The Home Affairs Department is failing to support a troubled $317 million fleet of new border protection vessels, according to a report officials wanted to suppress.
Australia's national auditor has uncovered tensions within the patrol program as the Australian-based shipbuilder maintaining the fleet claims it is taking on unreasonable costs because of a shortage in federal government funding and a failure to anticipate the work involved.
Last month, it was revealed that Home Affairs flagged it could have the national audit office's report redacted, a move feared to continue a precedent set by an arms manufacturer that forced parts of a report into a military deal to be blacked out.
The Auditor-General on Tuesday released a report into the nation's Cape Class vessels patrolling for illegal activity on the nation's coastline, finding multiple failures by Home Affairs to manage the fleet as it came into service.
Funded with $570 million in government spending over a decade, the boats are tasked with detecting asylum seeker arrivals, illegal activity at sea and biosecurity threats, and together were required to provide 2400 patrol days each year.
Since the fleet arrived in full in 2015, Home Affairs has reported the department is falling well short of its 3300 patrol day target.
Home Affairs was failing to manage support for the Cape Class boats as they remained less available for patrols than planned, and was not managing its contract with the fleet's builder Austal effectively, the audit found.
The Australian company also raised stresses inside the patrol program, saying it wasn't prepared to support its costs into the future.
It moved to avoid blame for the fleet's shortfalls, saying Home Affairs was not funded well enough to support the boats. Austal said the government had underestimated the effort required to maintain the fleet.
Home Affairs had not monitored the Cape Class patrol boat contract effectively, contradicting its own policy and failing to identify and report risks, the national auditor said.
"Consequently, there has not been an effective transition to the in-service support phase of the Cape Class patrol boat project, and risks to the achievement of the performance and availability targets have not been effectively managed," the report said.
The department also had problems managing the program's budget effectively because it could not yet accurately estimate, forecast, and control costs to operate and support the eight boats.
Home Affairs agreed to the Auditor-General's call for improvement but disputed one recommendation, defending how it was managing its contract with Austal.
Auditor-General Grant Hehir last month revealed the department was one of the first two government agencies to signal it could try having sections of his reports blacked out.
Home Affairs told the National Audit Office in October it would consider seeking to redact the Cape Class patrol report, saying its publication would risk national security and the government's commercial interests.
"We seek your consideration of these matters in terms of potential prejudice to national security should that material be published," first assistant secretary Mark Brown wrote in a letter.
The Australian National Audit Office report has not been redacted.
Attorney-General Christian Porter's decision to suppress parts of a critical inquiry into a $1.3 billion military deal with French defence company Thales in June raised alarm among parliamentarians that he had set a precedent to redact other audits.
The audit office's report follows revelations that a budget blowout forced Home Affairs to drastically cut costs and slash airport staff this Christmas.