TORONTO - An Ontario agency set up to boost student achievement isn't always funding schools based on their need and uses a questionable system of "bankers" to distribute its funds, the auditor general said in his annual report.

Out of the $340 million spent since the Literacy and Numeracy Secretariat was set up five years ago, only 85 per cent of that money went to help school boards meet student-achievement targets," said auditor general Jim McCarter.

"Funding was not always allocated to school boards with the greatest need," McCarter said.

In one case, a board with the most low-performing schools received just $17 per student, while other boards with no poor performers were getting more than twice that amount of money.

McCarter also questioned the need to use certain school boards as "bankers" to distribute agency funds, saying that arrangement may not provide proper accountability and includes user fees that are at times excessive.

"There is no agreement between the secretariat and these boards outlining respective roles and responsibilities or accountability relationships," he said.

McCarter did acknowledge the government had made progress to improve student achievement, but said it isn't properly monitoring the agency's effectiveness, so it's hard to know which programs are actually working and whether the funding is being well-spent.

In his report, McCarter also looked at the effectiveness of the Education Quality and Accountability Office, the provincial agency that oversees student testing.

McCarter found the agency was doing a good job measuring how well Ontario schoolchildren were doing in terms of meeting curriculum expectations, but said it required stronger oversight.

"We did find areas where the EQAO could strengthen its oversight of test administration, especially by ensuring that it visits all school boards and schools during testing periods."

The agency, which had a $31.7-million budget in 2008-09, should do more formal reviews to avoid discrepancies, McCarter found.

He said that for instance, results at some schools fluctuated by as much as 50 per cent from one year to the next, but those results weren't being flagged for followup.