PRIVATE schools receiving up to $15 million in government funding each year have transferred large sums to the Australian Federation of Islamic Councils, which operates six schools around the country and is the country's peak Muslim body.
The chairman of the Islamic College of Brisbane, Mohammed Yusuf, said in an email obtained by Fairfax Media the ''AFIC arbitrarily withdrew $288,000 from Islamic College of Brisbane's account without our approval''.
In the email to fellow board members he also said: ''I think that all the council chairmen should ask for accountability and greater transparency before it is too late.''
The Australian Federation of Islamic Councils accountant, Agim Garama, is the business manager for Malek Fahd Islamic School in Sydney, Australia's largest Muslim school.
He declined to comment on Thursday.
The NSW government has demanded Malek Fahd Islamic School in Sydney repay $9 million in state funding on the basis that it did not receive services for money it gave to the Australian Federation of Islamic Councils.
The former state Labor government amended the Education Act in NSW to prevent private schools from passing surpluses to their owners.
The Malek Fahd school received an average of $11.7 million in annual recurrent funding from the federal government and $4 million from the state government.
The Brisbane college receives an average of $5.9 million in annual government funding.
Mr Yusuf said that since writing his email the AFIC had returned $288,000 to the Islamic College of Brisbane, saying the issue had been resolved.
''Money was legitimately owed to AFIC for lease rentals going back to 2009,'' he said.
However, Abdul Rahman Yahya, chairman of Langford Islamic College in Perth, said the AFIC was not permitted to take money without permission.
''We have to approve any transfer they make,'' he said.
''If they [the AFIC] give us a tax invoice we pay them for a service. They do an insurance policy and accounting for us, and bill us for that.
''So far we don't have any concerns with the money being transferred out because we keep a strict check on it.''
NSW Greens MP John Kaye said there was a lack of rigorous public accountability for the way private schools spent government funds.
''The shifting of money makes it harder to determine whether these schools are being operated for profit or not'', he said.
A Commonwealth audit has identified poor record keeping in relation to transactions between the schools and AFIC, and a lack of proper documentation, or no documentation, of rental arrangements at the Islamic College of Canberra and Islamic College of South Australia. It said rental payments ''appear to be above market value at the Islamic College of Brisbane''.
Education Minister Peter Garrett has directed his department to pursue these matters with the individual schools to determine whether commonwealth funds need to be returned.