The NAO research states that 91 per cent of all government projects - new buildings and major refurbishments - during 2005-2006 failed to meet the required standards set by the government itself.
The paper added that only 38 per cent of new government buildings scored an 'excellent' rating and just 44 per cent of refurbishments scored a 'very good'.
The problem, according to the NAO, is that policy among government bodies is too fragmented, and it also claimed there is a perceived conflict between sustainability and value for money.
Another issue highlighted was an apparent lack of sufficient knowledge and expertise in sustainable procurement among government staff.
General auditor John Bourne said: 'When I last reported on construction in 2005, I emphasised the need to consider both the costs and benefits over the whole life of a building, not just the initial capital required.
'Despite this, the report highlights a continuing failure by departments to consider the long-term value of sustainability in their new builds and refurbishments.'
He added: 'Government departments and agencies spend in the region of £3 billion a year on new builds and major refurbishments. If sustainability is well handled, and addressed at the very beginning of construction projects, it can and should provide better value for money in the long term.'