Nine in 10 young offenders released from custody in Northern Ireland reoffended, the audit office said.
Repeat criminals accounted for 70% of all youth crime and disorder and the rate of recidivism has been on the increase since 2010/11.
Comptroller and auditor general Kieran Donnelly called for a specific strategy to guide the Executive in youth justice policy and help co-ordinate the delivery of services.
He also said youth conferencing - learning first-hand from the victims of their offences about the harm their behaviour has caused - may not be appropriate for the most prolific cases.
The audit office said: " Reducing reoffending by young people requires significant political and cross-department support to be successful.
"In practice, this will require public bodies to work collaboratively and to maintain their engagement with partners in single outcome agreements.
"They must work effectively not only with traditional partners in the criminal justice system, but also with key departments and agencies in health, education and housing."
Eighty nine per cent of young offenders (31 out of 35) relapsed into crime after they were released from custody, statistics from 2013/14 revealed.
They were more likely to commit another misdemeanour within the first month of release than any other group.
More than half of young offenders dealt with through community orders were involved in recidivism.
Auditors recommended the Youth Justice Agency and other government agencies establish performance indicators on reducing reoffending, focusing on improving outcomes.
Youth conferencing has a central role in Northern Ireland.
The audit office said: "Although well-regarded internationally, it has not been demonstrated that conferencing has reduced reoffending in Northern Ireland.
"Improvements in reoffending outcomes between 2007 and 2008, when around one in five who went through a youth conference reoffended, have not been maintained.
"In 2013/14, more than one in two young offenders dealt with through community orders reoffended. Youth conferencing may not address the needs of prolific offenders in particular."
The number of offences committed by young people has been reducing in recent years. However, more than one in four will go on to reoffend within one year, the audit office said.
Mr Donnelly said: "Repeat offenders account for a disproportionately high percentage all incidents, representing over 70 per cent of all youth crime and disorder."
The average cost per occupant each year in the Juvenile Justice Centre is £324,000.
Northern Ireland Commissioner for Children and Young People, Koulla Yiasouma, said: "I t seems youth justice has been put on the Government's long finger.
"We now need urgent and sustained action from Government following today's report and we expect departments to fulfil their duties under the Children's Services Co-operation Act, which requires them to work together in the best interests of children."