A primary school has denied financial mismanagement after trustees were flown to Ibiza for a board meeting.
Langdale Free School in Blackpool, which has 125 pupils, was investigated by the Education and Skills Funding Agency following a tip-off.
The school, which graded as 'Good' by Ofsted at its most recent inspection, was investigated following allegations about poor financial management and the misuse of public funds.
The probe found the school's revenue deficit was about £226,000 larger than had been budgeted.
It also found the school, owned by the education group Montague Place, was not 'transparent' about the cost of flying trustees to a meeting in Ibiza.
Langdale Free School (pictured) in Blackpool, which has 125 pupils, was investigated by the Education and Skills Funding Agency following a tip-off
Montague Place paid for the trip, but failed to report this in their audited accounts, according to a report by the ESFA.
The chairman of the trustees has hit back, saying a damaging public report is 'full of factual inaccuracies'.
Mar Peters said: 'The board is considering what to do next but we can't have these lies. It's a thorough misrepresentation of the facts and we will continue to take advice on what to do next.'
Langdale was a fee-paying independent school run by Montague Place, before it converted into a free school - which is funded by the government but not controlled by the council - in September 2013.
The ESFA opened its investigation last October after a number of allegations were made relating to poor cash management, the use of public funds for overseas meetings, redundancies being made due to high salaries, the misuse of pupil premium and sports premium, and school finances being overseen by 'another organisation who are all on the governing body and whose salaries are paid for by the trust', the report said.
The probe found the school, owned by the education group Montague Place, was not 'transparent' about the cost of flying trustees to a meeting in Ibiza (pictured)
It said findings from the review 'confirmed that there are weaknesses in financial management', governance, and breaches of a handbook given to academies that must be complied with.
But Mr Peters moved to reassure parents. He said : 'We are actually excellent at financial management at the school. It was never facing a [financial] black hole, it was not, and it will not. The ESFA are simply wrong.
'There will be a surplus this year of between two and four per cent, which is normal.'
Mr Peters said the ESFA is wrong because the school actually spent £175,000 on buying a nearby building - which will 'provide more facilities for the children and allow us to grow into it over time' - and should have been counted as an asset and 'not a deficit'.
He denied misusing public money over the trip to Ibiza, saying the flights cost 'less than £900, which is significantly less than what would have been the cost of the directors travelling to and staying in Blackpool for two days'.