The WA Health Department spent $6 million on a project that was ultimately scrapped before it got off the ground, the Government's financial watchdog has found.

The Identity Access Management (IAM) project at Fiona Stanley Hospital was to be a key element that allowed access to the hospital and the computer systems.

The Department of Health terminated the project at the end of 2013 after spending $6 million on it.

Auditor-general Colin Murphy today tabled a report in Parliament and said the Government would continue to waste money unless it got better at implementing technology and communications projects.

"We found faults right throughout the entire project," he said.

"Procurement was protracted and delayed and wasn't conducted well.

"In fact initially they knew the tender didn't match the requirements for the specifications, they didn't ask for a proof of concept to demonstrate that what was trying to be achieved could be achieved."

In a statement, Mr Murphy said the report contained important lessons for all Government agencies.

"Unless we get better at bringing in ICT (information and communications technology) projects on time and budget, the state will continue to spend millions more than necessary," he said.

He also voiced concerns that the handling of the IAM project may be reflected in the department's approach to information communication technology project management in general.

Opposition health spokesman Roger Cook said the report showed the Barnett Government was "stuffing the hospital up".

"I now have very serious concerns for the Barnett Government's capacity to have this hospital opened in October," he said.

"We now know they can't deliver the paperless hospital so they're having to retrofit a whole range of record management systems, including storage, which is a huge challenge in that hospital, which wasn't designed for those features."

Earlier this month the Health Department launched an internal investigation scrutinising health department contracts worth nearly $1 billion, including the provision of IT at the state's hospitals.

Problems installing the ICT system at Fiona Stanley Hospital have been blamed for delays to the campus's completion.

The investigation was revealed after the Corruption and Crime Commission (CCC) released a report that found the Department of Health had not done enough to prevent fraud and corruption across its procurement activities.

The CCC launched an investigation after a public servant was found to have been using his position to obtain nearly $500,000 in benefits from health projects he was managing.

A spokesman for the Health Department said the internal investigation was ongoing.

It is not known when it will be completed or if the results will be made public.