Auditor weighs up Paladin PNG contract

The auditor-general has given his strongest indication yet that a probe will be launched into the controversial Paladin contract to provide asylum seeker services on Manus Island.

Labor has sought an audit of the Department of Home Affairs' $423 million procurement of garrison support and welfare services in Papua New Guinea.

In his initial response released on Monday, Auditor-General Grant Hehir said such services had already been proposed as a "potential performance audit topic" and he would make a final decision by early April.