A report by Auditor-General Margaret Crawford also found the ban on flammable aluminium cladding has no effective enforcement or compliance strategies.

Following the 2017 fatal Grenfell Tower fire in London the NSW government increased efforts to identify buildings that featured combustible cladding, with a 10-point plan that included the creation of a Cladding Taskforce.

Ms Crawford reports the government has likely identified most - if not all - of the affected buildings, as the rate at which new buildings are being added to the register is falling.

But she recommends improving the government's data to provide a complete history of the identification, risk assessment and remediation of buildings by December.

The government also needs to address confusion about the ban, which depends on how much plastic is contained between the aluminium sheets used in cladding and the risk it poses.

Buildings already occupied before the ban came into force in 2018 are not automatically required to remove the cladding.

That created confusion for building and strata managers, some of whom thought there was a blanket ban on the material and it would have to be removed, when councils and government departments could still allow for the cladding to remain, depending on the fire risk.

Earlier intervention and more specific guidance from the taskforce would have helped local councils better understand the ban, but the government also copped criticism for not enforcing it, despite it being an important part of its commitment.

"We found (Department of Customer Service) had no compliance or enforcement strategies or policies for the product use ban," the report says.

Ms Crawford recommends the cladding taskforce develop an action plan for remediating buildings that have been identified as low-risk, taking into account both the cost of remediating buildings and the risk of not doing so, to help address the confusion.

Approximately 1200 buildings have been referred for further investigation by local councils after it was identified they may have a high risk of fire, however only about 40 per cent of them have either been remediated or assessed as safe.

About half of the 66 NSW government buildings identified have been remediated or assessed as safe, while about 90 per cent of the 137 buildings investigated by the Department of Planning and Environment were fixed or found to be safe.

The department had adopted a rigorous process to ensure building owners addressed the risk, featuring multiple levels of risk assessment and mitigation as well as peer review of independent accreditations, Ms Crawford said.

Fair Trading Minister Eleni Petinos is reviewing the report and has asked the cladding taskforce to make the recommended improvements where possible, but it will not be an overnight fix.

"Clearing and remediating cladding is a highly complex job that must be done right the first time and in collaboration with a wide-range of stakeholders including councils, homeowners and consumers," Ms Petinos said.

With differing achievements among local councils and the department, Labor's better regulation and innovation spokeswoman Courtney Houssos has called for a central government agency to take up the task, similar to the situation in Victoria.

The report showed the government's response had been slow and haphazard, she said.

"The government hasn't co-ordinated a proper response ... they have been pushing it back onto councils to do the work, they've been pushing it between departments, they haven't had a clear response to this huge problem," Ms Houssos said.

Australian Associated Press