Victoria's health system has failed on patient safety - and the auditor-general says the department doesn't even know where it is failing.
Acting Auditor-General Peter Frost also found the Department of Health and Human Services failed to comply with its own patient safety framework.
"DHHS is not giving sufficient priority to patient safety," Dr Frost said on Wednesday.
His audit found systemic failures in the department, including a lack of effective leadership and oversight that posed an unacceptably high risk to patient safety.
It also found hospitals did not keep up to date with serious incident reports, so they could not tell where they needed to do better.
One case study looked at the Djerriwarrh Health Service in Bacchus Marsh, where at least seven babies were found to have died unnecessarily.
Dr Frost said concerns about the deaths went unnoticed because the system to collate them did not exist.
"Appropriate and timely action could have averted some of the serious consequences," he said.
Health Minister Jill Hennessy said Dr Frost's report reflected her own frustrations in trying to change culture in the department.
"I think the auditor-general rightfully expresses disappointment and anger, his criticisms do not come as a revelation to me," Ms Hennessy told reporters.
Dr Stephen Duckett has been appointed to run a clinical safety review of Victorian hospitals following the Djerriwarrh news.
Ms Hennessy said the report showed there had been a long term failure by bureaucrats to support hospitals with better data monitoring.
Department secretary Kym Peake accepted the report's recommendations and promised to start sharing key safety data.
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