Northern Ireland's Education Authority overspent its budget by nearly £20m in 2016/17, according to a report from a key public sector watchdog.
Kieran Donnelly, the Comptroller and Auditor General (C&AG) for Northern Ireland, said he was ''concerned" at what had been discovered when his team looked at the 2016/17 accounts of the Education Authority (EA), the public body which oversees Northern Ireland's school system.
The auditor found that:
However, its total expenditure was £1,562.5m - an overspend of £19.1m.
The Department for Education - one of the two main funders of the Education Authority - said that the main causes of the EA's overspend were a higher than expected spend on school budgets (£7.8m), on special education needs (£6.8m), and school maintenance (£3.9m).
The Education Authority is supposed to get prior approval before any overspending is made.
Reacting to the report, Education Authority chief executive Gavin Boyd said: "We recognise the significance of the £19m overspend in 2016/17 highlighted by the Comptroller and Auditor General (C&AG) and we welcome his recognition of the challenges we face as an organisation.
"The C&AG report highlights that the main causes of the overspend are higher than budgeted expenditure by schools as well as increased spending on support for children with special educational needs and on school maintenance.
"The education sector has been facing growing financial pressures since 2010/11.
"These had a major impact in 2016/17 as budgets have continued to reduce and more schools are going into deficit."
Mr Boyd said that around 99% of the EA's budget is spent directly on schools or on services directly supporting children and young people.
"This leaves very little room for reducing spending without seriously impacting the educational experiences of our children and young people," he said.
"Whilst we continue to make the case for more money for education, we have also been meeting regularly with school principals and other education partners to promote the need for transformation.
"We must ensure that our education system delivers what we need for our young people and is based on a model that is financially sustainable in the longer term."
Last night, Ulster Unionist education spokesperson Rosemary Barton MLA said the overspend showed that the local education system was underfunded.
"No one will be surprised to hear that our local schools are finding it increasingly difficult to balance their budgets, but they will be surprised at the sheer pace and scale at which the situation is deteriorating," she said.
The Fermanagh and South Tyrone MLA said funding issues were now critical.
"The confirmation from the C&AG that the EA overspent its budget in 2016/17 is serious, but the reality is we are in a much worse position now than we were then," she added.
"It is shocking that the funding situation in our local education system is critical - and absolutely nothing is being done to resolve it."
In the absence of a local Assembly, the C&AG report will be received by the Secretary of State for consideration.