The auditor-general has given his strongest indication yet that a probe will be launched into the controversial Paladin contract to provide asylum seeker services on Manus Island.
Labor has sought an audit of the Department of Home Affairs' $423 million procurement of garrison support and welfare services in Papua New Guinea.
In his initial response released on Monday, Auditor-General Grant Hehir said such services had already been proposed as a "potential performance audit topic" and he would make a final decision by early April.
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