Alan Horgan says site visits are not conducted as often as they should and the department is not doing enough to ensure the security deposits it holds would cover potential reclamation costs.
The acting auditor general says in a new report the department hasn't even developed guidelines for estimating reclamation costs.
Horgan also says the department did not ensure that lease rental payments due for 2012 and 2013 were received as required and there is no process to ensure royalty payments are correct.
Without adequate verification, Horgan says the department may not be receiving full compensation for resources mined in the province.
The department says it will make the 20 changes recommended in Horgan's report.