"I've had creditors tell me that's exactly what's happening - that they have had goods ordered, then, when they've gone to get money from the invoices, the hospital says, 'oh no, we haven't got a record of that'," Mrs Skinner said. "Then they go through this whole process of months of delay."

Mrs Skinner said the health service's actual debts were worse than the report showed because overdue wages weren't included, and because "the area health services have always had this trick of paying off bills by June 30 and then letting them pile up again".

She condemned the region's lowly spending on maintenance - 0.8 per cent of gross asset values, less than half the benchmark 2 per cent and below the 1.1 per cent state average.

"It means that the buildings and the equipment are not up to scratch and, in the end, the repair bills end up greater than the cost of maintaining them," she said.

Within South Eastern Sydney Illawarra bed occupancy increased by 2.4 per cent to 93.3 per cent - the highest in NSW and well above the "safe" benchmark (85 per cent) or the state average (87.4 per cent).

Statewide, the report found many services still have trouble paying creditors on time.

Only two of the eight health services paid creditors within the 45-day target last financial year, despite promises from former health minister John Della Bosca he would fix the problem.

The audit also found emergency departments were failing to meet some treatment benchmarks, hospital waiting lists had blown out from 58,173 people to 64,512, while only one service had done a proper stocktake of its equipment.

Complaints to the Health Care Complaints Commission rose 23.4 per cent, while more than $500 million in equipment was past its use-by date.