Victoria's auditor general has found mining sites that are poorly rehabilitated or not treated at all.

"If not addressed, these sites also present risks to Victorians and the environment," they warned in a report tabled in parliament on Wednesday.

Mining companies currently pay "rehabilitation bonds" at 1394 sites, including at sites across central Victoria.

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Miners give the bonds up front so that the state can pay for environmental works should companies fail to rehabilitate the land they want to alter.

The auditor general has found that nearly 89 per cent of mines and quarries do not have enough bond money to cover the state's costs.

Earth Resources holds $813 million worth of rehabilitation bonds, but says that could be at least $361 million dollars short of what is actually needed for every mine and quarry.

The auditor general has also found "systematic failures" in the way Earth Resources has policed environmental bonds, including a lack of enforcement activities, approving inadequately specified plans and failing to assure sites have been rehabilitated before returning money to miners.

The mining regulator also used outdated estimates to work out how much bond money would be needed the auditor general found. It is falling further behind in reviews of each bond, which it should be doing periodically.

Earth Resources executive director Anthony Hurst accepted all 10 of the auditor general's recommendations, including putting together a comprehensive inventory of all mines' and quarries' bonds.

"We welcome the Victorian Auditor-General's recommendations and will work with site operators and co-regulators to build on the actions we have already taken to overhaul the regulation of mine and quarry rehabilitation," he said.

Earth Resources released a new strategy for mine site regulation last February and the regulator says it addresses many of the issues raised in the newly released audit.

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The regulator has also agreed to help work out a new strategy for old mine shafts dating back as early as the 1850s, in partnership with the Department of Land, Water, Environment and Planning.

The auditor general found that neither department had thorough records about abandoned mines or other old sites across Victoria.

"There is no statewide approach to manage abandoned and legacy mines and quarries to reduce environmental, public health and safety risks," the auditor general found.

"There is also no agreement on which agency is in charge of overseeing the management of liabilities, including whether work had been completed to agreed standards.

"The result has been an ad hoc, uncoordinated and reactive approach to managing abandoned and legacy mining sites across the state."

Both departments have agreed to work on a framework for elected officials to consider.

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