager should be responsible for monitoring and analysing the costs associated with their particular area. This would strengthen the NMU's financial management; increase its ability to control costs; identify inefficiencies or savings; and provide managers with financial data to support decision-making.

Overall conclusion

Overall, the ANAO concluded that the NMU's surveillance and response operations are administratively effective. However, the ANAO considers that the NMU's administration could be more effective if its systems and processes were better integrated and automated.

The NMU has already taken steps to address a number of issues raised by the audit. The purchase or lease of an integrated rostering system will address data integrity issues and remove a considerable amount of the manual work currently undertaken within the NMU. The successful implementation of its new maintenance contract will provide the NMU with a greater level of contractor oversight and clearly specified performance criteria. It will also improve the control and direction of maintenance services and configuration management.

The ANAO has identified a number of areas where further improvements could be made to strengthen the administration of the NMU's operations. These include:

• examining the viability of accessing the Coastwatch Command Support System to automate tasking and reporting processes;
• facilitating the exchange of information and timely dissemination of intelligence;
• analysing staffing data and crew costs to identify trends, process improvements and potential savings;
• analysing training-related data to identify areas for improvement and to support decision-making regarding the allocation of resources and training priorities;
• evaluating the quality and effectiveness of training activities and programs;
• developing an integrated asset management strategy that incorporates life-cycle costs, includes a timeline for the disposal of the ACVs and outlines a plan for the acquisition of replacement vessels; and
• developing a financial management framework and routinely analysing financial data, expenditure patterns and cost structures.

Recommendations

The ANAO has made nine recommendations aimed at improving the administrative effectiveness of the NMU's surveillance and response operations.

Agency response

The audit of the administrative effectiveness of the National Marine Unit has been beneficial and the opportunity to comment, both consultatively throughout the audit and during the reporting phase is appreciated. Customs agrees with all recommendations. Significant progress is already being made towards implementing these recommendations.

Footnotes

1 Australian Customs Service, 2003, ‘National Marine Unit', Australian Customs Service, viewed 13 November 2003, http://www.customs. gov.au/site/index.cfm?area_id=5&nav_id=268.

2 The Commonwealth Government, through GBRMPA, is working to increase the number of green zones (currently less than 5 per cent) to 33 per cent to protect the biodiversity of plant and animal life throughout the Marine Park. A revised Zoning Plan was submitted to the Parliament in December 2003 and should be implemented later this year.

3 State and/or Local government agencies submit tasking requests through Customs' regional and district offi ces. These are then forwarded with their own tasking requests to Enforcement Operations.

4 Operation Eddington supports the ADF's Operation Relex, which is to detect and deter unauthorised boat arrivals. The current NMU commitment to Operation Eddington is four ACVs deployed in northwest Australia and the Torres Strait. This commitment could change with the level of threat.

5 The USLC is administered by the Australian Maritime Safety Authority (AMSA) and specifies the minimum marine qualifications required by crewmembers for ACVs to operate in and around Australian waters.

6 The conditions of service for permanent seagoing marine officers are different to those of offi cers recruited for Southern Ocean duties. These officers are employed under a 12-month employment agreement.

7 DNV Rule for Classification of Ships–Part 7, Chapter 5, Section 2, Article 401.

8 PeopleSoft is Customs' software application that manages data and communications for a wide range of functions such as human resources and financial management.

9 Australian National Audit Office and Australian Public Service Commission, Building Capability: A Framework for Managing Learning and Development in the APS, April 2003, p. 22.

10 Sea riding activities involve a Marine Standards Supervisor embarking on an ACV patrol, conducting routine exercises and observing crew prerformance. This benchmark is 15 per cent of the total target of 2400 operational days for the NMU fleet annually.

11 Micro Plan 3 is installed on all ACVs and records details of equipment, suppliers, orders, spare parts and equipment running hours.

12 Strengths, weaknesses, opportunities and threats.

13 The ANAO recently completed Audit Report No.11 2003-2004, Annual Performance Reporting. The ANAO made two recommendations to improve accountability for, and transparency of, results in agencies' annual reports and the presentation and use of performance information to analyse results. Customs was one of the agencies included in this audit and agreed to both recommendations.