The Rudd government knew monitoring safety in the home insulation scheme would prove difficult before the program was even rolled out, an inquiry has heard.
The deputy director general of WA's Department of Premier David Smith has told a royal commission how the Commonwealth's ability to implement such a large program was a major issue that was never really addressed.
Mr Smith said the federal government was warned that the states and territories didn't have the regulatory framework to cope with the volume of insulation installations that would be driven by the program.
"Our existing regulatory regime (in WA) ... was not designed to deal with a program the scale of the HIP," he told the inquiry.
"It was an early and consistent message that was provided to me and conveyed to the Commonwealth."
Mr Smith said monitoring the standard of work being done under the program proved difficult.
"It was clearer by hindsight I guess but ... there were some pretty big warning bells," he said.
But under cross-examination by Commonwealth lawyer Tom Howe QC, Mr Smith agreed the concerns of the West Australian government were never expressed in writing.
"It may not have been documented in the clear way it should have, but the message was pretty clear," he said.
The inquiry has already heard how training requirements for installers were removed in the early stages of the program on the proviso installers would be supervised.
However, there was no way of ensuring onsite supervision was actually occurring.
The home insulation program ended up being flooded by low-skilled workers who only required a general safety induction before entering ceilings.
It has been blamed for the death of four young workers, one serious injury and more than 200 house fires.
The royal commission before Ian Hanger QC continues.