An office that Premier Christy Clark created to audit city governments is mired in dysfunction and confusion, according to a leaked report from the province's human resources department.

The report, brought to the legislature Monday by the NDP opposition, comes on the heels of NDP accusations last week that the office has blown $5.2-million and done only one audit in its two years of existence.

The leaked "work environment review," done in January on the operations of the Auditor-General for Local Government, said that the 10-person staff in Surrey is struggling to figure out what the office's priorities are and how to meet timelines.

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"Almost all employees shared examples of preparing work based on direction to find out that the direction had shifted and the work wasn't needed," said the report, done in January by Shelaina Postings, the government's director of strategic human resources. The review appeared to have been initiated because of unspecified workplace "issues."

Ms. Postings's review also found that staff were spending so much time in meetings talking about how to maximize the number of audits done that it was interfering with their ability to do any work. And they complained that "it was often unclear who was responsible for various pieces of work."

Ms. Clark announced in November, 2011, shortly after municipal elections, that she would create an auditor-general to scrutinize municipal spending. There had been no recent public case of wild overspending, but the Canadian Federation of Independent Business had been making the case for years that increases in municipal budgets were far outstripping the rate of inflation.

NDP Leader John Horgan said Monday the report is proof that the Liberal government was more interested in putting on a show about accountability than anything else.

"This is not good value for money."

Community and Development Minister Coralee Oakes defended the office repeatedly as she was grilled during Question Period.

"We identified that we are disappointed with the amount of audits that are being performed," said Ms. Oakes, reminding people that there are many more in the works.

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"Again, I will remind you that, in order for any auditor to be effective, it needs to be an independent body from politicians."

In the past two years, the office has done one audit – a look at capital procurement and asset management that focused primarily on the small town of Rossland and its arena roof replacement.

It has six more audits planned for general issues, such as managing police agreements, oversight of building permits and inspections and local government's role in ensuring clean drinking water. Each audit will involve looking at a small subset of municipalities and how they deal with those issues.

The leaked report comes as many levels of local government are feeling particularly hard hit by Ms. Clark's Liberals.

School boards were recently ordered to trim $29-million out of their budgets, on provincial orders.

Lower Mainland mayors and councillors are spending most of their time these days trying to persuade angry residents to vote Yes in the impending transit plebiscite, something Ms. Clark also insisted they hold.

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And those same politicians, along with others throughout the province, are still irate about the auditor-general's office that the Premier claimed was needed to monitor their spending.

"It became what I expected – a bit of a bust," said Surrey Councillor Barbara Steele, who was president of the Union of B.C. Municipalities when the office was first proposed.

She and many others objected strongly to the creation of a new auditor-general role, which has been taken on by Basia Ruta, a chartered accountant. "There didn't appear to be any real reason for it. Nobody really knew what her job was."

Ms. Steele and many others said city activities are the most transparent and best scrutinized of any level of government, because the public can go to any meeting and track what is being decided.

Mr. Horgan said the office, along with the referendum and the school-board cuts, is part of a pattern.

"I would argue junior levels of government are truly in the crosshairs of the Liberal government."