An independent Commonwealth watchdog is investigating a controversial work-for-the-dole program.

The Community Development Programme (CDP) is blamed for driving up poverty and hunger in some remote Aboriginal communities.

The CDP covers about 33,000 welfare recipients, most of whom are repeatedly fined for missing activities or being late.

The Australian National Audit Office (ANAO) is probing "whether the Community Development Programme is well designed and administered effectively and efficiently".

The public sector oversight body also wants to examine if "sound analysis and advice" underpinned the scrapping of the former Labor government's remote employment program.

The audit office said it also wanted to see whether "outcomes are measured, reviewed and reported to the minister".

The ANAO will accept submissions until Thursday and a Senate inquiry was also probing the scheme.

Opposition calls for scheme overhaul

Under the CDP, participants are forced to work 25 hours a week to receive welfare. That is up to three times longer than city-based jobseekers.

People are fined one-tenth of their fortnightly Centrelink payment if they miss activities or are late.

For a person on unemployment benefits, which are typically less than $290 a week, penalties range from about $48 to $57.

The Federal Opposition wants the scheme radically overhauled with West Australian senator and Aboriginal leader Pat Dodson labelling it a "national shame".

In a statement, a spokesman for Indigenous Affairs Minister Nigel Scullion welcomed the review.

"The CDP has had a transformational impact on many thousands of remote jobseekers, either helping them to get jobs or giving them the skills to take advantage of job opportunities as they arise," he said.

"While this is a strong start, the minister is determined to do more to break the cycle of welfare dependency in remote Australia.

"In the budget, the minister announced he would be consulting on a new employment and participation model.

"Any lessons from the ANAO will be used to inform the design of the new model."

The ANAO report is due in September.