The ACT government provides child protection, schools, courts and even driver's licences to the 400 or so residents of the Jervis Bay Territory over 200 kilometres away, as part of a legacy deal with the Commonwealth.

But a new report obtained under freedom of information showed that holes in the service agreement are having a negative effect on the predominantly Indigenous population, with confusion about who was responsible for what - sometimes among the agencies themselves.

The report, commissioned by the ACT and handed to the government last May, found Jervis Bay residents were having to travel to Canberra for simple court matters "with sometimes perverse outcomes".

While a video link was installed in the courtroom to allow the ACT's magistrates to deal with straightforward cases remotely, the area has poor internet and mobile phone reception.

"This appears to be also affecting the ability of the court system to successfully use the video link installed in the court house," the report said.

Furthermore, someone arrested in Jervis Bay and taken by corrective services to Canberra may not have a way to get back after being granted bail, or may be jailed at the Alexander Maconochie Centre away from family.

Even the Australian Federal Police felt that Jervis Bay Territory residents should have access to the Nowra Correctional Facility for both remand and incarceration, the report said.

"This would allow the family of detainees to easily see their family member, which in the view of the police is more often than not a benefit," it said.

Those given community orders can't be supervised in Jervis Bay, which the report said means offenders either face jail or are given sentences that do not make them aware of the consequences of their actions.

"This resulted in the same behaviour again and again until they received a custodial sentence. This is a poor outcome when other measures might have modified the behaviour," the report said.

There was also a case where the body of a dead Wreck Bay resident was taken to the Canberra morgue.

The resident's family could not get to Canberra, and it took "complex arrangements" to get the dead person home for burial.

"It would have been more efficient and a far better experience for the family if the Shoalhaven Hospital morgue had been used," the report found.

Legal Aid ACT also had to step in last year after NSW Legal Aid suddenly withdrew its services to Jervis Bay Territory.

Until that happened, the Commonwealth and the ACT government weren't even aware the service wasn't covered by the agreement.

"This is an example of service delivery arrangements without proper governance mechanisms in place, resulting in a gap in important services," the report said.

But the problems go beyond the justice system.

Children were "getting lost in the system" when they moved between the ACT-run Jervis Bay Public School and NSW's Vincentia High School, the report said.

While residents felt children were well-supported and achieved a lot at Jervis Bay Public School, Vincentia High School staff felt there were gaps in their knowledge and they needed more support.

"When asked why this occurs, a Vincentia High School staff member said it could be for a range of reasons including the curriculum differences between ACT and NSW," the report said.

There were no reliable transport or diversionary measures in place to stop young people getting off track.

And while Wreck Bay residents thought the ACT-based team that handled child protection matters was far better than previous arrangements, there is no early-intervention or family conferencing available in Jervis Bay Territory.

There's also confusion about whether ACT child protection workers had the authority to remove children from their families in Wreck Bay, as the Wreck Bay Aboriginal Community Council has the power to decide who comes onto the land.

"All community members the reviewer met raised the confusion they felt in relation to service provision because of the administration of Jervis Bay Territory by Canberra when they lived next door to NSW," the report said.

"They thought it was unnecessarily complicated and meant that they were ’missing out’ both ways; they couldn’t access services in NSW because NSW wasn’t funded for it and they couldn’t access services available in Canberra, which they were legally entitled to, due to the distance."

Jervis Bay Territory was surrendered to the Commonwealth in 1915 so the nation's capital would have a sea port.

But while the ACT government provides key services, and Canberra's laws apply, Jervis Bay Territory is not part of the ACT.

Instead, the ACT government looks after the territory as part of a fee-for-service arrangement which was inherited at the start of the ACT's self-government.

Because of this, Jervis Bay Territory has no voice in the ACT Legislative Assembly, although Canberra's Andrew Leigh is its residents' federal MP.

A 2014 report found the ACT was "not well-positioned to deliver state-type services to Jervis Bay Territory" due to the distance between the territories and the difficulties in achieving economies of scale.

Despite this, NSW pulled out of talks with the ACT and federal governments about taking over services to the community in 2017.