More than 38,000 air travellers entered Australia over a nine-month period with high-risk biosecurity material going undetected.
The auditor-general on Monday issued a scathing report card on the federal agriculture department's handling of the biosecurity system.
The report found in the first nine months of 2019/20 an estimated 38,200 air travellers entered Australia with undetected high-risk biosecurity material.
"The Department of Agriculture, Water and the Environment's arrangements to respond to non-compliance with biosecurity requirements are largely inappropriate," the report found.
"The department's compliance framework is largely inappropriate.
"There is no framework to assess risk across the entire biosecurity system and target regulatory actions accordingly."
The audit found arrangements to detect non-compliance were partially appropriate, but departmental estimates indicate undetected non-compliance was increasing.
The department has agreed to all eight recommendations from the auditor-general, including better use of intelligence and computers and an improved risk management framework.
As well, it agreed to look at the better use of tools to respond to non-compliance including monitoring and investigation powers, education, suspending or revoking permissions, civil sanctions and criminal prosecution.
"The department recognises there is a need to mature our regulatory capability to meet new and emerging challenges," it said in response to the report.
"Substantial progress has been made to implement a suite of regulatory practice improvements, and the federal government's 2021/22 budget biosecurity package will further support the department to enhance its biosecurity functions including its compliance program."
The department said Australia's biosecurity system had served the country well, protecting agriculture, the environment, and people from threats including African swine fever, foot and mouth disease and hitchhiker pests.