Poor monitoring and evaluation make it difficult to say if a pound;50 million-a-year scheme supporting in-service training for teachers has made any impact on children's learning.
Auditors say the evidence is at best patchy on whether grants for education, support and training (GEST) and its successor, the better schools fund (BSF), have improved teaching and learning in Welsh schools.
Meanwhile, new Assembly government statistics show that council spending overall on education has increased - but not by as much as for other local services, such as social services.
Both GEST and the BSF were established to help raise standards in schools.
The targeted grants are paid to councils by the Assembly government to help them develop new and innovative initiatives to improve teaching and attainment.
But in a report published this week, the Wales Audit Office found that GEST was taken for granted by councils and had supported the same range and type of activities for years.
The BSF, which replaced GEST in 2004-5, is a better scheme with more consultation, better planning, new guidelines, and a clearer focus on the Assembly government's strategic priorities, say auditors.
But both schools, local education authorities and the government could do more to evaluate whether the fund - expected to near pound;50m in 2005-6 - is making a difference, says auditor general Jeremy Colman.
Assembly officials are, for example, tracking the number of participants receiving training in a particular area - but not always following up how this training affects standards.
Meanwhile, some BSF-funded activities, such as education for sustainable development, have yet to be evaluated by inspection agency Estyn.
Meanwhile, new statistics show overall council spending on education rose to pound;2,011m in 2004-5. But other council services have been getting bigger increases in their budgets.
For example, spending on personal social services rose 8.3 per cent in 2004-5, and total council spending rose 11 per cent - but education by only 4.7 per cent.
Education has lost out to social services for the past three years. The sector remains the single largest-spending area for Wales's 22 councils, accounting for 34.8 per cent of total expenditure.
But education's share of the cake has declined, from 37 per cent in 2002-3.
The fall reflects declining pupil numbers across Wales, according to Chris Llewelyn, head of lifelong learning at the Welsh Local Government Association.
He said: "Some authorities spend more on education than they are allocated by the Assembly government, some less. But overall Welsh councils spent pound;22m more than they were allocated last year."
But Geraint Davies, secretary of teachers' union the NASUWT, said he was concerned about the "unofficial squeeze" on education spending.
"The Assembly government needs to ensure all monies earmarked for education are properly spent on schools and pupils."
And Brian Rowlands, secretary of the Association for School and College Leaders Cymru, questionned how schools can be expected to deliver all the government's initiatives plus workforce remodelling with a declining share of council budgets.
He added: "We are very concerned that council spending details show education suffered once again compared with other services.
"The evidence from around Wales for 2006-7 is no better, with pessimistic forecasts for further budget restrictions."