An audit report has revealed that the federal government paid ten times the expected price for a parcel of Leppington land using taxpayer funds.
The 12.26 hectare block, known as the 'Leppington Triangle', was valued at just over $3 million in the Department of Infrastructure's 2018/19 financial statements.
However the department paid $29.8 million dollars for the land, formerly owned by the Leppington Pastoral Company, just 11 months earlier.
The price discrepancy led to an official audit by the Australian National Audit Office (ANAO).
The audit found that the "Department of Infrastructure did not exercise appropriate due diligence in its acquisition of the Leppington Triangle land".
"Aspects of the operations of the department fell short of ethical standards," the ANAO report states.
"An appropriate acquisition strategy was not developed.
"The valuation approach inflated the value of the land, which in turn led to the Australian Government paying more than was proper in the circumstances.
"Decision-makers were not appropriately advised on the land acquisition. Formal briefings omitted relevant information, such as: the purchase price, that the price exceeded all known market valuations of the land and the method of acquisition."
Macarthur MP Dr Mike Freelander said he was "most disappointed by revelations that the federal government had grossly overpaid for land for the development of Western Sydney Airport's second runway".
"This situation reeks of incompetence, and the coalition government must be appropriately scrutinised for this failure to responsibly manage taxpayer's money," he said.
"Time and time again, the coalition has demonstrated that they are not the responsible economic managers that they profess to be.
"It is disappointing that they cannot provide our community with the investment that we desperately need to drive job creation and economic growth, but can manage to accidently overpay millions of dollars for a parcel of land.
"[Labor] have consistently called for the creation of a National Integrity Commission, and will continue to fight to see that it is established."
The Auditor-General made three recommendations to the department including that the department "develop policies and procedures to govern its approach to obtaining purchase valuations".
A Department of Infrastructure, Transport, Regional Development and Communications spokesman said the department had acknowledged the ANAO's findings and agreed to all recommendations contained in the report.
"The key findings of the audit relate to the administrative activities of officials of the department two years ago," the spokesman said.
"The department has launched an investigation of staff conduct in the matter and will follow the due process of a formal investigation with an independent investigator.
"The department is committed to implementing the changes outlined in our response to the audit to ensure this does not happen again."
The Advertiser has contacted the Leppington Pastoral Company for comment.