The C&AG annual report also revealed gardai are investigating the disappearance of dozens of artworks worth over €500,000 from Killarney House, after two paintings were put up for sale in an art auction.
The paintings had reportedly been locked away in private storage.
A total of 39 items, including 26 paintings are missing from Killarney House, and their disappearance remains under investigation by gardaí.
The State acquired Killarney House and the greater part of the adjoining estate in Kenmare in 1978 and the former owners had lived there until 1998.
The State then assumed control of the house which has since been unoccupied and is undergoing €8.5m restoration works.
The contents of Killarney House had been fully catalogued in 1999, ahead of this restoration works, with some works placed in private storage while others were placed in storage in nearby Muckross House.
However, in October 2012, two of the paintings that had been put in private storage appeared in an auction.
The paintings, both valued at €32,000, were recognised by government staff and prompted an examination of all the items in storage by the Department of Arts, Heritage and the Gaeltacht.
That examination found that 39 items, including all 26 paintings, were missing and that the total value of the missing items is €552,000. The gardai subsequently launched an investigation.
The C&AG report notes while some of these items have been recovered, the department has not identified which artworks have been found, following garda advice.
The C&AG warned the “basic requirements for the preservation, control, and management of heritage assets were absent” in two of the buildings it examined under control and management guidelines.
It has advised that such assets should be recorded centrally to ensure they are properly controlled and safeguarded.
The C&AG also found there was no disaster response plan in place for the department’s storage facility to ensure the protection of heritage assets in the event of fire or flood.
The report stated that the department had discussions with the National Museum of Ireland with a view to formulating such a plan.