The Auditor-General has revealed that the New South Wales Government has made a $1 billion mistake in its sums, and the budget is actually in surplus.

Peter Achterstraat's audit of the state's finances found that data entry errors, mistakes in spreadsheets and poor reconciliations were responsible for much of the disparity in projections.

There were 37 errors of more than $20 million each.

When the Treasurer Mike Baird delivered the budget in June, he forecast a deficit of $337 million.

But Mr Achterstraat says with the corrected figures, the budget is in surplus by $680 million.

He says the poor accounting is not acceptable.

"For a number of years I've been concerned about the quality of the financial accounts coming from the departments into Treasury and this year I guess I'm coming to the end of my tether," he said.

"The forecasts need to be tightened up, the mistakes need to tightened up.

"The NSW Government is a billion-dollar business, it's not a school tuck shop."

The State Government delivered what it called a 'tough' budget in June, with $1.24 billion in cuts and thousands of job losses in the public sector.

The Auditor-General would not say whether he thought the mistakes were the result of a stretched public service, even though redundancy payments were five-times that of the previous year.

But he says the Government may have made different budget decisions if it had the correct figures.

"It's a bit like a cricket match - if you've got five overs to go and you think you only have to get X number of runs and all of a sudden you're told you've got to get five times that, it's very different," he said.

The Treasurer faced a barrage of media questions today on whether he would have held off on the cuts if he had known about the money.

Mr Baird defended his course of action.

"We haven't returned to a sustainable surplus," he said.

"There is more work to do and we will take the actions necessary to actually achieve that."

But the Opposition Leader John Robertson says the Government can no longer justify the deep cuts to health and education.

"This is a Government that's mismanaged the budget in five months by $1 billion," he said.

"We're seeing cuts in education, we've seen cuts where pensioners are being made to suffer, we're seeing longer waiting times in our hospitals because the O'Farrell Government cannot manage its own finances and is doing this out of pure ideology."

Greens MP John Kaye says the Government should look at whether public sector cuts caused some of the accounting errors in the first place.

"Perhaps what we're seeing in that billion dollars is simply a lack of capacity to keep the books," he said.

"The O'Farrell Govt has created a so-called leaner public service," he said.

"Maybe what we see now is it being cut below its capacity to keep the sort of data that's needed to make good public sector decisions."

The Auditor-General says better trained staff and improved systems are needed to prevent accounting mistakes.