The board of a popular Victorian alpine resort could be sacked for spending $85,000 of taxpayers' money on family trips overseas, entertaining friends, bonuses and extravagant staff prizes.

Key points: Mount Buller and Mount Stirling managers misspent $85,000 in taxpayer money

Mount Buller and Mount Stirling managers misspent $85,000 in taxpayer money The alpine resort board could be sacked for lack of oversight

The alpine resort board could be sacked for lack of oversight Money spent on staff bonuses, entertaining family and friends and expensive overseas holidays

A report by ombudsman Deborah Glass found Mount Buller and Mount Stirling managers created a personal playground on the public purse, including the board of management's chairwoman Jennifer Hutchison, who lived at the tourist resort during the 2014 ski season and entertained family and friends for free.

Environment Minister Lily D'Ambrosio has given Ms Hutchison and board members overseeing both mountains a week to show why they should keep their jobs.

"The actions and the lapses in judgement and oversight, detailed in this report, fall well short of the expected standards," she said.

"For the sake of procedural fairness the chair and all board members will need to show cause why they should not be removed from their current positions."

The investigation found chief executive John Huber spent more than $8,000 of taxpayers' money on primarily family holidays over two years.

Mr Huber spent most of his time at his family's lake house in New York State in the United States, not attending ski conventions on behalf of the resort, claiming the research and development provisions of his contract were designed to assist him with regular travel "to the US for holidays".

"While the charms of a lake house in upstate New York are undeniable, Victorians do not pay taxes to fund public sector employees' private holidays," Ms Glass said.

Almost $16,000 was spent on the property manager's family trip to the French Alps for "research and development" during the 2015 Christmas break.

Alpine resort managers created a personal playground while living on the mountain. ( ABC Open: sightseer56 )

The manager told the chief executive he believed it was appropriate for the resort to pay for his family's expenses "because we are a very family-oriented resort and it's important for us to experience this as a family".

The manager went on another research and development trip with his family to Jackson, Wyoming in December 2013, at a cost to taxpayers of almost $9,000.

The CEO also awarded $49,000 worth of bonuses to five staff who were not on executive contracts and were not entitled to them between the 2012-13 and 2014-15 financial years, the Ombudsman found.

Mt Buller resort 'not a private business'

The Ombudsman launched the investigation after the Independent Broad-based Anti-corruption Commission referred four whistle-blower complaints to Ms Glass about the misuse of public resources by senior managers.

"Mt Buller is no-one's personal playground. It is public property and its management is the temporary custodian," she said.

The chief executive has offered to repay the cost of his flights to the US, but the property manager has not agreed to reimburse the money for his family trip to France.

The Ombudsman has made 11 recommendations, including reviewing the governance arrangements of publicly-owned resorts and amending travel guidelines.

"There is a sound argument that a publicly owned tourist resort should embrace the best of the private sector when appropriate," Ms Glass said.

"But it must also never forget that it is not a private business. It has a responsibility to the public when it comes to spending the public's money."