A scathing investigation by Victorian Ombudsman Deborah Glass has suggested senior government management at Mount Buller and Mount Stirling have been using the ski resorts as a "personal playground".

The board members have now been given seven days to "show cause" why they should not be sacked.

The report said the resort's chief executive used taxpayer's money to pay for flights for himself and his family to the United State for what was "primarily" a holiday.

It also found the board of management chairperson misused resources at the Mount Buller resort by living in publicly owned ski accommodation intended for officials, and allowing family and friends to stay without payment.

Jennifer Hutchinson is the chairperson of the Mount Buller and Mount Stirling Resort management board and John Huber is its chief executive.

The chief executive, who is paid more than $200,000, claimed so-called "research and development" provisions in his contract existed to assist him with regular travel "to the US for holidays".

In a withering assessment of this claim, Ms Glass said: "While the charms of a lake house in upstate New York are undeniable, Victorians do not pay taxes to fund public sector employees' private holidays."

Responding to the draft version of the report, the chief executive justified the trip claiming his salary was below what he could get elsewhere, suggesting the "research and development" facility had been included as a top up. "The remuneration I receive as the CEO falls short of the remuneration I could command elsewhere," he said.

He has now promised to hand back $4435.

The report said public funds had also been used to pay for the resort property manager's family travel and accommodation in the French ski fields, also for "research and development" purposes. His lawyers have told Ms Glass the money will not be paid because it would be a breach of "procedural fairness".

"Mt Buller is no one's personal playground; it is public property and its management is the temporary custodian," Ms Glass said.

More than $30,000 of public money was spent on international family travel, entertaining the chief executive's friends, and the provision of prizes to staff including flights and accommodation to interstate tourist destinations.

In one email to a former business associate, quoted in the report, the chief executive insisted on offering a former business associate and his family free holiday accommodation.

"I will be completely offended if you don't let us look after you," the email says. "You tell me the dates that you want to be up and I'll lock something in for the clan. I have a range of apartments."

The report said a further $49,000 had been spent on staff bonuses "without adequate justification or transparency".

The investigation was launched after the Independent Broad-based Anti-corruption Commission handed over to Ms Glass four protected whistleblower complaints detailing a litany of allegations, including one instance where the chief executive used his corporate credit card to purchase tyres for his car worth $1500.

Environment Minister Lily D'Ambrosio, who has overarching responsibility for the state's alpine resorts, said she had written to the board members expressing disappointment in their performance. Ms D'Ambrosio has now given them seven days to "show cause" why they should not be sacked.

"The government is currently considering a new governance model for the Alpine sector and the lessons learned from this review will be considered in shaping the new model," she said.

This is not the first time senior government figures have landed in trouble over the state's alpine resorts. In 2007 it was revealed that deputy premier John Thwaites had been given free mountain accommodation at Falls Creek from a board of management appointed by him.

That followed a 2007 auditor-general's report finding dubious expense claims by senior staff and board members at Victoria's alpine resorts, including a $1100 expense claim by the then chairwoman of the Fall Creek resort to attend a Labor Party fund-raising event.

Ms Glass has now recommended a sweeping overhaul of the governance arrangements for all five of the state's ski resorts.

"There is a sound argument that a publicly owned tourist resort should embrace the best of the private sector when appropriate," Ms Glass said. "But it must also never forget that it is not a private business. It has a responsibility to the public when it comes to spending the public's money."

The opposition leader Matthew Guy called for a police investigation.

"Those matters are a disgrace. If there are people who have been abusing the system of taxpayers' funds to that extent than they should be referred to Victoria Police," he said.

Mount Buller declined to comment.