Defence must lift game on credit cards

Defence has been hauled over the coals for its use of credit cards, with a parliamentary committee recommending tighter controls and regular audits.

A Senate committee tabled its report to parliament on Thursday night calling for Defence to make a stronger commitment to fix problems raised previously by the Australian National Audit Office.

"Whilst fraud prevention and investigation is absolutely necessary, it is not enough, particularly as Defence moves towards a projected investment of two per cent of Australia's GDP by 2020," the committee report said.

The report said officials did not adequately respond to the committee's concern that a very high number of transactions are signed off by the individual incurring the expenses, with no other checks on the integrity of the transactions.

The report recommended Defence be more transparent about reporting disciplinary action taken against individuals found to have committed credit card fraud, whether steps taken are administrative or judicial in nature.

It also recommended Defence ensure adequate controls are in place to manage taxi and car hire.

The inquiry heard Defence copped an $18,000 interest payment after an army major used a credit card to pay more than $1.1 million on rations for a military exercise.

Officials admitted it should have been paid through an invoice rather than an electronic funds transfer. The major has undertaken extra training since the incident.