The government does not have proper oversight of the country’s schools, despite investing more than £380 million each year in taxpayers’ money, a damning report from the government spending watchdog has found.

Officials have little understanding of what interventions work to improve schools, meaning the system of oversight is not achieving value for money, the report adds.

The assessment was made in a National Audit Office (NAO) report published today, which claims that, despite an overall improvement in education, a “significant” number of children were still being taught in “failing” schools.

The watchdog estimates that around 1.6 million children were being taught in schools not rated good or outstanding by Ofsted, but said despite the Department for Education (DfE) being clear about what constitutes unacceptable performance, it had little idea of how it worked at school level.

Despite having a “fit and proper persons” test for governors in new academy trusts, neither the DfE nor the Education Funding Agency had made checks on governors to prevent risks, such as individuals being put up to the job by organisations seeking to gain power and influence, the watchdog added.

Amyas Morse, head of the NAO, said officials needed to do more to get a grip on the system of oversight of the country’s schools.

“The department has been clear about the need for schools to improve and education performance has done so nationally,” Mr Morse said. “But there are significant gaps in the department’s understanding of what works, and the information it has about some important aspects of school performance is limited.

“Greater school autonomy needs to be coupled with effective oversight and assurance. The Department has made some improvements but has further to go.”

But Margaret Hodge, chair of the Public Accounts Committee, went further, branding the DfE’s approach to school oversight a “sorry state of affairs”.

“Despite the system spending over £382 million on overseeing schools, the department does not know enough about what’s going on in them. It has created a significant blind spot for itself when it comes to overseeing school governance, important aspects of schools’ finances, and the ability of schools to keep children safe,” the Labour MP said.

When it came to academies, she added, the department did not know why some sponsors achieved improvements in schools and some did not.

“It’s a sorry state of affairs when the Department has to rely on whistleblowers to spot declines in school performance between four-yearly inspections,” Ms Hodge said.

The government’s supervision of academies came into sharp focus in the wake of the “Trojan Horse” affair in Birmingham, where hardline Muslims were alleged to have attempted to take over a number of schools in the city.

In response to the report, Labour’s education spokesman Tristram Hunt claimed the report was an “utterly damning” account of the coalition’s approach to education.

“It makes clear that the government has no plan for tackling poor standards and simply does not know who is responsible for overseeing schools and the safeguarding of children,” Mr Hunt said.

“This failure allowed the shocking ‘Trojan Horse’ events in Birmingham to occur - children were exposed to dangerous, hard-line views for months because no one took any action.”