Malek Fahd Islamic School in Greenacre told to repay $11m to NSW government
Western Sydney’s Malek Fahd Islamic School has been ordered to repay $11m of state funding — but it may challenge the decision.
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Australia’s largest Islamic school has been told to repay more than $11 million in NSW funding after being found to have operated for profit.
The Daily Telegraph can reveal NSW Education Minister Sarah Mitchell has made good on the Berejiklian government’s threat to demand a refund from western Sydney’s Malek Fahd Islamic School.
“The Minister has made the decision to recover the NSW financial assistance of $11.066 million that was paid to the school during the time the school operated for profit in 2014 and 2015,” Ms Mitchell’s spokesman said.
The decision to recoup the funding follows a recommendation from the Non-Government Schools Not-for-profit Advisory Committee.
The school sought an external review of that recommendation through the NSW Civil and Administrative Tribunal (NCAT) but was unsuccessful.
The advisory committee’s findings that Malek Fahd operated for profit stemmed from historic ties with the Australian Federation of Islamic Councils (AFIC), which controlled the school’s board from 1989 to 2016.
The advisory committee found, among other things, that Malek Fahd paid AFIC above reasonable rents for campuses at Greenacre and Beacon Hills, plus provided a $1.4 million interest-free loan to the foundation with no repayment date.
These findings were confirmed by NCAT.
The school board has been entirely replaced since the time it operated for profit.
In response to questions from The Telegraph, the new school board provided a letter recently sent to parents in which chair John Bennett said “it will be business as usual”.
However, Mr Bennett also said correspondence from Ms Mitchell disclosing her move was being studied “with intentions to adjust the school’s budget to accommodate the changed circumstances and seek legal advice for the school to challenge this decision.”
A Malek Fahd financial report made public by the Australian Charities and Not for Profits Commission reveals that in late 2019 the school board commissioned business advisers Grant Thornton to conduct an investigation aimed at showing it was “now applying sound and appropriate governance practices.”
The financial report shows the school recorded a surplus of $824,000 in 2019 after a deficit of $603,000 in 2018.
Revenue rose from $32.8m in 2018 to $41.3m in 2019, mostly due to the federal government reinstating funding.
A Commonwealth Department of Education spokesman said “funding for Malek Fahd Islamic School was suspended between 20 March 2018 and 1 June 2018 due to noncompliance.
“A decision was made on 10 September 2018 to reinstate the school’s approval from 1 June 2018, subject to the board meeting numerous conditions to ensure funding is used appropriately.”
Malek Fahd’s 2020 financials are not yet available.
The school is already repaying a total of $4m in NSW funds over six annual instalments after being found to have operated for profit from 2010 to 2012.
That money will be repaid by 2024.
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