The Department of Home Affairs has agreed to review its systems after an automated process led to the unlawful cancellation of a man's visa, a damning report has revealed.

Commonwealth Ombudsman Iain Anderson lambasted the department over its decision and warned all public servants they must be prepared to challenge automated decisions.

The ombudsman found Home Affairs "acted unlawfully and unreasonably" in its dealings with the man, causing him and his family financial hardship.

The department agreed to the ombudsman's recommendations, which included apologising to the man, offering compensation and reviewing its procedures.

Home Affairs secretary Stephanie Foster admitted the department had acted unlawfully; however, it took her several weeks to do so, emails show.

The report de

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