The Immigration Department failed to rein in spending on Australia's overseas immigration detention, which costs taxpayers more than half a million dollars a year for each asylum seeker, an audit has found.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Auditor-General Grant Hehir's searing report also shows officials could not explain how they selected the businesses that received more than $3 billion to build and run the detention centres in Nauru and Papua New Guinea's Manus Island.
The report, tabled in Parliament on Tuesday, examines how the department managed the contracts for security, cleaning, catering, health and welfare services for detainees.
It said the department fell "well short of effective procurement practice", and identified "serious and persistent deficiencies" in its efforts to build the centres in 2012 and then to reduce costs over the following four years.
The audit noted "significant skill and capability gaps" at all levels of the departmen, as well as poor planning, procurement and record-keeping. It also criticised the department's treatment of suppliers and failure to prove value for money.
It found the department failed to check whether the officials who awarded lucrative contracts to companies had any conflicts of interest.
Nor could it demonstrate why its contractors – including Transfield, the Salvation Army and Save the Children – provided value for money for taxpayers.
The department accepted all audit recommendations and admitted it had not documented its decision-making processes well.
However, in a 700-word statement, it defended its record, saying it had worked in an urgent environment when thousands of asylum seekers were arriving "illegally by boat".
"Australia's immigration detention network had been rapidly expanding and was under considerable strain: almost 7000 people were in immigration detention in Australia, of whom about 95 per cent were boat arrivals," the statement said.
"The department met the requirement of the government of the day in an environment that was high-tempo and complicated by logistics and procurement activities in foreign countries.
"Delegates were required to make decisions on complex matters within very short time frames. It remains the department's position that decisions taken in this period were reasonable under the circumstances."
The audit report found the department's approach to contracting had defied a directive to reduce costs, saying it had "reduced competitive pressure and significantly increased the price of the services without government authority to do so".
In contrast, the department said its records show that average spending per detainee fell from $698,000 in 2012-13 to $529,000 last financial year.
Mr Hehir's report said higher than necessary spending and poor procurement standards exposed the government to reputational risk.
