Public service agencies don't know if they're funding staff pay rises with savings they told the Coalition government would offset multimillion dollar wages growth.
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The national auditor has found federal agencies are not monitoring whether efforts to save money had absorbed the cost of wage hikes negotiated with their public servants.
Under strict rules for bureaucrats bargaining with their employers in 2014, the Abbott government told agencies they must fund pay rises by working more efficiently rather than inflating fees for customers or using funding allocated to other projects.
In a report released on Thursday, Australia's national audit office said after changes loosening the policy in 2015, agencies had stopped counting and then submitting estimates of savings promised to fund their wage rises.
The Abbott-era bargaining rules forced agencies to tell the public service commission in detail how they would meet wage growth costs by working more efficiently, before the Coalition softened the policy.
Changes in October 2015 lowered the bar for employers proving they would meet the costs of their higher wages bill. Under new rules, they could also claim savings by cutting conditions from workplace deals that the public service commission said made them less efficient.
The Department of Agriculture and Water Resources in 2014 estimated it would fund half the $42 million needed for wage rises under its proposed workplace deal with savings achieved by cutting conditions from its agreement with workers. Efforts to rein in costs from staff absences and leave would save the remaining amount.
As the proposed wages bill grew after staff rejected proposed agreements, so did the amount of "unquantifiable productivity gains" it would use to fund it.
"DAWR did not identify where the unquantified savings component would be sourced from or the rationale for its increase over time," the audit report said.
"Estimates included in the final declaration from May 2017 noted that the total cost of the remuneration increases was $67.92 million over the life of the agreement."
Australia's anti-doping sport agency didn't estimate any measurable savings that could offset pay growth. In a 2017 proposal, Human Services department employers identified $205 million in savings, covering only 51 per cent of the $399 million in wage increases.
Nearly $685,000 in pay rises for officials at the public service commission - which enforces the workplace policy - was also unsupported by any proposals to make the agency more efficient.
The Foreign Affairs department was alone among large departments audited that detailed all the offsets to its bureaucrats' pay growth.
Commonwealth employers should document their costs and sources of funding for wages to show they could afford pay rises without fee hikes and service cuts, the auditor said.
"The absence of a government requirement to monitor and report on the implementation of the framework, including whether entities implemented identified productivity savings, redirected program funds or lowered services, limits the visibility of and accountability for key aspects of the 2014 and 2015 bargaining policies."
Agencies investigated for the report told auditors it wasn't always practical or possible to track how promised savings had offset wage increases, because their productivity gains weren't easy to monitor, or were linked to broader reforms.
