Double-digit rises were set across the south-east of England in April. Oxfordshire CC set the second lowest rise in the region with a 13.4% increase.
Keith Mitchell, leader of Oxfordshire CC, said: 'We have said all along that the council tax rises last year in the south were the product of a flawed system and not the fault of councils.
'It is most re-assuring to have the support of an independent body for the case we have been making. It is now time for the government to sit up and take notice. Their system for giving grant money to councils is outdated and leads to the massive council tax rises we experienced last year. This cannot carry on.'
Margaret Godden, deputy Leader of the council added: 'Everyone at the county council was uncomfortable in setting a 13.4% council tax rise last year. It was a huge rise to set and all the more frustrating because we knew there was little we could do about it without cuts in the very services the people of the county were telling us they wanted to see improved.
'This Audit Commission report tells us we were right to feel aggrieved. We can only hope the concerns expressed across the south-east and by the Commission will be addressed.'