Governments are not monoliths. They can both do good and bad. Sometimes at the same time.
This audit was done to see if TrueCrypt is secure for Government use: Some cryptography solution used by German federal institutions uses parts of TrueCrypt, and thus the BSI (Bundesinstitut für Sicherheit in der Informationstechnologie/Federal institute for Security in Information Technology) ordered this audit to see if the solution is secure for their use.
Thus in this case the interests of the Government and the public are the same.