The university's Public Services Activities deal with everything from farm productivity to economic and community development, conservation, nutrition and health and youth development and families.
Since July 2008, state funding for such programs has been cut from $52 million to $28 million. About 90 percent of money spent is on agricultural research and cooperative extension programs.
The audit released Thursday found that while top public service executives received raises in the recent years, "some substantial," it noted, there was no appropriate documentation for the raises.
It also found that the work of 19 of 20 executives making more than $62,000 annually had not been formally evaluated in the past five years.
It found that one employee received a bonus of $1,200 in 2008, even though university policy prohibited bonuses for those making more than $100,000.
In his response, Clemson University President James Barker said the university will formalize the evaluation process for executives.
He added that while "it is clear internally to the PSA administration the value and appropriateness of performance pay increases" the university's human resources records don't effectively show the reasons.
The agency will "more fully and carefully document performance pay justifications in writing," he wrote, noting that the Clemson public service salaries are below average when compared to 13 other land-grant universities in the South.
The audit also found Clemson could save up to $1 million a year by turning over its meat and poultry plant inspection program to the U.S. Department of Agriculture that conducts similar inspections.
But Barker said Clemson will continue to operate the program "in an efficient and effective manner" and that state inspections are mandated by the state General Assembly.