The authority said it was unable to say whether the groundwater posed a health risk before new testing at the site was completed next year.
The EPA has been strongly criticised in a series of letters from state Ombudsman George Brouwer for failures in monitoring the clean-up of the former Albion Explosives Factory site, which now forms the suburb of Cairnlea in Melbourne's west.
The Ombudsman's investigation into the clean-up has raised serious questions about the performance of the EPA in monitoring how large contaminated sites are dealt with.
''The chain of custody forms related to the validation samples collected were not complete,'' the Ombudsman found.
He also said the EPA had been unable to provide documents showing where contaminated material had been ''removed, transported and deposited appropriately''.
The Ombudsman was particularly critical of the fact the authority had engaged the same company that dealt with contamination at the site to later carry out tests there after a complaint was made about the quality of the clean-up.
''In particular, I am concerned that the validation sampling was undertaken by Golder and Mr [name deleted] with very little oversight by the EPA despite the fact that both these contractors were involved in the remedial work complained about,'' Mr Brouwer said in a letter to the EPA
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The Ombudsman also questioned why a report on the condition of a contaminated soil dump at the Cairnlea site was still not completed years after the ''repository'' had been completed.
A new report detailing the extent of the groundwater pollution and the condition of the ''repository'' at Cairnlea will not be completed until next year.
The authority would not say if there were water bores used in the area, and said residents would be notified about the water contamination when it became clear if the groundwater had been cleaned up as much as possible.
Soil testing in other areas of the suburb did not return samples of concern.
In a December 2011 letter to the Ombudsman, EPA chief executive John Merritt said while the extent of groundwater contamination at Cairnlea was not known, ''monitoring of Kororoit Creek itself shows no measurable impact, that is, there has been no detection of explosives in it''.
The authority also told the Ombudsman it was trialling a new ''risk-based'' approach to monitoring of auditors and reviewing audit reports, with the criteria for review including ''high level of community interest''.
The criticisms of the performance of the EPA come as the state government is planning a multibillion-dollar development at another former munitions factory site - the 128-hectare former defence complex in Maribyrnong.
After almost a century of explosives production, about ''25 per cent of the surface area of the site is contaminated'' and groundwater is also contaminated.
The clean-up of the Maribyrnong site - planned to accommodate 3000 homes - could take up to five years and cost up to $20 million.
A source familiar with the site described the Defence Department's clean-up time frame as ''optimistic, ambitious and unrealistic''.
He said the most common and cost-effective clean-up method for large contaminated sites was to not remove the contaminated soil but instead ''shandy'' the soil to reduce contamination levels.
He said contaminated soil was also sometimes pushed to one location on the site, ''capped and called a park''.
It is not just Defence sites where the EPA will be monitoring the clean-up. The 16.5-hectare Amcor site in Alphington - also believed to be heavily contaminated - will close by the end of the year with plans to sell it for development.
One developer is believed to have proposed covering the site in cement to deal with the contamination issue.
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