An agency that collects money from the purchase of every recyclable beverage container has come in for criticism from Auditor General John Noseworthy. (CBC)

Newfoundland and Labrador's public recycling agency is sitting on a mountain of cash but is floundering in terms of how to use it effectively, a newly released audit suggests.

In a report released Wednesday, Auditor General John Noseworthy said the Multi-Materials Stewardship Board has a large and growing surplus — the audit pegged it at $18.6 million as of last March, with $12.5 million of that in a trust fund — but does little beyond reviewing applications to promote recycling.

The MMSB collects cash through every purchase in the province of recyclable beverage containers, and also runs a tire-recycling program it took over after private companies bailed on it.

"The MMSB does not appear to be proactive and other than reviewing applications for funding, the MMSB does not itself identify or pursue any significant waste management initiatives," Noseworthy wrote.

However, Noseworthy said the MMSB itself has been asking for government permission to take on work beyond its mandate, but to no avail.

Auditor General John Noseworthy said the MMSB is sitting on a trust fund of $12.5 million and does not have a plan for how to use it. (CBC)

"MMSB officials indicated that without clear policy direction from government, as MMSB has requested, they were not in a position to proceed with significant waste management initiatives," Noseworthy wrote.

Municipal leaders and environmentalists have criticized the MMSB for not using a massive surplus to help fund actual recycling programs. Instead, the government-appointed agency pays for things like commercials that encourage citizens to adopt a greener lifestyle.

Last fall, the City of St. John's deferred a city-wide curbside recycling program on grounds that it will be too expensive to implement during a cost-conscious year. At least one councillor has said the MMSB ought to be able to step in to help pay for ramp-up expenses in launching the initiative.

Noseworthy's report comes just days after a change at the top of the MMSB.

Last week, the government appointed civil servant Mike Samson to serve as the interim chief executive officer of the agency, after John Scott retired. Scott also chaired the board.

Noseworthy, meanwhile, said the MMSB has failed to meet its recycling targets, particularly over the tire-recycling project, which has been a boondoggle that successive governments have tried to handle.

"More than four years after MMSB took over the operations of the Used Tire Recycling Program as an interim measure, there is still no solution in place for the processing/recycling of used tires," Noseworthy found.

The agency has a target collection rate of 70 per cent of the used tires in the province, but managed only to collect 57 per cent of available tires.

Moreover, the agency is paying so much to stockpile 1.3 million tires, it "does not have the funds within this program to pay for processing/recycling," Noseworthy said.