Northampton Borough Council lent the money to Northampton Town FC but work on the Sixfields Stadium stalled and the club has since been taken over.
The council initially wrote off the loan before setting aside £950,000 to try and recover the money.
However, a report by auditors KPMG has now revealed most of the £950,000 has now been spent.
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The report said: "From the £950,000 authorised, the authority has spent or committed a large proportion to date.
"Despite this, the authority has not had any success in recovering the lost monies."
The council has refused to say exactly how much of the £950,000 has been spent so far, citing "commercial sensitivity".
The council is yet to state whether it intends to continue pursing the lost loan money.
A PricewaterhouseCoopers audit report published last year found a number of issues with the approval and handing over of the loan money.
It claimed that, due to "political and management pressure", the loan was not properly checked.
Northampton Town was given the £10.2m to redevelop Sixfields stadium three years ago, with much of it being passed to a company called 1st Land Ltd.
The company is now in liquidation while the work on Sixfields was not completed.
A police inquiry is examining the handling of the loan.
A council's bid to recoup an unpaid £10.22m football stadium loan has "not had any success", it has emerged.