Plans for 258 homes in Springtown stuck in the planning system
It looked at how the system has operated since 2015, when most planning functions were transferred from central government to local councils.
The report, published on Tuesday, found important planning applications are still taking too long to process.
Its authors said it posed a “cultural and practical challenge”.
The Audit Office looked at five planning applications that have suffered delay after delay.
One of them relates to Derry City and Strabane District Council.
Hartlands (NI) in partnership with Apex Housing first applied to build 258 houses in the Springtown area of Derry in early 2019.
It was refused in 2020, but the company applied for a judicial review of the decision and was successful.
The application is back with the council but the developer has suggested a decision had to be made to rescue the project because of the passage of time.
After the publication of the report, Auditor and Comptroller General Kieran Donnelly and local government auditor Colette Kane said: “The planning system in Northern Ireland is not currently operating as one system.
“Rather, there is a series of organisations that are not interacting well and not delivering an effective service.
“Addressing the issues identified in this report will be both a cultural and a practical challenge, demanding strong leadership.”
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