The government-owned company rolling out the NBN is not fixing service faults on time, the national auditor says.
The NBN Co also didn't have any processes to find out the root cause of frequent complaints, the report tabled in parliament on Monday says.
The auditor-general recommended the company set up better monitoring processes and review its complaints process.
"Entities should regularly monitor and analyse the complaints they receive in order to understand any trends or systemic issues that may be occurring," the report said.
However, the auditor said NBN Co didn't count delays when a user missed their appointment with a technician at home, which meant it could be taking even longer to resolve complaints than NBN Co was claiming.
Complaints that took longer than NBN Co's timelines to resolve often dragged out, the auditor said.
It found NBN Co's complaints handling processes didn't align with the telco industry standard but this was not mandatory for the utility.
Overall, it found the number of service disruptions within 30 days of connection was dropping even as the number of new connections picked up.
The report said the NBN Co didn't have controls or treatment actions in place to fix problems with moving houses onto the network.
It was also found to have inconsistent records on its meetings with telcos.
NBN agreed to all three of the auditor's recommendations.
"We welcome the overall positive conclusion that NBN Co's operations in relation to support service continuity in the migration of telecommunications services to the NBN access network was assessed as largely effective," it said.