The NSW government lost $2.6 million in revenue from its Opal smartcards due to people throwing out cards with negative balances.

The state's audit office today released its report on the results of the financial audits of NSW government's transport cluster.

It found that the Transport department was continuing to lose millions in revenue from Opal cards in negative balances.

The amount of such cards increased from 363,000 during 2015-16 - a total of $1.3 million in lost revenue - to 776,771 during the last year, for $2.6 million in missed revenue.

For context, 5.9 million Opal cards were issued last year, compared to just over 4 million in 2015-16.

The cumulative balance of negative Opal card balances was $4.2 million as at June 30.

"If a passenger's card has a minimum value when they tap on they will be able to tap off and the card will go into a negative balance," the auditor noted.

"Revenue from unregistered Opal cards with negative balances cannot be recovered unless the passenger tops up the card."

There are no consequences for passengers who discard unregistered cards without paying for the remaining negative balance.

The auditor warned that lost revenue from negative Opal balances would continue to rise if this policy remained, and as passenger volumes increased.

While it noted that the $2.6 million figure represented only 0.2 percent of total annual passenger revenue, the NSW auditor said Transport should act to "prevent loss of revenue from passengers tapping off with negative balance Opal cards".

Public transport passenger revenue more broadly increased seven percent, or by $93 million, in the last year as patronage similarly rose by seven percent.

The state government stopped selling paper tickets for public transport in August last year, requiring all travellers to use either an Opal card or single use ticket.

It also changed the Opal fare structure last September to ditch free trips after eight journeys in favour of half price trips, and to allow a transfer discount between different modes of transport.