Staff who resigned received excessive entitlements.
As well, assets worth A$40,000 went missing.
The Papua New Guinea Government subsequently paid back the money in 2012.
Details of the case and others elsewhere in the region have come to light after the department disclosed them on its website in response to a Freedom of Information application.
In a ministerial submission in October 2013 the department insisted there were strong measures in place to combat fraud and corruption risks.
“Levels of fraud against the aid programme are low,” it said.
Potential losses in 2012-13 were A$706,290 or 0.014 per cent of the total aid programme.
But Foreign Minister Julie Bishop was not impressed and hand wrote her response: “$700k lost to fraud is $700K.”
Afghanistan scholarships programme: Two Afghan staffers had sought bribes from applicants. Ten scholarship awardees were asked to make payments in cash or mobile phones. Australian Government sought to recover losses.
Solomon Islands health programme: Inflated invoices for freight services totalling A$1.5 million ($1.6 million). Solomon Islands agreed to recover money.
East Timor peace building project: Local NGO director and finance manager withdrew programme funds of A$44,480 for personal use.
Somalia stolen food: 178 tonnes of food worth A$87,150 donated by the Australian aid programme was looted in 2011 in Mogadishu.
PNG HIV Aids prevention campaign: Subcontractor did not deliver on SMS campaign as stipulated in their contract. Australian Government seeking A$56,483.
PNG law and justice partnership: Potential loss A$91,592.