The federal government has failed, time and time again, to take measures that would improve the quality of life for First Nations, says the auditor general in a new report.

The basics of life -- education, child welfare, clean drinking water and adequate housing -- are persistently and dramatically substandard, and in some cases deteriorating, says the report.

A true fix, however, requires more than tinkering with policies and implementation of new processes, the report warns. Instead, a complete overhaul of federal tools and increased participation of First Nations themselves is necessary.

"I am profoundly disappointed to note ... that despite federal action in response to our recommendations over the years, a disproportionate number of First Nations people still lack the most basic services that other Canadians take for granted," former auditor general Sheila Fraser says in her parting words to Parliament.

"In a country as rich as Canada, this disparity is unacceptable."

The report was prepared by Fraser, but tabled by interim auditor general John Wiersema since Fraser's term has come to an end.

Fraser's team went over all 16 of her audits of First Nations policy from the last 10 years, and then went back to government to see how well officials had lived up to their key commitments to make improvements.

In many cases, she found, little effort had been made to make changes. In cases where new strategies had been introduced, progress was difficult to note.

On education, the gap between First Nations students on reserves compared with other Canadians has been growing, the auditor general finds. In the general population, the proportion of students who graduate from high school has risen steadily. But among First Nations, fewer than half are graduating, and improvements seem to be a long way off, the report says.

Funding formulas are based on 1980s information, and strategies for improvements have been left unimplemented or applied unevenly.

Indeed, the audit was released at the same time as a coalition of First Nations representatives and child advocates are presenting a report to the United Nations, asking that body to intervene in Canada under the Convention of the Rights of the Child, to ensure that each reserve has an adequate school.

"We know that the law says that the same standards of education must apply to both on-reserve and off-reserve schools. We also know that no off-reserve community would tolerate the shameful conditions under which we receive our education," the team says in its complaint to the UN.

On housing, the audit points out that the shortage of adequate shelter has increased, while conditions in existing housing have deteriorated. Rampant mould problems have been met with an information campaign on websites and pamphlets, rather than actual help or funding to eradicate the harmful spores.

When it comes to drinking water on reserves, the federal government has drafted legislation to ensure its safety, but concrete changes are years away, the report warns.

In the meantime, water quality testing is only being done sporadically, and key information is not being shared. More than half of reserves' drinking water systems are at risk, the report said.

On child welfare, Ottawa has not yet determined how to make sure children on reserves receive the same quality of services as other children, the report said. But the audit did give Aboriginal Affairs credit for properly funding its programming.

After paying close attention to First Nations' issues for a solid decade, Fraser says she has concluded that a radical fix is needed.

"In our view, many of the problems facing First Nations go deeper than the existing programs' lack of efficiency and effectiveness."

Progress is blocked by the fact that there is no legislation defining the level and range of services the federal government is responsible for, she says.

Funding arrangements are based on annual contribution agreements that make it hard for communities to know if they will receive timely and stable financing. And most First Nations bands don't have the school-board or health-board infrastructure that other communities rely on to support delivery of key services.

Governments at the provincial and federal levels, as well as First Nations themselves, need to hash out a better way to co-operate and deliver the basics, Fraser warns.

"Unless they rise to this challenge, however, living conditions may continue to be poorer on First Nations reserves than elsewhere in Canada for generations to come."