Unplanned outages at the facilities which supply the health sector with radiopharmaceuticals used to diagnose heart disease and cancer are costing taxpayers $1 million a week.
An audit report looking at the Australian Nuclear Science and Technology Organisation found its management of nuclear medicine assets to be "partly effective" and made a number of recommendations for improvements.
ANSTO supplies about 80 per cent of Australia's nuclear medicines, mainly relying on three facilities built between 1959 and 2018 worth $1.3 billion.
However, a range of factors have meant it only achieved 56 per cent of its production target in 2018/19, 27 per cent in 2019/20 and 59 per cent in 2020/21.
ANSTO attributed the shortfalls to mechanical breakdowns and equipment defects, a delay in a new facility starting, the COVID-19 pandemic and limits placed on a 63-year-old building.
The audit, tabled in federal parliament on Tuesday, found since 2017 there had been a number of safety, mechanical and quality failures including serious radiation contamination incidents, a finding of non-compliance with health procedures and a chemical spill.
"Operational failures in ANSTO nuclear medicine assets have consequences for human safety, ANSTO financial sustainability and the security of domestic nuclear medicine supply," the audit found.
The report noted ANSTO had estimated in June 2021 the average cost of unplanned outages to be "approximately $1 million per week".
"In 2019/20 ANSTO's own-source revenue was $87 million ($48 million less than budgeted) and in 2020/21 it was $111 million ($5 million less than budgeted)," the report said.
The impact on patients from shortages could include cancelled procedures, delays in diagnosis and treatment, and disruptions to research trials, the auditor-general said.
ANSTO agreed with the report's findings, which included replacing its current strategic asset management plan and amending its public performance measures.
"This audit and its outcomes have provided ANSTO with an opportunity to continue its improvement of the management and maintenance of our significant capital portfolio," the commonwealth entity said.
"As the operator of Australia's only nuclear reactor and supporting infrastructure that manufactures 75-80 per cent of Australia's nuclear medicine ANSTO understands the importance of effective management of those assets.
"As part of this commitment and established culture of continued improvement, ANSTO has commenced planning to address each recommendation."
The federal government has committed $500 million to 2024/25 for ANSTO to fund operations, maintenance, waste management and decommissioning.