Australia's A$50 billion ($35 billion) submarine order with French shipbuilder Naval Group is running nine months late and the defense department cannot show that A$396 million already spent on the contract was effective, according to an audit report.
The submarines are at the center of Australia's plan to expand its military and protect strategic and trade interests in the Asia-Pacific region.
Australia's opposition Labor said the delay just one year after the contact was signed was "deeply concerning", but Defence Minister Linda Reynolds said the program required a long-term focus.