Asset Investment Reporting

The exception-based reporting for asset investments under the Gateway Initiative offers a new monitoring capability - so a project potentially or in trouble is not only identified, but is case-managed to bring it back into line to delivery requirements.

Given that departments use the Business Management System (BMS), it makes sense to aim for reporting to be ultimately swept up within the BMS. A first step enhancement for reporting is to be in place by September, however realistically, reporting is not a destination but a journey and DTF will work with departments to further develop this Gateway element.

Reporting will require evolution and transition as we move to a more robust reporting framework.

Gateway Reporting presents:

• information on all asset investments that cover lifecycle stages from ERC approval to handover to the end user
• asset investment delivery progress for all classes of non-current physical assets
• enhanced capacity in departments to streamline and consistent report to Treasurer and ERC
• more information yet less data to decision-makers in formats tailored to better inform them
• the means to identify and escalate intervention early enough on any project requiring attention to minimise any adverse downside consequences
• specific reporting to minimise the overall risk to the Government in asset investment provision.

Frequently Asked Questions

Q. What will be the impact of enhanced reporting on departments? Will this require us to develop new systems?

Quarterly asset reporting will still be required. The enhanced reporting system replaces the current quarterly asset reporting format with the first reports due for the quarter ending September 2003.

The proposed format of the enhanced reporting framework is based on:

• a risk rating (high risk, medium risk, and low risk) approach. The risk rating assessment made by the Department determines the level and type of information reported. This will focus Department’s efforts and ERC attention towards high and medium risk projects and actions / mitigation plans to ensure successful project delivery. For projects at low risk, no additional information will be required than that already being provided on a quarterly basis.
• only apply to projects with a Total Estimated Investment (TEI) of $10m and above. ERC will still maintain discretion to select projects to be included within the reporting framework. Projects under the $10m threshold will only be reported on an exception items basis.

Enhanced reporting will utilise the Business Management System (BMS). All asset information will be available on the BMS, negating the need for Departments to fill in spreadsheets as is currently the case.

This is a first step in improving departmental monitoring of infrastructure project performance with future developments to be determined in conjunction with Departments.

Q. Why has the reporting system changed?

The current reporting system provides an historical 'snapshot' of the performance of major capital projects. As such, the current reporting format does not allow meaningful analysis of:

• potential project risks and mitigating strategies;
• issues precluding timely delivery of milestones;
• potential budget impacts; and
• service delivery implications.

The enhanced reporting system has a risk-based 'forward looking' focus which seeks to facilitate better decision making through the ability to pre-empt issues precluding the delivery of major capital projects on time and within budget.

Q. How is risk to be assessed?

Departmental self-assessment would determine those projects that would be categorised high risk, medium risk or low risk. DTF is working with departments to finalise guidance on risk category parameters.

Essentially, projects at High Risk will provide early warning to Government of those projects that are not on track either in terms of budget or timeliness and action is required to address the issues. These projects will require departments to provide detail of the issues and risks affecting the project, proposed mitigation plans and the impacts on project or service delivery.

Projects at Medium Risk have significant risks but are as yet still on-track and only require departments to provide a summary of the potential risks and an indication of how the risks are to be managed.

Projects at Low Risk are those considered on track with the potential risks being adequately managed. No additional information will be required than that already being provided on a quarterly basis.

Q. How will DTF use reporting information?

DTF will provide a quarterly whole-of-government status report to the Treasurer, Minister for Finance and ERC for consideration of the performance of major capital projects. The reporting will be based upon a risk rating approach to focus attention to issues/risks early enough to enable projects to get back on track.

The information is designed to provide assurance to ERC that project risks are being effectively managed.

Greater ERC focus on risk management plans will also put pressure on project managers to further improve risk management.