The agency's launch of a new ID program last year ended in utter disaster.
"It is a damning audit. It concludes the DMV is in failure mode," said Assemblyman Jim Patterson (R-Fresno).
Patterson has been the agency's most vocal critic.
He says the DMV had a decade to prepare for the launch of Real ID, yet officials only started making the federally mandated program a priority a few months before the rollout.
The procrastination resulted in alarmingly wait times.
"This audit discovered 30 percent of the windows at typical DMV offices don't have anybody behind them during business hours," Patterson said.
Wednesday's audit blamed the problems on a "reactive culture."
In addition to poor planning, auditors say the agency was crippled by staffing shortages, outdated computers, and misleading wait times.
'I hope this audit is the impetus to really get our act together and to start re-imagining, redesigning the DMV," Patterson said.
In a letter, the DMV's acting director said she agrees with the audit's findings and is committed to change.
The agency will be submitting a detailed correction plan in the next 60 days.