A scathing audit of the Turnbull government's bungled cancer screening register has found glaring conflicts of interest among federal Health Department officials who awarded the $220 million contract to Telstra.
The Australian National Audit Office has slammed the way health officials went about procuring the register, finding there was inadequate consideration of risk and poor management of conflicts of interest.
After scouring the Telstra share registry, auditors discovered nine officers involved in the procurement owned Telstra shares but didn't disclose this at the time, Thursday's report reveals.
One of those officers voted for Telstra as the preferred tenderer.
The cancer register, along with a new and improved cervical cancer test, was supposed to be up and running by May 1 but won't be available until December after Telstra Health failed to meet its deadline.
Taxpayers will cough up at least $16 million for emergency measures to ensure women can still be tested for cervical cancer in the meantime.
The report reveals concerns Telstra could not meet the deadline emerged as early as August 2016 before legislation to establish the register passed parliament.
At the time, there were questions about why Telstra had won the contract, given it had never run a similar project and the not-for-profit Victorian Cytology Service, which also competed for the contract, had the experience and infrastructure to do it.
The report found a number of conflicts of interest and probity issues surrounding the project were not adequately recorded.
Fourteen per cent of officers involved in the procurement declared conflicts of interest but the declaration from an officer who voted on contract negotiations could not be found.
Auditors identified five officers who failed to declare a past or current working relationship with a tenderer, including one who was later found to have an apprehended bias and had to be removed from the team.
Where conflicts were declared, assessments of them weren't recorded, making it impossible to prove the conflicts were considered and treated appropriately.
"The integrity of the procurement was weakened by health staff acting inconsistently with the probity arrangements," the report said.
"The full extent of the project's complexity, risk and the potential consequences of project failure or delay were not communicated to the government at the point in time the funds were allocated.
"The objectives sought by the government have not been achieved in the agreed timeframe and additional costs have been incurred as a result."
The report recommends the department ensure actual, potential and perceived conflicts of interest are recorded and addressed.
It recommends senior executive employees regularly declare in writing the financial and other interests of themselves and their families.
The health department has agreed to the recommendations, conceding it needed to improve its processes.
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