Alberta Education has shut down a private Christian school in Cold Lake following an audit that found questionable spending and conflicts of interest.

Trinity Christian School Association, which received more than $5.6 million in Alberta Education funding for the current school year, has lost its registration and accreditation effective immediately, the government announced Tuesday.

In a letter to Trinity's board chair Tuesday, Alberta Education said the decision was made because Trinity "has failed to appropriately supervise its home education program" and "has failed to demonstrate accountability for funding received from the government of Alberta."

An audit found that public funding from Trinity Christian School Association was directed to a third party, Wisdom Home Schooling Society, even though Wisdom had "no relationship" with Alberta Education.

In 2014/2015, Wisdom spent $5.2 million, or 90 per cent, of all the home-education grant funding that had gone to Trinity, the audit found.

Wisdom was also found to have retained $988,000 in unclaimed parent funding over the past three years.

"The information provided through this review was alarming," Education Minister Dave Eggen told a news conference.

'Grave concern'

He said it was of "grave concern" that Wisdom had retained nearly $1 million in unclaimed parent funding even though it was not the grant recipient.

"We will pursue our public funds which meant for these students, most aggressively, to ensure that we have those returned."

Alberta Education said it will provide the findings of its financial review to the Canada Revenue Agency and to the RCMP so those agencies can determine if further investigation is warranted.

Trinity Christian School in Cold Lake, Alta., has been shut down by Alberta Education. (www.trinitychristian.ca)

The closure of the Trinity Christian School Association will affect 13 classroom students and another 3,500 home-schooled students -- about 30 per cent of all home-schooled children in Alberta, Eggen said.

Parents have been informed and Alberta Education will help students register with other public or private school authorities.

Conflict of interest issues

The audit found conflict-of-interest issues involving senior management and related-party transactions, including terms of employment contracts and terms of leases with related parties, the government said.

It also uncovered inappropriate expenses, such as for babysitting, funeral costs and "double dipping" for mileage claims.

Eggen said he was first informed of potential issues in July.

"After contact with Trinity, we were not getting satisfactory results so we sent on-site auditing into the Cold Lake area," he said.

"The review indicated that some government funds were being used to purchase liquor, gift cards, expenses related to baby-sitting and funeral arrangements as well."

Two families in charge

The boards and administration of Trinity Christian School Association and the Wisdom Home Schooling Society were largely represented by two families.

The government review found family members approved employment contracts for other family members. The total amount paid in salary to these two families is more than $2.76 million in the last three years.

The audit found Trinity and Wisdom spent 32 per cent of their expenses on office and administration compared to 3.4 to 5.6 per cent in public boards..

The review found Wisdom leased two spaces, one at a cost of $105,000 a year, a rate nearly 10 times what was felt was reasonable.

The second facility was constructed using $500,000 in government funding paid to Trinity, then sold by Trinity to a foundation which then leased it back to Wisdom.

The review found 90 per cent of spending of the public money given to Trinity was spent by the home schooling society.