The Attorney-General’s Department has recommended that an external audit be conducted into the troubled North Australian Aboriginal Justice Agency, which has faced allegations of corruption, fraud and a mass exodus of staff.

But Attorney-General Mark Dreyfus and his Department appear unwilling to get directly involved in holding NAAJA to account.

The recommendation of an audit was revealed during questioning from Shadow Attorney-General Senator Michaelia Cash and Shadow Minister for Indigenous Australians Senator Jacinta Nampijinpa Price in a Senate estimates hearing.

The AGD also revealed NAAJA received millions of dollars of additional Federal Government funding on top of the widely reported $83 million over five years from the National Legal Assistance Partnership.

Senior Officials from the AGD revealed during the hearing that Department Secretary Katherine Jones signed a joint letter with her Northern Territory counterpart to NAAJA advocating for an external audit to be undertaken.

Departmental officials also suggested that Attorney Dreyfus may in fact be able to request the Australian National Audit Office to conduct an audit. The officials undertook to come back to the committee to confirm on notice.

The Auditor-General Act sets out a power to conduct an audit of "Commonwealth partners", which covers bodies that receive Federal money for Commonwealth purposes.

Senator Cash wrote to the ANAO last month asking for an audit to be conducted but that request was knocked back by Acting-Auditor General Rona Miller who cited the timing of the request did not fit their planning for their work program.

The hearing heard that NAAJA, in addition to the $83 million NLAP funding had also received up to $6.3 million in other Federal funding through the Attorney-General’s portfolio through various mechanisms. This does not include funding provided by the National Indigenous Australians Agency.

Senator Cash said: “The Attorney’s own Department believes an audit should take place and I’d urge the Attorney to call on the ANAO to conduct that audit.”

“We’ve learnt of even more Federal Government money that is going to NAAJA and the Attorney should be very concerned about the serious allegations of misconduct and fraud that have been made. This is tax-payers’ money and tax-payers deserve to know it is being used correctly,’’ Senator Cash said.

Senator Nampijinpa Price said: “I’m appalled on behalf of the staff at NAAJA who have been trying to manage service delivery during an increasingly difficult time.”

“The Attorney General should be ashamed that while serious misconduct allegations surround NAAJA, his Department, which funds the organisation in multiple ways, has taken a back seat and manoeuvres away from responsibility and accountability.

“Instead the Attorney General’s Department appears to be liaising directly with the management team at the centre of misconduct allegations, who in turn assures the Department it is providing support programs to its staff.

“We learnt today the Attorney General’s Department funds the organisation in multiple ways, and this does not include the $6 million it receives via the National Indigenous Australians Agency from its own Justice Reinvestment Package.

“How can this Government have any confidence or integrity when it chooses not to look forensically at the issues being raised.”