The 22.2 trillion won (US$20.1 billion) project, aimed at enhancing the nation's water management system as well as preventing the Han, Nakdong, Geum and Yeongsan rivers from flooding, was completed last year, despite mounting criticism.
The project, one of Lee's campaign pledges, has been at the center of controversy ever since due to the possible adverse influence it might have on the environment as well as allegations of shoddy construction.
According to a report by the Board of Audit and Inspection (BAI), the government failed to take into account how the water quality would be affected by the dams and other related facilities built along the rivers.
In fact, the concentration of algae in the water among 16 dams was found to be 1.9 percent higher in 2012 compared to the average quantity of algae sampled during the previous five years.
Also, the chemical oxygen demand (COD) went up by 9 percent during the same period, the report said. The higher the COD is, the more polluted the water is.
According to the report, the government used unrealistic conditions to estimate how the project would affect water quality. Authorities also failed to implement an algae warning system, it said.
Also, dams, floodgates and other facilities were poorly constructed, the report said. It claimed that the government "either mistakenly used improper design criteria or failed to verify them while hurriedly pushing through with the project,"
Inspectors also found that 15 of 16 dams had collapsed bed pitchings, and floodgates at 12 weirs are believed to not work properly, the report said.
The government also dredged the bottom of the rivers without reviewing the profitability or the effectiveness of the project, it said.
"We urged those concerned, including the land and environment ministers, to repair problematic facilities and to come up with comprehensive measures to boost water quality, safety of the facilities and their future maintenance in an urgent manner," the report said.
"We will continue to conduct a regular monitoring to preemptively deal with any situations and to see if the facilities are reasonably utilized," it added.