A follow-up visit after a largely negative verdict in March 2002 notes that "important improvements" have taken place to raise attainment in schools.
Primary results have improved but are still below the national average while secondaries have "much still to be done" to lift performance.
Roger Stewart, head of service, is said to have taken "strong action" and is supported by a new team of senior managers, backed by an extended team of officers with a focus on quality improvement.
Mr Stewart "had made significant progress in ensuring that the education service provided schools with improved levels of support and challenge", inspectors state.
They add: "The strategic and operational management of the education service had been significantly improved in a short space of time. While there were many promising initiatives, it was too soon since the establishment of the new management structure to evaluate the full impact of the improvement programme on the quality of provision for schools and pupils."
The inspectorate is continuing to press the authority on how it intends to raise attainment.
Mr Stewart promised that inspectors would see further progress over the next three years as changes take effect.