The NSW government spent $602 million less on education than it budgeted for last financial year, an audit has found.
The auditor-general released its report into the Department of Education and Communities on Wednesday, saying total expenses were $602 million less than the $14.2 billion originally budgeted.
More than $400 million of these savings were made in employee-related expenses, with a decrease in staff numbers saving the state $110 million.
Operating expenses were found to be $125 million under budget, "predominantly due to underspends for school operating expenses, consumables and other general operating expenses", the report states.
"This was offset by increases in maintenance and contractor expenses."
Grants and subsidies were $172 million under budget due to delays in the implementation of federal funding.
Labor MP Carmel Tebbutt said the figures on staff and operating costs were worrying.
"For them to underspend money that has been allocated simply shows that the government is not prioritising education and training," she told AAP.
NSW Greens MP John Kaye argued that the state would lose out in the long run if it built a surplus on the back of education underspending.
"That's money that could have been spent on TAFE teachers ... it includes support for students with special needs.
"It's a crucial $600 million."
A department spokesman denied it had been instructed to underspend to create a budget surplus.
"The reasons for the underspend are fully explained in the report," he told AAP.
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