BRISBANE, Feb 16 - The Queensland Audit Office released its second report into Indigenous leader Noel Pearson's school on Thursday, finding no evidence of deliberate financial mismanagement by the Department of Education or Pearson's Good to Great Schools Australia organisation.
But the department was found to have "poor financial stewardship", breakdowns in internal controls and "routine non-compliance" by staff when it came to internal enrolment policies.
The report found the department "routinely overstated effective enrolment numbers" by 116 between 2010 and 2016, which provided an extra $815,000 in funding to the school.
The Queensland Audit Office said it was the result of "poor record-keeping by school staff" who did not understand and comply with departmental policies.
This was in part due to the fact the two partners signed a memorandum of understanding in December 2009 but a formal agreement was never implemented.
"When the relationship was tested, the lack of clarity around roles and responsibilities between partners, combined with differing perspectives about what the partnership meant, has led to increased distrust and stalled negotiations in formalising a suitable agreement," it read.
The review of the school at Aurukun was sparked by ongoing violence from youths in the community, culminating in the schools's principal being carjacked twice and teachers forced to evacuate last year.
The Department of Education took back control of the school last year.
The Queensland Audit Office made three recommendations, the first of which was that the department implement binding agreements for any arrangements with external education providers before it supplied funding.
It also recommended it provide "adequate training and supervision to its staff" when these agreements are entered into and that it reviews its governance arrangements.
Education Minister Kate Jones told state parliament a new agreement with Pearson's other schools at Hope Vale and Coen was close to being finalised.
"We should be allocating teachers in schools based on the number of school-aged students in a community, not the number of students who attend school on a particular day," she said.
More binding agreements for Aurukun school
A report into the trouble-plagued Aurukun State School has found no evidence of deliberate financial mismanagement but points to problems with enrolment numbers and record keeping.