A report by the Victorian Auditor-General has found that the Department of Human Services is unable to meet the demand for shared supported accommodation exceeds supply by 30 per cent.

The report released on 12 March examining accommodation for people with a disability also found that the "reactive response to accommodation needs" by DHS would perpetuate a "crisis-driven system".

Auditor-General Des Pearson said DHS did not have the resources to replace and upgrade houses that did not meet required safety and accessibility standards, and had not yet established strategy to address gaps in capacity or expertise in the disability sector.

Unless these issues were addressed, Mr Pearson said, the transition from a medical model of support to a social model would be impeded.

In its response to the report, DHS said it would totally implement eight of nine recommendations by the Auditor-General, including the allocation of specific resources for individual planning for residents within shared supported accommodation and ongoing assessment of resident satisfaction.

The entire report, and response by the Department of Human Services response, can be viewed on the Office of the Auditor-General website.