It is a grim document, one that helps explain at least one of the more daunting financial challenges facing the city of New Orleans.

This year’s annual audit of the New Orleans Firefighters Pension and Relief Fund, released Monday, shows the fund’s total assets dropped about 9 percent in 2012 from the year before, hit by shrinking income from its investments and rising costs.

None of this comes as a particular surprise. The fund’s poor performance has made it the subject of pointed debate for months, with Mayor Mitch Landrieu trying to wrest control of the fund’s investments from the board that governs it, and the local firefighters union accusing the mayor of skimping on the city’s annual contributions.

The audit paints in stark detail how things came to this. It notes, for instance, that the fund is still owed about $15 million of an $18 million investment in a Cayman Islands hedge fund that filed for bankruptcy last year, now the subject of a lawsuit.

On top of that, the fund had 12 loans outstanding worth more than $23 million given to businesses “including movie production, hotels and office buildings” in 2012, six of which are now in default.

Overall, the fund’s investment income slid to about $1.6 million, down from $9.7 million the year before.

At the same time, the amount of money flowing out of the fund to pay retirement benefits and administrative expenses climbed to $30.1 million, up from $25 million.