The auditor-general has criticised the $540 million redevelopment of the Australian War Memorial in Canberra.

A recent audit uncovered significant lapses in oversight and mismanagement of conflicts of interest. 

It says the memorial management deliberately avoided ministerial oversight on multiple occasions by strategically splitting contracts to fall below the $1 million threshold, thereby circumventing required approvals.

The project, which started in 2018, was flagged in the audit for “steps taken to avoid seeking ministerial approval for the entering into contracts on two occasions”. 

The audit revealed that the information provided to the minister was often “insufficiently detailed”, hampering the enforcement of public governance and accountability rules.

The procurement strategies used raised several red flags, including in one instance where a signed contract variation exceeded the minister-approved value, and the variation's cost was incorrectly reported in subsequent briefs to the minister. 

Additionally, the audit found that the business cases, particularly a detailed $11 million business case, were not duly considered by the government before approval, as evidenced during a parliamentary committee review in 2021.

Despite these findings, the War Memorial has defended its handling of the project. 

Director Matt Anderson noted that the auditor-general affirmed the project's cost-effectiveness. 

“It's very, very important to note for our taxpayers that it does represent value for money,” Anderson stated, acknowledging the need for better documentation, especially in recommendations to ministers.

The report not only criticised the management practices but also found that the memorial had initially failed to engage sufficient probity advice given the scale and risks associated with the procurement processes. 

This oversight was attributed to inadequate engagement with external probity advisors and insufficient conflict of interest declarations from those involved in procurement.

In light of these findings, the auditor-general has issued five recommendations aimed at tightening the ethical conduct and documentation of the War Memorial's procurement activities. 

These include enhancing conflict of interest declarations, ensuring all procurement activities are adequately documented, and improving the transparency and accuracy of ministerial briefs.

Minister for Veterans' Affairs, Matt Keogh, has requested a detailed briefing from the auditor-general to further delve into the findings and recommendations. 

As the project continues, with completion slated for June 2028, the War Memorial has committed to implementing all audit recommendations. 

The full report is accessible here.