An audit has found Victoria's logging agency VicForests cleared possum habitat and broke laws. 

The state’s Forest Audit Program report says that breaches by VicForests had the potential to harm the environment in 19 of the 30 areas it assessed.

VicForests was found to have illegally cleared 1,000 square metres of protected possum habitat and broke the law in 25 out of 30 logging areas.

VicForests says the unlawful clearing was a result of a GPS error.

Despite what some see as damning evidence of a government-owned company gone rogue, VicForests says it is pleased with the outcome of the audit. 

“These findings are a testament to the diligent and detailed work our passionate staff undertake in the forest with commitment and care for the environment,” the government agency said in a press release.

“Our staff are committed to continuously improving our practices and strive to demonstrate excellence in all that we do.

“As part of our continuous improvement program, we use findings from these audits to improve our operational practices.”

Forest ecologist from the Australian National University, Dr David Lindenmayer, says he does not see it the same way. 

“If VicForests think it's fantastic that the report shows breaches in two thirds of the coupes, I'd hate to see what a bad report looked like,” he told the ABC.