One of the five contractors organising settlement services for refugees has hit a financial wall, according to a report from auditor Grant Hehir on Thursday. Its sub-contractors are operating at a loss.

He also found anomalies with the grants that refugees can get for household furniture and other goods - the most expensive part of the program, costing $32 million over the 19 months to May this year.

And he found that the government has only recently begun checking how the $120 million program that delivers services to about 15,000 refugees a year is performing.

The government has contracted five groups to provide the settlement services around the country, at a cost of $523 million over five years: The Red Cross in Canberra and region, and in Perth ($104 million); Settlement Services International in Sydney and regional NSW ($206 million); Multicultural Australia in Queensland ($74 million); AMES in Victoria, South Australia and Tasmania ($135 million); and the Melaleuca Refugee Centre in Darwin ($4.2 million).

They are paid to ensure the refugees have the chance to learn English, have health checks, have their children enrolled in school, are registered for Medicare and other essentials and get help with finding somewhere to live.

Results are patchy, with one of the organisations, identified only as "Z", having much lower numbers of immigrants signed up for the different services within the required time.

The organisations can provide basic household goods to refugees up to $4300 for a single person. But the audit revealed that a review late last year by the Department of Social Services found two organisations were claiming the maximum household-goods payment at a much higher rate in two regions than anywhere else. The organisations, identified only as "K" and "R" were claiming the maximum in 95 per cent and 60 per cent of cases in those regions.

The department looked at samples of invoices where high claims were made and found that some invoices weren't itemised, some invoice totals were higher than the amount claimed, and some refuges were living together but each claiming a household goods package.

In the regions with high claims, a single package supplier was used for household goods - where one supplier invoiced for the whole package of goods.

The department asked the two organisations "K" and "R" for itemised invoices. Organisation "K" said it couldn't provide them. "R" provided itemised invoices, which revealed that the package supplier was charging above-market rates for items such as toasters, in the view of the department.

The department's review said discrepancies across three of the organisations should be investigated, and it said individual household goods prices should be obtained from organisation "K". It also said a broader review should be done.

But recommendations were "yet to be fully actioned", Mr Hehir reported this week

Home Affairs, which took over the program in July this year, said "it was considering the recommendations and had already implemented some changes such as enhanced guidance to contract managers".

The audit also found that "K" had run into financial trouble, and in January this year the department asked the minister for extra money for K. The social services minister at the time was Paul Fletcher.

The department told the minister that K's average cost per refugee was lower than the national average and it had urged K to reconsider its prices during contract negotiations. But "Service Provider K assured the department that it could deliver services for the tendered prices", the department said. "Unfortunately, this is now resulting in viability issues for a number of Service Provider K's services and their sub-contractors."

The audit says the minister refused the request, but in March approved three months' funding to the end of May for the organisation's sub-contractors.

Mr Hehir said the program had not been properly managed. Outcomes were not being tracked for refugees, and no effective key performance indicators were in place for the organisations delivering the services.

The program started in late 2017, but limited, non-compulsory reporting of performance only began in July this year. Only three of the nine key performance indicators were being reported against (requiring organisations to deliver orientation programs), and only one of the five organisations was meeting all three.

While organisations are supposed to give a score for each client at the start and end of the program, assessing health, housing, education and employment, the scores were not being tracked. They were manually recorded, and the social services department had not extracted or analysed the data. A new system from February this year allowed organisations to record scores electronically, but the data could not be extracted.

Multicultural Australia said it had no viability concerns, but referred other questions to the department. Settlement Services International and AMES also said they had no financial concerns. AMES chief executive Catherine Scarth said the program was a significant change from previously and providers were working through the "teething issues" with the department.

"We would see our role as building people's capacity to be independent as quickly as possible," she said, pointing to the department's recognition that refugees had different needs - and not all of them necessarily needed to be met at the airport or helped to make medical appointments.

The Red Cross and Melaleuca are yet to respond to requests for information.