Victoria’s abandoned Commonwealth Games cost the state more than AU$589 million ($635m) and the price estimate that tanked the event was overstated and not transparent, according to a new report.

The state’s Auditor General’s Office says agencies failed to work together to give “frank, full and timely advice” to the government.

“The total cost of the Games to Victorians is over $589 million,” the report said.

“This waste would have been avoided if agencies had worked together better to give frank and full advice to the government before it decided to host the Games.”

In 2022 the Victorian government agreed to host the Games in regional Victoria at an expected cost of roughly AU$2.6 billion but pulled out in July 2023, saying the figure had blown out to AU$6.9 billion.

The report said while the initial budget was unrealistically low, the updated figure was overblown.

“The cost estimate for the Games that the government publicly released in August 2023 of AU$6.9 billion was overstated and not transparent,” the report said.

The auditor general’s office said the figure added significant amounts for industrial relations and cost escalation risks, and failed to disclose the original budget already included AU$1 billion to cover these and other risks.

The report found the Department of Jobs, Skills, Industry and Regions’ business case for the Games was inadequate for the state government to make an informed decision on costs.