Hello Red Admin,
Thanks for posting your question in the Microsoft Q&A forum.
To resolve this issue, you should assign the "Key Vault Administrator" role to the System-assigned Managed Identity of your Automation Account. This role provides full control over Key Vault resources, including the ability to manage access policies.
If assigning the Key Vault Administrator role is not feasible, you can use the Azure Resource Manager (ARM) API to update the access policies. This approach requires the Microsoft.KeyVault/vaults/accessPolicies/write
permission, which is included in the KeyVault Contributor role
Another approach is to use the Microsoft Graph API to manage access policies. This method requires appropriate Graph API permissions for the Managed Identity
Please don't forget to close up the thread here by upvoting and accept it as an answer if it is helpful