The nation’s largest Muslim school is again in financial crisis and facing closure after the federal Department of Education refused to continue funding it following years of mismanagement.
In February federal Education Minister Simon Birmingham ordered that $20 million in commonwealth funding for Malek Fahd Islamic School in Sydney’s southwest be withdrawn in a move that would have closed the college.
An audit found the school of about 2000 students consistently failed to comply with basic financial and governance standards, with millions of dollars being spent on management fees paid to the Australian Federation of Islamic Councils.
But in April the Administrative Appeals Tribunal ordered the school’s funding recommence ahead of an appeal by the school.
Despite the order, the federal Education Department has not starting funding the school again, with Malek Fahd claiming it only has enough cash to keep the school open until the end of this month. “This must be resolved as a matter of urgency,” the school’s interim board chairman said in a statement to parents.
“Malek Fahd cannot survive without public funding. We only have sufficient funds to continue to the end of the second term at the end of this month.”
Malek Fahd is 80 per cent taxpayer funded, with commonwealth cash making up the bulk of those funds. The school will take the federal department to the Federal Court today to enforce the order to reinstate funding, claiming it has handed two reports on the school’s financial and governance position to the department.
In a statement last night the department said it informed Malek Fahd on May 24 that it would continue to withhold funding as the school had continued to fail in its legal obligations to provide detailed governance and financial reports.
“This decision was based on an assessment by the department of information provided by Malek Fahd Islamic School Limited which they are required to provide as part of the ongoing Administrative Appeals Tribunal process. The department was still not satisfied at that time that the school met the relevant requirements of the act,” the department said.
“The act requires, among other obligations, that all school authorities operate not-for-profit, be financially viable, be a ‘fit and proper person’, and ensure that funding provided is used only for school education.”
The decision to withdraw $20m of funding follows years of complaints about governance. Malek Fahd was previously asked to pay back $9m to the NSW government after The Australian revealed state funding was being handed to AFIC in the form of inflated rent and management fees.
Malek Fahd lawyer Rick Mitry said the school would fold if it did not adhere to the injunction and that the commonwealth should realise the “seriousness of the consequences”. “There’s no reason for the department to risk the future of a school of its size and education,” he said.
additional reporting: Jennine Khalik