The Auditor General's performance audit into the failings of the Community Sport Infrastructure Grant Program has led to a ministerial resignation and a parliamentary inquiry. The media melee prompted by the 'sports rorts' affair has focussed on political corruption of process, with a concentration on the role of ministerial advisers. This is only part of the story. This article argues that on this occasion the Australian Public Service (APS) did not acquit itself well, and that the affair was triggered by an administrative failure to advise on threshold legal and procedural issues: what is termed the 'traffic light' role of a professional public service. The article considers how such policy advice failings may have occurred, and whether APS performance in this instance is an indicator of declining institutional capacity.