A report on New Zealand on Air support for the music industry has pointed to lax oversight at the broadcast funding agency and recommended more audits.

The report was commissioned by NZ on Air and did not comment on criticism about the oversight of the schemes.

Read the report here.

But author Chris Caddick said that the funder was perceived as being easiest and most relaxed government agency for funding music.

"There was a general degree of uneasiness that New Zealand On Air's relaxed approach could potentially lead to misuse and wastage of fees," he said.

The funding body played down criticism.

It said the music industry was made up of disparate groups of people competing for a limited pool of funding.

Chief executive Jane Wrightson said much of the criticism of processes dated back to before tightening of the album funding scheme last July.

"We tightened things up. If people want things to be tightened further we will do that," she said.

But Jane Wrightson was confident that NZ On Air's processes had not been deficient and that not led to misuse or waste of public money.

NZ On Air had conducted audits in the past and would continue to do so when it was notified of issues, she said.

The Caddick report was released three days before Christmas, around the time politicians traditionally dump bad news to avoid bad publicity.

But NZ On Air said the yuletide release was to encourage discussion over the holiday break - not to avoid negative publicity.

Wrightson said the funder broadly agrees with the study's findings and will be working on a major overhaul of its music schemes by the end of its financial year in July.

But criticism of NZ On Air is unlikely to fade away with debate growing about taxpayer subsidies to creative industries.

Ostensibly the aim of NZ On air funding is to increase airplay to promote local content and New Zealand culture and identity.

But there has long been a debate on the degree that NZ On Air funding is so focused on commercial radio that it has evolved to taxpayer support for the struggling record industry.

Commercial radio and corporate record company say airplay means local content gets heard.

Critics says it has allowed NZ On Air to avoid riskier acts, and become a slave to the agenda of the record and radio industries, The role of the government agency's NZ music manager and its influence on bands funding has also been criticised - though that is not addressed in the report.

The report recommends emphasis to be moved from commercial radio to online.

It recommends merging the albums scheme - representing one third of its music budget - with music videos and new music.

NZ On Air says it has yet to decide the new shape of music funding, but
even before release of the report it had made a key decision.

Its controversial album funding scheme - highlighted by the $50,000 grant to Annabel Fay's record company accounts for one third of NZ On Air's music support.

Total funding for the making and marketing of albums committed to date for the eleven years 1 July 2000 - 31 December 2010 of $10,049,875 towards 218 albums.

It will be scrapped on July 1, though until then NZOA expects will continue to pay $50,000 to another 16 albums under the flawed scheme.

That amounts to $800,000.

The NZ on Air board scrapped the scheme in December amidst controversy over an allocation to Siren - the record company for Fay.

While eligible for money, the allocation highlighted anomalies with taxpayer backing for Fay's career while her multimillionaire family had paid for lavish entertainment of radio DJ's on their island hideaway.

Music manager Brendan Smyth was among guests flown in by Fay's helicopter for the party.

Caddick - a former chief executive for EMI New Zealand chief executive Chris Caddick talked widely with the music industry for the long delayed report.

He said he interviewed 100 music and broadcast professionals and assessed a further 655 responses from an online public survey.

"I sensed a strong desire for more stringent checking both before and after the granting of funding,"he said,