Primary schools are underspending by an average Pounds 21,421, the equivalent of an experienced teacher's salary, according to figures compiled by the National Association of Schoolmasters Union of Women Teachers.
More than Pounds 750 million is still in school bank accounts, according to the union's research.
Nigel de Gruchy, the NASUWT general secretary, said: "Underfunded schools underspending their budgets is unforgivable. Our research shows that a bad situation continues to deteriorate. The Government and school governors stand accused of mismanagement and a lack of financial expertise which last year deprived the nation's children of education valued at more than Pounds 750 million."
His figures for 199394 show that primary schools on average underspend by 7.43 per cent of their budget.
For secondary schools the figure is 4.27 per cent, the equivalent the union says to an additional head of department, two newly qualified teachers and at least 10 sets of textbooks.
Mr de Gruchy said this shows that local management is not the unqualified success Education Secretary Gillian Shephard claims. He said schools have been known to attempt to make a teacher redundant with more than Pounds 100, 000 in reserve. Others were unnecessarily putting up with large class sizes and loss of preparation time for teachers.
The union has proposed: compulsory financial training for governors and managers; government regulations requiring governing bodies to explain unspent cash; and restricting balances carried forward to no more than 1 per cent in excess of earmarked future expenditure.
However, David Hart, general secretary of the National Association of Headteachers, said the sums involved were equivalent to less than Pounds 300 per school. He said the NASUWT was concentrating on extreme cases.