16/02/2017 1:46 PM AEDT | Updated 16/02/2017 2:49 PM AEDT

The Government Just Pulled Funding For The Islamic College Of South Australia

Concerns relate to independence, financial management and governance.

Wayne Taylor/Fairfax Media
Federal Education minister Simon Birmingham: “This decision has not been taken lightly.

CANBERRA -- After being given a "number of chances" over school governance and financial management, Education Minister Simon Birmingham has withdrawn millions of dollars' worth of federal funding for the Islamic College of South Australia.

Around 600 students, their families and teachers must now be supported, including the possibility of finding new schools for students, with federal funding to be cut off at the end of term one, in mid-April.

"My heart goes out to the parents, the teachers, the students at the Islamic College of South Australia," the Minister told reporters in Canberra.

"They are the innocent victims of mismanagement of this school.

"But ultimately, we can't stand idly by no matter how much we care about those students or teachers and let mismanagement continue when taxpayers' dollars are at stake."

The college, one of six Islamic schools warned in late 2015 with non-compliance notices by the Federal Education Department, received $4 million Commonwealth funding in 2016.

Operated by Muslims Australia formerly known as the Australian Federation of Islamic Councils (AFIC), the concerns relate to independence, financial management and governance arrangements.

It is not certain the college will close, but state and federal education officials are preparing for the possibility.

"It is frustrating that after all this time the school is again in a situation where there have been multiple resignations from the Board as recently as last week -- including the resignation of the Principal," Birmingham said.

"There has been a constant turnover of Board members at this school since 2015. As the entity responsible for the school, the current board must take responsibility for all decisions past and present."

The school has 30 days to seek a review.