The Education Authority (EA) has overspend of almost £17m in 2017/18 was mainly due to spending on special needs, it has been revealed.
Last year the EA, which is responsible for allocating money to NI schools, overspent by £19m.
The head of the Northern Ireland Audit Office (NIAO) Kieran Donnelly said he was concerned and that urgent reforms are needed, the BBC reported.
The EA commissions and pays for things like support for children with special educational needs (SEN), school maintenance, meals and transport.
Mr Donnelly said that paying for SEN support was the main reason for the body going over-budget.
The EA had overspent its SEN budget by £12.7m and its school meals budget by £2.4m.
In response, the EA said that the issues which led it to go over-budget in 2016/17 had persisted in 2017/18.
“The EA stated that as budget allocations have essentially remained cash flat, it was unable to absorb in-year pay and price inflationary pressures and increased demand pressures,” said the NIAO.
The EA added that it had made £31m of savings last year.
A previous NIAO report into education criticised the aspects of support for children with SEN.
Ulster Unionist Education Spokesperson Rosemary Barton MLA has said that whilst the shortfall was concerning, it was half of what schools locally overspent their budget allocations by in 2018-19.
“The revelation that the EA overspent by £16.6m in 2017/18 and by £32m within schools in 2018/19 again totally debunks the myth being peddled by the DUP that their arrangement with the Conservative Party has somehow removed the pressures on school budgets. As I said last month - instead of the problems being fixed, they’ve never been worse.
She added: “The Comptroller and Auditor General has been very clear that Northern Ireland urgently requires a review of school funding arrangements. I wholeheartedly agree. Yet to do so requires a Minister and local Executive, and with Sinn Fein intransigence continuing to block the reestablishment of the local institutions, this is just another example of why direct rule should be rolled out now.”