The government is under fire for awarding a charter school a contract before ensuring it had somewhere to teach its kids.
Villa Education Trust was unable to find a big enough site to lease before it opened its Middle School West Auckland in January, and is now operating part of its school from ministry-owned land in Henderson. It is has not paid rent there for the first half of the year.
The Ministry of Education said having premises to teach from were not required as part of the school contract, and the rent for its land will be repaid.
But Labour and a teachers' union says the process was "botched".
"Villa Education Trust have received over a million dollars to set up a school and now they're effectively double-dipping by using Ministry of Education premises they're yet to pay rent for," education spokesman Chris Hipkins said.
"Why on earth did Hekia Parata sign a contract guaranteeing the Villa Trust funding for 160 students when they clearly don't have the capacity to house that many kids?"
Charter or "partnership" schools are different in that they are privately run and publicly funded, and were introduced last year as part of Act's confidence and supply agreement with National.
Villa has two schools, one in South Auckland which opened last year, and one in West Auckland, opened this year. The West Auckland school was approved in July 2014 and a contract signed shortly afterwards.
The Ministry of Education said the school said it found a building in Glendene, in October.
The school then said the Glendene site was unable to house all of its 160 students.
Villa Education Trust applied for $300,000 extra of renovation money and informed the ministry in the meantime it would look for a satellite site.
In November, it said it would house 40 children on ministry premises in Henderson, sharing the site with a private school run by the Nga Kakano o te Kaihanga Trust.
Villa took on Nga Kakano's more senior students, but said there was no formal partnership between the two.
Written Parliamentary questions to Minister of Education Hekia Parata from Mr Hipkins reveal that Villa is yet to pay the Government any rent for the use of its site.
Ms Parata said the ministry were currently finalising a lease and once finalised the sponsor will pay back-dated rent to the start of the year. The extra $300,000 for renovations was still under review.
Minister Hekia Parata did not want to comment further, saying it was an operational matter.
Mr Hipkins called the system a "rort".
"Unfortunately this whole thing appears to be an unnecessary money-go-round and the tax-payer is likely end up the loser," he said.
The head of the Post-Primary Teachers' Association, Angela Roberts, said she was also concerned about the lack of transparency and wanted a light shone on the expenditure and funding side of charter schools.
She pointed out other schools seemed to have been given classrooms by the ministry - something going on at the same time there were well-documented problems with mould and damp in state schools around the country.
"The Ministry of Education seems to be bending over backwards to make the political experiment of charter schools succeed," Ms Roberts said. "This doesn't do any credit to them as stewards of the education system."
Villa Education Trust is yet to respond to questions. Nga Kakano did not want to publicly comment as it is focused on trying to re-open its school next term.