The Auditor-General will not investigate how the Government has managed contract negotiations with charter schools or how their applications were handled.

Opposition education spokeswoman Nikki Kaye made a request to the Auditor-General for an investigation in February.

Kaye had raised concerns including that Education Minister Chris Hipkins and the Ministry of Education put undue pressure on partnership schools to terminate their contracts and that Hipkins had made public comments that indicated he had a closed mind about the future of the schools.

Kaye also said Government Ministers Kelvin Davis, Willie Jackson and Peeni Henare had potential conflicts of interest because of their personal connections with particular schools and those schools received preferential treatment.

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In its response, the Auditor-General said its primary role was to report on how public money has been used and what has been achieved with it but could not inquire into or question Government policy.

It said the contract negotiations and the applications for new schools were the result of the Government's clear policy to remove partnership schools.

"Governments are free to pursue their chosen policies, even if some people or organisations consider that they will be negatively affected by policy changes.

"The partnership school contracts allow for termination by mutual agreement or at the minister's convenience. The ministry has told us that the contract negotiations with schools are being approached on a "without prejudice" and case-by-case basis."

The contract and application processes were being managed by different divisions in the ministry and staff maintained separation between the decision-making processes.

"The ministry has also told us that it considers it desirable to ensure that changes in the schooling of students are managed seamlessly. The ministry would like to ensure that there is no avoidable gap between a partnership school closing and the opening of a new state school," the Auditor-General said.

On the issue of ministers' potential conflicts of interest, the Auditor-General said Cabinet had no formal role in decisions about individual partnership schools.

"Only the minister is responsible for making decisions on the termination of partnership school contracts and applications to establish new state schools. There have been no suggestions that the minister has any potential conflicts of interest."

All 12 existing charter schools have applied to become state or integrated schools.

The Ministry of Education will consult on the applications and assess them before reporting back to Hipkins next month.

Hipkins introduced the Education Amendment Bill, spelling the end of charter schools, in February.

Five charter schools scheduled to open this year will no longer do so.

Hipkins wanted existing charter schools to wind up before the end of their contracts by mutual agreement but if early termination was not agreed by both parties he reserved the right to issue a notice of "termination for convenience", by the middle of this month.

The final cost of removing the charter school model is unknown. Financial compensation for schools that have their contract terminated would likely cost up to $1 million in financial compensation to the schools, according to a Cabinet paper.