A Hamilton principal embroiled in allegations of financial mismanagement and bullying has resigned, but not before an audit of school finances found nothing fraudulent.

Arnna Graham is leaving St Joseph's Catholic School where, in a decade at the helm, she led it to several high achievements, including being named a "school of excellence".

The fallout from the accusations by a group of parents and teachers has cost Ms Graham her job and divided the school community.

Three senior teachers have quit and one more is leaving and there are fears that the school's annual production, senior camp and other activities will now not go ahead.


At least 11 students have also left the popular decile-eight school, which once had a two-year waiting list.

Allegations including nepotism were levelled at the principal in October but were not upheld.

It is unclear if Ms Graham has received a formal apology. She declined to comment because she is still technically employed by the school until June 29.

Hamilton businessman Chris Mangan, a supporter of Ms Graham and parent of past pupils, said the principal was accused of using school money to buy first-class upgrades on a flight as part of an international work trip. But he claimed the upgrade was free from the airline.

Other complaints related to the way some teachers were rewarded, that friends of Ms Graham were given jobs at the school, and that her nephew was employed as an assistant groundsman.

Mr Mangan maintained the principal declared her conflict of interest and let the board of trustees fill any roles at the school. He blamed her resignation on the "carpark Mafia", a group of disgruntled parents and teachers who had banded together to "get rid" of the principal.

Clark McPhillips, the school's former assistant principal and now principal at St Joseph's in Morrinsville, said Ms Graham was a visionary leader who had achieved amazing outcomes for the school.

Robert Batters, one of the group who complained, said the accusations were never personal. "This has always been about the safety and well-being of the children and members of the [school] community."


He said there was sufficient concern "that the school board chose to resign and the Minister of Education decided appointment of a commissioner was warranted".

The Ministry of Education was first alerted to relationship concerns between the principal, the board, staff and the community in November.

Spokesman Chris Day said there was a two-week investigation and the results were confidential to the board.

The board resigned and commissioner Trevor Kilpin was appointed. He said no fraud was found and it was disappointing Ms Graham left in "circumstances you could only describe as unfortunate".