Northern Ireland councils lost more than 121,000 days to absenteeism in the last year, according to a report released on Friday.
But the Chief Local Government Auditor said figures for staff sickness were on the decline with the 2008-09 figures 9% lower than the previous year.
The Audit Office found the average rate of absenteeism for each full-time employee was 12.43 days, but noted that it was the lowest figure since absentee levels peaked in 2002-03.
The report found, however, that absenteeism rates remained higher than the Northern Ireland Civil Service rate and made recommendations on reducing the figures.
But welcoming the downward trend, the report said: "Increased staff efficiency will be particularly welcome for councils given the current economic climate.
"Councils have, in 2008-09, recorded the first ever fall in the cost of absenteeism since this data has been compiled."
The study found that stress, depression, mental health and fatigue remain the most significant cause of days lost.
The conditions were responsible for 23% of days lost, but the figure was down on the 24% detected in the previous year.
In Ballymoney Borough Council 47% of the total days lost were blamed on stress, a figure which was four times the rate of councils in Magherafelt, Fermanagh, North Down and Armagh.
But the report found: "Lost productivity due to stress-related absence has fallen by £0.4m to £3.5m in 2008-09. This reduction accounts for nearly half of the £0.9m reduction in the total cost of absenteeism."
The survey analyses the performance of councils over a three-year period to counter the impact of annual fluctuations.
Magherafelt District Council had the lowest average annual absenteeism rate of 7.25 days for 2006-09.
Moyle District Council had the largest increase in average annual absenteeism rate, with a rate of 17.65 days for 2006-09, which is 3.19 days higher than the 2003-06 rate.
© Press Association