Opt-out governors criticised over plans
Some relied too much on the headteacher and senior staff, while others did not listen enough to the teaching and support staff. The NAO said that while governors generally showed a good awareness of their role, they were frequently unclear about the need for strategic plans.
"Although many schools had set targets in their plans these were often not measurable, were inconsistent or could better be described as broader objectives. Many plans were not explicitly linked to financial forecasts or did not address some of the key initiatives being undertaken in the school, " it said.
The NAO's review of the financial health of the 1,116-school sector over the last three years shows that 10 per cent had cumulative deficits in 1994-95. Typical problems included failure to react to lower pupil numbers than forecast or poor procedures to control staff and costs.
The NAO's concern about the effectiveness of governors comes amid worries among Government inspectors and national governors' leaders about the competence of lay people to run schools.
Both the Office for Standards in Education and the National Association of Governors and Managers have expressed serious doubts about some governors' abilities.
In official reports to the School Teachers' Review Body, they claimed governors interfered excessively in the daily management of schools, were uneasy about financial duties and had unquestioning reliance on headteachers.
The NAO said that all governing bodies needed to work with school staff, and to have a full and timely involvement in setting policies and budgets - for both the short and medium term.
And the NAO suggested that governors review their overall approach to their "monitoring" role, to ensure that procedures were in place to allow them and staff to check the school's achievements regularly against plans and budgets.
It said there was real concern in the sector to improve value for money, and that the overall standard of financial management was generally sound. However, it claimed a "significant minority" of the 80 schools it examined could show improvement - 11 could improve their register of governors' interests and 13 needed to strengthen the separation of various financial duties.
Lack of financial expertise among governors or lack of involvement, either directly or by regular reporting, were also identified as problems at several schools.
The watchdog also said that GM schools could make huge savings on the Pounds 29 million cost of water and energy every year. It estimated they could lop up to 18 per cent off such bills, and recommended that schools could negotiate lower tariffs.
Good Stewardship: National Audit Office Examinations of Value for Money at Grant-Maintained Schools 1995-96, House of Commons Paper 697, the Stationery Office, price Pounds 9.85.