Hundreds of thousands of dollars in pay was wrongly distributed to staff at Melbourne's Royal Children's Hospital, with some getting too much and others left underpaid.

The hospital changed its outsourced payroll system in 2017 but historical weaknesses in the system were never properly fixed and became weaker under the new regime, according to the Victorian Auditor-General's annual finance report.

The auditor-general previously found ineffective human resources and payroll controls, over and under payment of salaries and superannuation and a lack of assurance reporting.

"We communicated these weaknesses to the hospital's board and audit committee as part of our previous audits, however, they were not all addressed promptly by management," according to the auditor-general.

"In 2017-18, we continued to report that these weaknesses had not been resolved and we have identified further weaknesses over the payroll system and controls."

According to its own report, the Royal Children's Hospital has identified all payment errors and is working to fix them.

The hospital reported $600,000 is outstanding relating to salary and superannuation overpayments.

As of June 30, 2018, $460,000 was estimated in salary underpayment.

"Implementation of the new system has not been without its challenges," chief executive John Stanway wrote in the report.

"Over the part year, we've encountered a range of system and process issues.

"We have undertaken a significant amount of work to fix these issues and provide support to our employees, including a rectification project and revised governance framework."