Schools in Gwynedd are getting good support from their local education authority, according to inspection agency Estyn. But greater strides must be taken to tackle hefty primary school reserves and an overspend in the special educational needs budget.
The agency has rated the county's strategic management of education good, and the prospects for further improvement excellent.
But a quarter of all primary schools in Gwynedd have reserves exceeding 10 per cent of their budgets, twice the amount recommended by the Audit Commission, the public services spending watchdog. The authority struggles to keep SEN spending on target. In 2004-5, the pound;3.3 million budget went into the red by pound;244,000 and was balanced by dipping into the individual schools budget.
But Estyn praised the council's senior officers for their "clear vision" while councillors had an "increasingly firm grasp of educational issues".
The agency said the authority had struck the right balance between challenging and supporting schools. There was a culture of self-evaluation, but further improvements could be hampered by poor communication between social services and schools.
Gwynedd has a strong track record. Its position in Key stage 1 results has improved from 14th out of 22 authorities in 2002 to sixth last year, while the proportion of pupils gaining five or more GCSEs at grades A*-C has been the fourth-highest in Wales for the past four years.
Gwynne Jones, head of Gwynedd's schools service, said: "The report mirrors the self-evaluation that we did beforehand."
He acknowledged problems with SEN spending, which he said reflected a nationwide trend. The proportion of children with statements of special needs is 3.85 per cent in Gwynedd, higher than the Welsh national average of 3.33 per cent. Figures published by the Assembly government last month showed how special needs spending was expected to rise by 7 per cent across Wales this year.
"We're seeing an increase in the number of very young children who have special needs, so we're spending more," said Mr Jones.
"We intend to work with schools to see if we can make better use of the resources we've got."
He also plans to tackle high reserves, which he said were a product of external pressures on budgets. According to the report, reserves for 2003-4 were Pounds 3.4m or pound;187 per pupil, the fourth-highest in Wales.
David Belsey, NASUWT Cymru's local representative, said education provision was good and praised the authority for its role in implementing the workforce agreement.
He said SEN over-spending had been a problem for the authority, but did not know if this meant it was effective at identifying children with special needs or did not set aside enough money.