The Education Review Office says one-third of schools do not have the right policies and practices to ensure they do not hire sex offenders.
Schools are also unlikely to recognise situations when students could be at risk from staff and respond appropriately, a report released on Tuesday shows.
The report is based on reviews of 200 schools early in 2013 and surveys of nearly 350 principals and board of trustees' chairpersons.
It shows some schools have still not acted on the results of high-profile inquiries into sex offences by teacher James Parker and Henry Te Rito Miki, who pretended to be a qualified teacher.
The report says a third of schools are vulnerable to making appointments that put their students at risk and 6 percent do not have robust practices for any aspects of student safety.
There is confusion about when to report teachers to the Teachers Council, some schools are not police-checking staff, while others do not follow up student complaints properly, it says.
ERO manager of evaluation services Stephanie Greaney said on Tuesday that boards and leaders have a key role to play in making sure that students were safe.
Ms Greaney said all trustees and school leaders agreed that student safety was paramount, but some schools needed to increase their commitment to safety when employing and managing staff.
The ERO is making recommendations to school boards which Ms Greaney said can be used to improve employment practices. The review office, Ministry of Education and School Trustees Association will help schools.
The ministry's head of sector enablement and support, Katrina Casey, told Radio New Zealand's Checkpoint programme schools need to act on the report.
"What we're wanting to see is that schools do sit down as a result of reading the report and do a check of their own processes just to make sure that they don't have any concerns about the people that they're recruiting into their schools."
Ms Casey said she expects that almost all schools will have sound practices for vetting potential staff by 2015.
Schools are careful, say principals.
Principals downplayed the ERO report on Tuesday. The Secondary Principals Association and the Principals Federation said schools are more careful in their practices for hiring staff and protecting students than their policies might indicate, and parents do not need to panic.
However, the director of the Teachers Council said schools need to ensure they meet best practice for ensuring they do not appoint staff who might put students at risk. Peter Lind said the ERO report is an alert for everyone involved with schools.
"If we are going to be able to put in good screening processes, a police vet is not sufficient. The recruitment of staff and screening of referees and so on is absolutely critical. I think it's a timely report and it's certainly one we would strongly support."
Schools should make sure they are up to speed for their next staff appraisals which are a key way of ensuring that staff are behaving appropriately, he said.