An improvement in the way three quarters of schools teach in Northern Ireland is hailed as a major success.
Chief inspector of schools Stanley Goudie said there are still problems with management in both primary and post primary schools.
In the report the chief inspector congratulated teachers on reducing the number of young people who leave school with no GCSEs.
He said 14-16 year olds do not get enough help with literacy and numeracy.
Mr Goudie criticised the management of some schools, saying their leadership needs to improve.
In his report he said leadership was "not good enough" in a third of post-primary and a quarter of primary schools.
The report also said number of Irish medium schools continue to have problems, adding that in some pre-schools the standard of Irish used by adults needs to be improved.
Of the schools which needed to raise standards, Mr Goudie said there had been some real successes.
Mr Goudie also warned about the future of schemes which aim to improve learning.
He said there was a real danger of their funding being reduced as difficult decisions lie ahead.