The Independent Commission Against Corruption says it has been plunged into a "funding crisis" and will shed 15 per cent of its staff after a "reduction in funding" by the NSW government.

The decision, ahead of the June 21 state budget, comes as the watchdog prepares to report on Operation Spicer, a major investigation into Liberal Party political donations rorts before the 2011 state election.

ICAC chief Megan Latham has warned of staff cuts. Credit:Peter Rae

ICAC commissioner Megan Latham wrote to the general secretary of the Public Service Association, Anne Gardiner, on Thursday outlining the impact of the decision.

In the letter, obtained by Fairfax Media, Ms Latham says Premier Mike Baird told the ICAC on May 24 that "at this stage, no supplementation will be made to the 2016-17 budget and forward estimate years".