An independent review of OneCrown, the organisation that runs Sydney's crown cemeteries including Rookwood, found urgent action was needed to address "considerable" gaps in its governance framework.
OneCrown launched by the Berejiklian government in 2021 in a bid to merge NSW's five large crown cemetery operators and ward off financial collapse.
But indecision on the project's future has left each operator having to maintain separate finance, HR, and payroll systems, heightened staff uncertainty and halted key investment decisions, the review released late on Monday.
"Delay will further inhibit the ability of OneCrown to realise its strategic objectives and potentially increase the risk that the Crown may not be able to adequately provide for the burial needs of residents of Sydney and surrounding areas into the future," the review by O'Connor Marsden and Associates said.
"There are key investment and organisational decisions that cannot be taken in the absence of a government decision."
The operators, who run cemeteries on crown land, Northern Metropolitan Cemeteries, Rookwood General Cemeteries, Rookwood Necropolis and Southern Metropolitan Cemeteries, held collective debts of more than $300 million in 2021.
Since then, OneCrown has taken numerous steps to amalgamate operations, including moving investment funds to other government entities and creating a single strategy.
But the report said 43 per cent of projects are marked "off-track" or lacking information and more work was needed to boost low staff morale
Executives and the OneCrown administrator had outlined cultural problems and infighting in the Southern, Northern and Rookwood land managers "including systemic bullying", the report said.
About 33 per cent of staff had exited the organisation in the past 12 months, compared to an attrition rate of 8.7 per cent across the NSW public service sector.
"Delayed decision regarding a potential amalgamation was cited by many staff as a contributor to low morale and many staff spoke of a deep sense of change weariness and disengagement in the absence of a decision," the report said.
The responsible minister, Steve Kamper, blamed years of procrastination by the former government and promised to take action swiftly.
A nationwide recruitment process began last week for a new administrator and an audit into the supply of cemetery space in Sydney will be conducted.
"We are not trying to paper over the cracks, we are here to fix the foundations," the lands and property minister said.
"That starts with ensuring you have the right people in the job, it means listening to expert advice, implementing recommendations and fixing the problem."
The contract for the current administrator, who is also effectively filling the vacant chief executive role, expires in May.
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