The election agency was also criticised for the IT security surrounding the ballot scanning system, with the Australian National Audit Office finding that the agency "accepted IT security risk above its usual tolerance".

The report also found that not enough attention was given to ensuring the AEC could identify if the system tasked with counting the 14.4 million ballot papers had been compromised.

The system for scanning ballot papers was required following changes made to Senate voting laws that allowed voters to make optional preferences above the line, where previously preferences were distributed in line with party tickets. While the original work order to Fuji Xerox to design and develop the program was worth $7.6 million, the cost to deliver the system for the election was $19.2 million. Other cost increases included changes to the system to allow the ballot papers to be viewed by a human, and securing CCTV footage.

The report found that due to the three month timeframe to design and deliver the system, compromises were reached between the AEC and Fuji Xerox, including ditching the requirement to comply with Australian government IT security frameworks. According to the audit, the AEC reported that a quarter of government controls for treating security risks hadn't been implemented.

The system was designed and tested to address risks to ballot paper data, but a late decision was made to count all Senate ballot papers by AEC staff as well as the scanning system to ensure public confidence, the agency said. It wasn't recorded how many times the scanning system didn't match with the count by AEC staff.

The report found there was a 10 month delay in the agency instructing the IT contractor Fuji Xerox to delete ballot paper images and the data files. The instruction to delete the files was made on July 7, 2017, and only came after Fuji Xerox reminded the AEC that it was still waiting on approval to delete the files. The AEC paid a fee of $13,800 for each month the data was stored, adding $138,000 to the cost of the project.

The AEC told the auditor that it wasn't aware of any ballot papers that were unaccounted for, but that is below the agency's aim of 100% assurance of accountability for all ballot papers. The auditor found that in future, the agency "needs to be better able to verify and demonstrate the integrity of its electoral data".

"It has not undertaken a statistically valid audit to verify or demonstrate data integrity," the report said.

The report also found the AEC had "insufficient emphasis" on demonstrating value for money in contracts for outsourced transport of ballot papers, on which it spent $8.7 million on 17 contracts with ten suppliers. The AEC didn't generate enough competition for its business, the report found.

Scrutiny of the transport of ballot papers was high after the 2013 election where the loss of 1375 Senate ballot papers in Western Australia meant a new Senate election needed to be held.

While the AEC has agreed either in full or with qualifications to the recommendations in the auditor's report, the agency defended its handling of the 2016 election, calling it the "largest, and in many ways, most complex in the nation's history".

The double-dissolution election, short turnaround from some boundary redistributions and the advertising campaign surrounding new Senate voting laws were just some of the "layers of complexity" highlighted by the agency. It was also the first national poll to come after the implementation of recommendations following the loss of the ballots in the 2013 election.

The context of the election was so important to the service delivery that "the lack of focus on these issues in the ANAO report is potentially misleading to the reader," Australian Electoral Commissioner Tom Rogers wrote in a response to the report.

In a response to the auditor's report, Fuji Xerox said the project had delivered value for money for the taxpayer, "given the risk profile, accuracy, scale and immutable deadline of the design, build and delivery phases of the project".

"The AEC, 12 weeks out from the 2016 election and in response to parliament's passing of new Senate voting arrangements - the biggest in over 30 years - developed successful and secure arrangements to ensure that over 14 million Australian voters had their say and voted in the 2016 federal election" AEC spokesman Phil Diak said after the report was released.

"The AEC stands by what was achieved and is proud of it.The AEC always focuses before every electoral event on what can be improved in its preparations and has cooperated fully with the ANAO in the production of this report."