A significant number of Welsh schools will still need replacing or majorly refurbishing by 2019, the Auditor General for Wales has said.
Huw Vaughan-Thomas’s report said the Welsh Government’s 21st Century Schools programme was a step forward from patching-up buildings.
But he added some of the new buildings were not meeting standards.
Education Secretary Kirsty Williams said thousands of pupils had benefited from the programme.
The Welsh Government, councils and further education institutions are collectively spending about £1.5bn on the first phase of the programme, which began in 2014 and aims improve the condition and sustainability of schools.
But the report said there will still be a significant number of schools in need of replacement or major refurbishment when this ends in 2019.
It added the programme was being managed “generally well” – but improvements are needed.
Mr Vaughan-Thomas highlighted gaps where the Welsh Government was “not clear” in setting out its expectations from the start, or in setting out in detail the wider benefits it hoped to achieve.
There were also concerns some of the new buildings are not achieving the high environmental standards expected.
The report says out of the 169 planned projects, 132 schools and six further education projects have so far received formal Welsh Government approval and, of those, 59 have been completed.
A few projects were said to have gone over budget.
Recommendations in the report include developing an up-to-date picture of the condition of school buildings for the next band of investment.
Mr Vaughan-Thomas said the programme has “improved greatly on the previous approach to capital investment in our schools”.
“As the Welsh Government finalises its plans for the next phase of investment, from 2019 onwards, there is a need to focus now on some key areas such as managing the risks of a new type of funding and ensuring that the good collaborative working between Welsh Government and local government continues,” he said.
Ms Williams said the Welsh Government had worked “very successfully with partners to achieve the best value for their joint investment” and pupils had benefited along with many local construction companies.
She added: “I place a huge emphasis on pupils being given an opportunity to thrive in the very best, modern learning environment and am committed to delivering plenty more high quality, well designed, sustainable schools and colleges across Wales.”
Chair of the Public Accounts Committee, Nick Ramsay, said: “I am pleased to see the Auditor General’s findings that the Welsh Government has so far managed this large programme well and that it seems to be on track to deliver the improvements to school buildings anticipated from the first wave of investment.
“However, there is clearly more to do to address the overall condition and suitability of many schools in Wales, at a time when public funds are under continued pressure.”