Dr Cooper pointed especially to fire risk from recreational users of the catchment and the unmanaged growth of pine wildlings and fine forest in the area. The Blue Range, especially, was rated an extreme fire risk.

"The [catchment] is exposed to significant risks, which are interrelated and which, under adverse conditions, could accumulate and lead to a catastrophic failure of the water catchment," she said in an audit report.

"The ultimate risk is of the movement of large volumes of unmanaged sediment from unstable soils into the reservoir. Wildfire is a significant risk, which will increase with climate change and requires persistent and effective management efforts. The controls which regulate public access to the [catchment] are inadequate; increasing the risks of fire, landscape damage and erosion. If a fire were to occur and if it was followed by a heavy rainfall event(s), then there is a significant risk that the undermaintained, and the damaged, sediment control structures would be overwhelmed and ineffective."

Dr Cooper said since the 2003 bushfires, major restoration had been done in the catchment, which now contained one-quarter of the territory's drinking water supply.

Revegetation had been effective in steadily improving water quality and reducing sediment and turbidity. But there were still problems after heavy rainfall because of unstable soil and erosion in parts of the catchment.

There had been no high-level co-ordination of the catchment since 2009. It was not evident that the four agencies involved - the Environment and Planning Directorate, the Environment Protection Authority, Icon Water (formerly Actew Water) and the Territory and Municipal Services Directorate - had a shared knowledge and no overarching process for risks was in place.

Priority must be given to inspection and management of erosion control. The fire trail should be reviewed, as should the three areas of pine plantation that had been left unmanaged and now presented a fire risk, especially the Blue Range. Priority should also be given to controlling pine wildings and blackberry, and better controls were needed over public access.

Seven years after the catchment became public land, there was no plan of management, as required by 2007 legislation, and the territories department was significantly overdue on the important document, she said. Nor had the Code of Forest Practice been updated, as required.

A code of practice for maintenance required Icon Water and the parks and conservation service to prepare an operations plan each year and submit it to the other party. This did not happen.

Water quality consultant Dr Ian Falconer had inspected the catchment in October 2014 and found gully and surface erosion "with no visible present attempt at control or remediation". Gully erosion was an intractable problem in the very unstable soils of the lower Pierces Creek area, he had found.

He had also drawn attention to the need to manage pine wildlings and regrowth pine forest.

Among Dr Cooper's three high-priority recommendations were calls for new catchment management co-ordination and decision-making arrangements for the Lower Cotter; for a cross‐agency risk-management process; and for

Territory and Municipal Services Minister Shane Rattenbury said $7.8 million would be spent on the catchment over four years, as part of next month's ACT budget.

A total of $2.6 million would go to ensuring water quality was not compromised by erosion and sedimentation, feral animals or anti-social behaviour and $5.1 million would go to fire-management activities.

"The ACT government will give serious consideration to the [auditor's] findings and recommendations," Mr Rattenbury said.

"However, some of the issues identified in the report have already been recognised and the 2015-16 budget boost serves to provide the capacity to start this important work."