A school is spending more than $86,000 every year to enforce its zone - including on private investigators to confirm if students are living where they claim.

Auckland Grammar School has more than 2500 students and is struggling to cope with increasing demand as hundreds more apartments are built within its catchment area. Only a handful of out-of-zone students are picked from a ballot of hundreds each year.

The school has been named in a report by the Office of the Auditor-General into schools asking for payments for out-of-zone applications, as one of three that ask for an "administration donation".

It told the OAG that the cost of enforcing its home zone largely involved confirming whether a student lives in zone, and comes out at slightly more than $86,000 each year.

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One ploy some schools encounter is parents arranging to live temporarily within zone to enrol their child, either through a rental or swap agreement.

Auckland Grammar headmaster Tim O'Connor said the $86,000 included administration costs and staffing hours to "monitor the validity of a student's enrolment status".

"This does come at a cost, which may on occasion require the services of private investigators. This reflects how seriously the school takes its responsibilities to provide education for our local community, typically defined by the Grammar zone."

Asking for a $50 donation with enrolment applications helped ensure operation funds could be spent on teaching and learning, O'Connor said, and that donation would continue to be sought.

A breakdown of costs against donation revenue was provided to the OAG.

"The school anticipates, based on a $50 donation for both in-zone and out-of-zone applications, it could recover about 37 per cent of the cost of enforcing its zone," the OAG report states.

"This means that out-of-zone applicants were being asked for donations to offset the cost of managing in-zone enrolments."

Mount Albert Grammar School (Mags) and Epsom Girls' Grammar (Eggs) also asked for a "donation for administrative purposes". Mags has decided to stop asking for the donation. Eggs could not be reached for comment.

The OAG report noted those payments were requested when the Ministry of Education was giving "mixed messages" on whether schools could ask for them.

Its recent position that any request for a donation in connection with out-of-zone places is unlawful differs to what was conveyed in earlier material for schools, which suggested such donations could be asked for.

The report also found Kohia Terrace School and Cornwall Park District School were wrong in asking for an out-of-zone "administration fee" of $20 and $75, respectively. Cornwall Park District School has since stopped the charge and refunded parents.

The OAG investigated after a request from Labour's education spokesman Chris Hipkins, following Herald reports on the payment requests. Hipkins said he was concerned at the unclear guidance from the ministry, but the larger issue was underfunding of schools.

"If schools were properly funded by the Government they wouldn't need to find tricky ways to ask parents for more money."

Last year Epsom MP and Act Party leader David Seymour floated the idea of removing the automatic right to attend local schools from residents in yet-to-be-built apartment or housing developments in the "double Grammar zone". One property developer slammed that idea as "something out of communist-style Russia".

If schools were properly funded by the Government they wouldn't need to find tricky ways to ask parents for more money.

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Seymour also wants legal changes to enrolment rules to be considered, to better enable schools to bar those they consider zone cheats. Given the pressure on Auckland Grammar and Epsom Girls' Grammar, he was surprised the former was spending only $86,000 a year to enforce the zone.

"It is a huge issue. And it shows up in the property prices - one side of Landscape Rd is a couple hundred thousand dollars more expensive because one is in zone and the other isn't," Seymour said.

"[Auckland Grammar] do some pretty diligent stuff including where kids come from in the morning and where they go and stay. There are examples such as a family renting a studio apartment in zone, the kid goes home somewhere out of zone, then comes back to the apartment late at night.

"That is the sort of extent people are prepared to go to. That is an actual case they have faced."

Ministry head of sector enablement and support Katrina Casey said as a popular school it wasn't surprising Auckland Grammar received out-of-zone applications, but it received operational funding of about $3.95 million a year to cover such costs.

"Auckland is facing population pressures and we're investing heavily in Auckland to address roll growth. The Government has announced almost $15 million this year, on top of $158 million announced in June and October last year, for new classrooms in Auckland."