The federal government is sticking to its decision to revoke funding for the Islamic College of South Australia, after an internal review.
The college applied for the review of the initial February decision and Education Minister Simon Birmingham has confirmed it found the school is still not complying with necessary standards.
He says the school has not met a set of strict conditions set for it last year, including improving its governance and financial management.
"It is disappointing that after the number of chances this school has been given and the constructive work of the department, the school has still failed to meet the reasonable standards and expectations placed on them," Senator Birmingham said in a statement on Thursday.
"This decision has not been taken lightly. However, the department was left with no choice."
The minister says there has been a constant turnover of board members at the school since 2015.
There were also reports the latest principal had been sacked after the board rejected a proposed takeover by the Perth-based Australian Islamic College.
Federal funding to the Adelaide school is worth about $4 million a year.
The college has also lost about $1 million in annual funding from the SA government.
Senator Birmingham says the college now has 28 days to appeal the government's decision in the Administrative Appeals Tribunal.