Immigration Minister Peter Dutton admits his department has made mistakes in its handling of contracts for offshore detention centres.

A report from the Australian National Audit Office (ANAO) has criticised the contracting of welfare, security, catering and cleaning services, including a deal with Broadspectrum (formerly known as Transfield) that had blown out by more than $1 billion for which no alternative quotes were sought.

Mr Dutton said the Immigration Department had rushed set up the detention centres under the former government.

“[Former Prime Minister Julia] Gillard at the time made an announcement that people would go to Nauru and things had to be set up within a couple of weeks,” he said.

“So let's put it in context … yes I'm sure mistakes were made and decisions were rushed.

“When I speak to the Border Force staff and the sailors at sea, they were pulling a 1,000 people a week off boats, they were pulling bodies out of the water of children that'd been eaten by sharks and the rest.”

The ANAO found no evidence that the department had secured value for money in three of the four hiring processes for centres on Nauru and Manus Island.

It said there were “serious and persistent deficiencies” in the contracting of companies behind the detention centres from 2012 to 2016.

In one example, Transfield was not required to detail what services would be delivered and what they would cost when establishing the centres in 2012.

“As a result, it was very difficult for the department to demonstrate that it had conducted a robust value-for-money assessment which considered the financial and non-financial benefits of the proposal,” the report states.

The review said prices were often not settled until after contracts were signed.

One contract for Manus Island in 2013 and 2014 exceeded historical costs by between $200 million and $300 million.

Mr Dutton defended the decisions.

“In relation to my experience with the department, they are professional operators, they have an absolute determination to preside over a program which is well run,” he said.

The report said that as the numbers of asylum seekers being detained continue to fall, the cost of detention remains over double earlier estimated figures.

“The Prime Minister had requested that per-head costs be lower as a result of retendering the contracts, but the department did not calculate a per-person cost,” the ANAO stated.

“Finance advised the ANAO that under the consolidated contract, the per-person-per-annum cost of holding a person in the offshore processing centres in Nauru and on Manus Island, was estimated at $573,111, at the time of the Mid-Year Economic and Fiscal Outlook 2015-16.

“Prior to consolidation, Finance estimated the cost at $201,000.”