Defence staff are accepting scores of corporate freebies from businesses without the proper approval, a damning audit report reveals. More than half of the gifts and hospitality accepted by staff lacked required senior-level approvals.
Compliance with the department's internal rules was low, resulting in an average compliance rate of 56 per cent across core policy requirements.
The Australian National Audit Office revealed these oversight weaknesses in a report examining the department's administration of its internal gift and hospitality tracking frameworks.
The audit found that Defence employees did not obtain mandated written sign-offs or notifications from three-star or senior executive service officials in 57 per cent of the commercial entries they logged between September and December 2025.
The Public Service Act requires officials to avoid using their status to gain improper benefits, but a previous 2022 internal Defence audit similarly showed the agency was not effectively managing its gifts and benefits activities.
Defence updated its internal policies three times since October 2020, introducing restrictions on accepting items from companies doing or intending to do business with the department unless specific senior approvals were granted.
The audit identified a number of declarations within the internal system, with employees recording 751 corporate perks, hospitality invitations and gifts in 2025.
The audit also revealed that Defence maintained internal tracking thresholds at $300 for most employees, which departed from the Public Service Commission's guidelines that any perk more than $100 be disclosed to the public.
However, the newly introduced controls were not fully adhered to by staff late last year, prompting the department's leadership to review its policy suite before updated whole-of-government integrity guidance.
Although Defence management reported that a corrective compliance program had been fully implemented and closed out in August 2023, the audit found no evidence of a targeted risk-based mechanism being active as of March 2026.
In cases where Defence employees recorded items on the centralised register, the median value sat at $120.
Weaknesses also extended to the department's recorded spending, with the audit revealing officials breached finance laws by allocating money for hospitality and gifts without authorised delegate sign-offs in 32 per cent of transactions under a previous policy.
The audit found that Defence employees approved their own hospitality and accepted invitations from registered political lobbyists.
It departed from Finance department instructions that gifts received by officials in the course of their work automatically became relevant Commonwealth property, rather than items individuals could choose to retain.
The audit showed the department did not retain required conflict of interest forms in 36 per cent of instances where employees recorded that they had submitted them.
The report concluded that the department was only partly effective in managing its requirements because of structural weaknesses in assurance, making three recommendations focused on reviewing fraud controls, developing a targeted compliance program and establishing senior executive reporting.
Defence secretary Meghan Quinn and Chief of the Defence Force Admiral David Johnston accepted the findings and initiated a review of the department's policies to be supported by a strengthened compliance framework.
The joint response said: "Defence recognised the effective management of gifts, benefits and hospitality is underpinned not only by policy, but by a strong integrity culture, supported by ethical decision making at all levels."
