Immigration Minister Peter Dutton has defended his department's professionalism in the face of an auditor's report saying it broke procurement rules and lost important records.

Key points: Report finds "serious and persistent deficiencies" within department operations

Report finds "serious and persistent deficiencies" within department operations Failings include absence of important discussions and processes and a cost blow out

Failings include absence of important discussions and processes and a cost blow out Peter Dutton attributes shortcomings to former Labor government

The Australian National Audit Office report, issued yesterday, said it found evidence of "serious and persistent deficiencies" in the way the department hired and paid contractors $3 billion to run the Manus Island and Nauru offshore detention centres.

The report covers the period under Labor when the camps were re-established, and under two further procurement phases handled by the current Government from 2013 onwards.

Mr Dutton told the ABC the department had done its best in difficult circumstances following high numbers of asylum boat arrivals under Labor.

"I'm not going to be critical of the department," he said.

"The department was placed in a very difficult situation and we are still dealing with, frankly, the mess of Labor's making."

The audit report catalogues "procurement skill and capability gaps among departmental personnel at all levels" resulting in "higher-than-necessary expense for taxpayers and significant reputational risks for the Australian Government".

The report catalogues a host of serious failings, including:

Major contracts were awarded without costs being discussed and tenders were not subject to competitive tension

Major contracts were awarded without costs being discussed and tenders were not subject to competitive tension Contracts were terminated without a record of why or how contractors were performing against agreed benchmarks

Contracts were terminated without a record of why or how contractors were performing against agreed benchmarks No evidence could be found that either due diligence or conflict-of-interest processes had taken place before contracts were signed

No evidence could be found that either due diligence or conflict-of-interest processes had taken place before contracts were signed A Finance Department estimate of the per-head cost of housing asylum seekers of $200,000 blew out to $573,000 per head

Mr Dutton said any shortcomings were the result of the pressures placed on the system by Labor's time in government.

"They handled the situation as best they could and as professionally as possible," he said.

He also defended the department's decision to continue paying contractors for high numbers of detainees despite the fact asylum boat arrivals stopped during the Government's Operation Sovereign Borders.

"They do need that latent capacity, so they make professional judgements," he said.

Immigration Department has become 'a rogue agency'

Labor responded to the report by attacking government policy.

"This report further highlights Peter Dutton's complete failure to secure durable and credible third-country resettlement arrangements, [which] has led to cost blowout and crisis in offshore detention centres," Labor spokesperson for immigration and border protection Shayne Neumann said.

Further comment has been sought from Labor.

The Greens said the report was an indictment on both major parties and the Immigration Department.

"It's become a rogue agency and both Labor and the Coalition have got an awful lot to answer for in terms of presiding over a massive waste of taxpayer money," Greens immigration spokesman Nick McKim told PM.