An audit report has found the Abbott government did not properly follow the rules in approving Victoria's controversial East West Link.
Tony Abbott did not follow the usual process for approving funding for Victoria's East West Link road project, an auditor-general's report has found.
The report released on Monday said the then prime minister had approved $3 billion for the project in May 2014.
The "usual process" was for the infrastructure department to brief the relevant minister on its analysis of whether the project proposal is "in accordance with the legislated requirements".
"That did not happen on this occasion," the report found.
The auditor said that at the time the infrastructure department had not yet analysed material given to it by Victoria officials and the agency Infrastructure Australia had "unanswered questions from July 2013 about the underpinnings of the project's short form business case".
Infrastructure Australia did not receive the full business case until July 7, 2014 - two months after prime ministerial approval was given.
Also, the legal documents, or instruments, behind the project approval "inadequately set out the works that commonwealth funding could be used for, and any project costs that were not to be met from the commonwealth funding", the audit found.
"This situation reflected that specific information on the two stages of the project was not available at the time the advance payments were made."
The report recommended the return of $1.5 billion paid to Victoria in relation to the East West Link.
The Treasury said in response to the audit that it had provided advice to Treasurer Scott Morrison on options for recovery of the $1.5 billion.
"The commonwealth government and Victorian government continue to discuss options to resolve this matter," the Treasury said.
The auditor estimated Victoria would have earned more than $49 million in interest from the money as of the end of October.