The Department of Immigration and Border Protection has been accused of mismanaging offshore detention centre contracts, with an independent audit alleging more than $1 billion was spent over the last four years without proper authorisation.

Key points: Audit finds $1.1b approved by DIBP officers without required authorisation

Audit finds $1.1b approved by DIBP officers without required authorisation No record of who authorised another $1.1b in payments

No record of who authorised another $1.1b in payments Immigration acknowledges lack of documentary evidence around payments

A report from Australian National Audit Office (ANAO) detailed "significant shortcomings" in the management of contracts for security and welfare services on Manus Island and Nauru.

It cited $2.3 billion in payments made between September 2012 and April 2016, which it stated were not authorised or recorded correctly.

"$1.1 billion was approved by DIBP officers who did not have the required authorisation and for the remaining $1.1 billion there was no departmental record of who authorised the payments," it stated.

The report further stated that contract variations totalling more than $1 billion were made without a documented assessment of value for money.

The Immigration Department disagreed with the claim that some payments were not appropriately authorised.

However, a response from Jenet Connell, the department's chief operating officer, acknowledged the lack of documentary evidence around the payments and cited plans to "further embed improvements".

"It is important to recognise the complex environment in which these contracts were established and continue to operate," she said.

"The garrison support and welfare services contracts were originally established during great uncertainty and over the last four years, the department has worked very hard to establish sustainable contract arrangements."

The report comes four months after an earlier audit that stated that the department was unable to demonstrate it had secured valued for money in three of the four hiring processes for centres on Nauru and Manus Island.

Department failed to act on mould issues at Nauru: report

The audit report also detailed issues surrounding mould in tents on Nauru and was critical of the department's response.

Inside a tent at the Nauru immigration detention centre. ( Supplied: Amnesty International )

It stated that the department was warned in February 2015 that the growth on the tents did not meet the Australian Mould Guideline.

Five months later, the department entered an arrangement with Transfield to clean the mould but as of August 2016, no progress had been made in the compound housing single men.

The department's chief medical officer had previously drawn attention to the extensive mould.

In a further statement issued on Tuesday, the department disputed "that it did not progress work to remediate mould problems at the Nauru RPC".

Greens senator Nick McKim referred to the situation as a "bloody shambles".

"Quite frankly, this audit paints the picture of a department that has gone rogue and needs to be brought to heel, and a minister who is not up to that job," he said in a statement.

"The Australian people deserve accountability. It's their money after all."

In a statement, Immigration Minister Peter Dutton said the report was "another indictment of the Labor-Greens border failures".

"The simple fact is there would be no IMAs (illegal maritime arrivals) in Nauru or Manus had Labor maintained the Coalition's Howard-era policies of border protection," the statement said.

Audit cites discrepancies between departmental, provider records

The ANAO has conducted six audits since 2004 — a period when both Labor and Coalition governments were in power — and each identified shortcomings.

It stated that when viewed together, "the audit findings point to serious and persistent deficiencies in the department's administration".

Record-keeping was highlighted by the ANAO, which said the department "often experienced difficulty" in gaining access to records.

It further stated that the department had not developed "a systematic approach to establishing and maintaining records in support of the contracts".

"For example, the department did not update its asset register and advise Comcover of new facilities in Nauru valued at $75 million," the report said.

"As a consequence the facility was not insured when it burnt down in a riot in 2013, shortly after being commissioned."

The burnt out remains of buildings after the 2013 Nauru riot. ( Nauru Information Office/J Olsson )

The report also stated there were significant records of incidents in the Nauru and Manus Island centres between 2013 and 2016, with the department and separate services providers producing different numbers of incidents recorded.

The audit also highlighted concerns over video and incident reports, stating that they "did not always reconcile".

"There were records of incidents which noted that video existed of an incident, but no corresponding video," it stated.

"During incidents there were gaps in the recording of incidents."

The department also referred the ANAO to Transfield's subcontractor Wilson Security, which it stated held almost eight terabytes of digital records.

But Wilson Security provided only two terabytes of data to the ANAO, stating "the majority of the footage was unrelated to incidents or investigations within the centre".

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