Staff morale is so low the government has spent almost $175,000 on consultants to lift staff's flagging spirits.
A negative public image of the department, changing environmental policies and lack of internal support had left them feeling miserable and disengaged, an internal report has found.
The report was conducted by consultants Right Management in July 2010 when the department was under the responsibility of Finance and Deregulation Minister Penny Wong.
The portfolio has since been taken over by Greg Combet.
The department is responsible for carrying out some of the government's most critical and controversial policies, including those relating to global warming, carbon emission reduction and promoting energy efficiency.
The findings of the report are so damning the government only released it nine months after it was first requested by the Opposition under Freedom of Information laws.
The report, which also includes a survey of 788 people, found the department to have "low levels" of employee engagement. Staff held a poor view of the department, felt a lack of purpose, were uninformed about changes to policies and procedures, and worried about their future employment.
"Many reported having to think about whether they would tell people where they worked because of the department's negative image," the report said.
Opposition Climate Action, Environment and Heritage spokesman Greg Hunt said the report exposed the level of incompetence within the department.
"I think most taxpayers would be staggered to know that more than $250,000 has been spent to fix up the internal mismanagement of a department under the stewardship of now Finance Minister Penny Wong," he said.
A letter to the Opposition attached to the documents said the identified issues had been addressed and initiatives introduced to improve staff engagement within the department.
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