Britain has threatened to withhold part of its funding for the organisation that runs the Commonwealth amid concerns about the way it awards contracts, the Foreign Office said on Wednesday.

It follows a similar move by Australia following an internal audit of the London-based secretariat, an administrative body which supports the 54 Commonwealth member countries.

The KPMG audit reportedly criticised Commonwealth Secretary General Patricia Scotland for awarding a lucrative consultancy contract to a company run by a friend.

The BBC said auditors also found the secretariat waived procurement rules on at least 50 occasions over three years.

A Foreign Office spokesman told AFP that Britain had imposed conditions on a voluntary contribution due around June or July, which was last year worth £4.7 million (5.6 million euros, $6.1 million).

This does not affect automatic contributions made by Britain and other member states.

"We are committed to an effective Commonwealth that delivers for its member states, so we have set a number of conditions on UK funding to the Commonwealth Fund for Technical Cooperation for this financial year," the Foreign Office said in a statement.

"These include conditions relating to ensuring that the secretariat's procurement policy and its implementation are in line with international best practice."

Australia has gone a step further by reducing its voluntary funding for the Commonwealth secretariat from $1.3 million last year to $500,000 this year -- and this is conditional.

"This new funding amount will be paid only after there is independent confirmation that the issues identified in the audit have been addressed by the secretariat," said a spokesman for the Department of Foreign Affairs and Trade.

In response, the secretariat told AFP it had accepted all six of the recommendations made by the audit, which looked at procurement between 2015 and 2018.

All but one had been implemented, and the last would be in place by the end of February, a spokesman said, without giving further details.

"The follow up audit, in April, will test and verify this position," he said. 

"We hope that the withheld discretionary funding... will then be reinstated, allowing the Commonwealth to continue delivering vital work on behalf of member countries."

Commonwealth nations are currently discussing Scotland's future as secretary general, with her first term due to expire next month.

British Prime Minister Boris Johnson's government has declined to publicly support her for a second term, saying only that it will be for the Commonwealth's heads of government to decide.

Leaders are due to meet at a summit hosted by Rwanda in June.