Authorities admit cuting funding to Queensland and Northern Territory sexual health programs without evaluation or consultation.
Health officials were asked about ripping the money from the Queensland AIDS Council and Northern Territory AIDS and Hepatitis Council during a Senate estimates hearing on Friday.
They said the health department reviewed "progress reports, outcomes and evidence" in a national 2015 review of sexual health spending and decided it was time to overhaul how the money was spent.
"There was really limited evidence of these programs, which we've been funding for decades now, have really had any impact," health staffer Bobbi Campbell told senators.
"The progress reports did not provide us with any evidence or outcomes to sustain funding."
The program providers have been told to find alternative funds from states and territories, with their commonwealth cash to dry up in June.
Responding to a string of questions from Labor senator Jenny McAllister, the department confirmed it had not done any specific evaluation of the programs it was defunding.
Neither were the organisations asked whether they'd be willing to partner with the department in an evaluation of their programs.
"Didn't ask, didn't do an evaluation, defunded," Senator McAllister said.
Fellow Labor senator Malarndirri McCarthy was taken aback by the department's responses.
"You acknowledge that rates of STIs are increasing at a phenomenal rate, you want to have a national program," she said.
"You haven't evaluated the current situation with the Queensland and Northern Territory centres nor offered them an opportunity.
"So how is that going to close the gap in health for indigenous Australians, when you've made a decision it appears without any thorough thought?"
Ms Campbell said $11.8 million in sexual health funding would be available from 2016/17 - 2018/19 but offered on different terms for "innovative" projects and grants.
"It's not that we're completely pulling out, it's that we are looking at a different way of doing something so we can have maximum impact," she said.
"These organisations are always welcome to provide proposals."
