Councils spend £21 billion of taxpayers' money every year but cannot provide clear and complete information on how they spend it, according to the public spending watchdog.
Information about how councils spend £40,000 every minute is often "of poor quality, unclear and incomplete", with a tendency to bury bad news, a report by Audit Scotland shows.
Important facts are found hidden away in lengthy reports, making it difficult for councillors and other people to effectively scrutinise council performance.
Auditors also discovered a lack of "balance" in council reports, with positive messages taking precedence over areas which need improvement. A lack of "benchmarking" has led to councillors failing to ask why other councils are able to provide services cheaper or better.
The wide-ranging report, entitled Managing Performance: Are You Getting It Right?, does not focus on any council in particular but attempts to identify common themes across Scotland's 32 local authorities.
It found "inconsistencies in the coverage and quality of information available to enable councils to implement effectively performance management". It states: "We have found that very lengthy detailed performance reports are not effective as important issues can be buried away in the detail."
The report advises councillors to make their reports "more balanced in terms of highlighting areas for improvement as well as the positive messages".
It adds: "Councillors should also use benchmarking data.
"Comparing performance trends against targets, over time and with other councils can prompt questions about performance such as 'why is it other councils appear to be performing better than us?' or 'why are other councils apparently providing cheaper services?'"
Some councils have abandoned self-scrutiny in areas where external auditors and inspectors regularly investigate. "External scrutiny is not a substitute for rigorous self-evaluation," the report warns.