Some organisations leasing NSW Crown land are more than 10 years late in paying rent and a dozen owe more than $100,000 each, according to a damning report on the management of the $12 billion public estate.

The report by NSW Auditor-General Margaret Crawford warns the lands department's "overall governance of decision-making for the sale and lease of Crown land is inadequate".

NSW Lands Minister Niall Blair concedes management of Crown land needs to be improved. Credit:Nick Moir

The department has "limited understanding" of whether tenants are complying with lease conditions, and decision-making is "not transparent".

Her report says 97 per cent of leases and 50 per cent of sales were directly negotiated during the past four years but a policy for doing so was only introduced in only March.