A total of 78% of councils produced documents fully compliant with the commission's requirements this year, compared to last year's 74%.
The second audit of plans shows only 3% were given adverse opinions compared to 6% last year.
Audit Commission controller Sir Andrew Foster said: 'Councils are to be congratulated for rising to the challenge of producing sound performance plans.
'Best value is all about year-on-year improvement and it is good that some of those who last year made mistakes have learned from them. Our inspectors will be looking to see that this improvement is carried through into authorities' reviews of their services. That is how authorities will achieve the ultimate goal of users experiencing real improvement in the services they receive.'