It also found there was no specific guidance for Defence officials in how to ensure the perception of impartial and non-political armed forces.

The report referenced an incident in March last year when Defence Chief Angus Campbell approached then-defence minister Christopher Pyne during a press conference, to ask that the military leaders could step aside while their minister answered questions of a political nature.

The auditor general found there was no internal policy to avoid such an incident, or to guide the decision-making of military leaders in similar situations.

"Neither the manual nor the policy provide advice on protocols for preserving public confidence and perceptions of APS and ADF impartiality where overtly political issues arise," auditor-general Grant Hehir wrote.

It was only General Campbell's quick thinking and decision-making that avoided a more awkward incident.

Defence should give guidance on such matters ,"so that Defence's management of such situations does not rely exclusively on the experience of individual personnel," Mr Hehir said.

While Defence had 168 staff in marketing and communications area, other agencies like the Department of Human Services, the Australian Tax Office and the National Disability Insurance Agency had a higher percentage of their total workforce working on communications.

Despite the high number of staff, Defence only met deadlines to respond to journalists 61.7 per cent of the time in 2017, 38.9 per cent of the time in 2018 and 23 per cent of the time in 2019.

Before the audit period began, Defence had no procedure to triage requests - meaning there was no prioritisation system for enquiries. A lack of flexibility and responsiveness meant the institution had damaged its reputation for managing stakeholder relations, submissions to the audit office had said.

Improvements in this area "would assist in avoiding misreporting and unnecessary delays" the audit office said.

Before the end of the audit period, Defence introduced a triage system with the goal of responding to high priority requests within three hours.

Defence agreed with the two recommendations made by the audit office, that the department clearly document its expected outcomes and performance measures, and clarify its expectations when evaluating communications activities.