More than 60 schools broke laws and regulations last year, and a further 44 had such bad financial problems the Education Ministry had to promise to underwrite them, an auditor report has revealed.

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The Auditor-General's report on the audits of schools' 2017 accounts said some were repeat offenders, including three that loaned money to staff.

Other problems included a school that wrote off $26,000 in unsold school uniform items, a secondary school that took a loan with a 20 percent interest rate, and another that did not seek recovery of a $21,000 overpayment to a former staff member.

The report said more schools were exceeding the amount they could borrow without the ministry's permission, because they entered leases for IT and copying equipment that was in effect a loan.

It said auditors spotted serious financial problems at 44 schools and would not confirm them as ongoing concerns until the Education Ministry confirmed it would pay their debts if necessary.

It said some schools did not understand their financial responsibilities and some were not planning their building maintenance properly.

"If a board does not properly plan for its property maintenance needs, there is a risk that it may spend the funding provided for maintenance on other items," the report said.

"This can result in a decline in the condition of school property.

"There is also an effect on financial reporting, as the school's financial statements may not reflect its obligations for maintenance and therefore the school's true financial position."

The report said auditors issued modified opinions for 27 sets of accounts, 15 for last year and 12 for previous years.

It said auditors found problems with the 2015, 2016 and 2017 accounts of Auckland's Al-Madinah School, which RNZ News last month reported was undergoing a forensic accounting audit.

"We were unable to express an opinion on the 2016 and 2017 financial statements of Al-Madinah School," the report said.

"There were limited controls and scrutiny over payments for these years. In particular, there was inadequate documentation to support some payments, and some payments seemed excessive for their stated purpose.

Because of this, we were unable to get enough audit evidence to form an opinion."

There were also problems with the the 2015 financial statements of Te Kura Kaupapa Māori o Takapau.

"We were unable to form an opinion because we were unable to obtain enough evidence about bank accounts, revenue and expenditure accounts receivable or expenditure and accounts payable.

"This is because a staff member set up bank accounts outside the control of the Board of Trustees, which resulted in the suspected misuse of school funds during the year."

The report said kura kaupapa Māori were over-represented among schools that reported their results late and had poor financial policies, despite the Office of the Auditor-General calling for improvements in 2010.

It said 126 school audits were overdue, including two schools that each had four years of audits outstanding.

The report said Mana Tamariki decided not to seek recovery of a 2016 overpayment to an employee of about $21,000, even though the school was in financial difficulty.

It said Tahatai Coast School last year made a trading loss of $71,438, which included writing off more than $26,000 of uniform inventory after it decided to change the school uniform from 2020.

The report named three schools that spent government funding on overseas travel, including for the second year in a row Blockhouse Bay Intermediate which spent $23,000 on a trip to South Korea for 21 children and three teachers.

It said Te Kura Kaupapa Māori o Nga Uri a Maui spent $32,401 on a four-day planning meeting in the Gold Coast, Australia for which teachers paid $10,013 for travel.

Te Whata Tau o Putauaki spent $47,639 to send five students, four teachers, and one caregiver to the World Indigenous Peoples Conference on Education in Canada. The money was in addition to student fund-raising of $53,219.

The report said the ministry had told schools they could pay for travel if it had an educational purpose.

List of schools that needed Education Ministry letters of support, due to financial difficulties in 2017:

Albany Junior High School

Avondale Intermediate School*

Bainesse School*

Ballance School

Bay of Islands College

Cambridge East School*

Cannons Creek School

Castlecliff School*

George Street Normal School

Golden Bay High School*

Heretaunga College

Howick College

Kadimah School*

Kaihu Valley School

Mangere Bridge School

Melville Intermediate School*

Motumaoho School

Nga Tawa Diocesan School

Northland College*

Omanaia School*

Owhata School

Parklands School

Pouto School

Pukehina School*

Pukepoto School*

Puni School

Rawene School

Saint Brigid's School (Dunedin)*

Saint Joseph's School (Grey Lynn)*

Saint Joseph's School (Temuka)

Saint Mary's School (Dunedin)*

Saint Patrick's College (Silverstream)*

Solway School*

Southland Girls' High School

Tai Tapu School

Te Kura Kaupapa Māori o Nga Maungarongo

Te Kura o Otangarei*

Te Kura o Ratana*

Thames South School

View Road School*

Waikowhai Intermediate School*

Waipahihi School*

Waitaki Boys' High School

Waitara Central School*

*Indicates schools that were also in financial difficulties in the previous year.