Leaders of the Isles of Scilly’s only school have been cleared over action taken against their former head teacher.
Bryce Wilby was suspended last spring and subsequently resigned amid allegations of financial irregularities.
The former head firmly denied any wrongdoing and is believed to be pursuing legal action.
However, his departure plunged the governing body of the school and the Isles of Scilly Council into turmoil, prompting the Department of Education to launch an investigation.
The inquiry has now been concluded and although some “errors of procedure” have been highlighted, both council and governors have been informed that “no action or enforcement by the Department was required.”
Ben Julian, who took over as chairman of governors at Five Islands School last autumn, said they could accept the report - in spite of some of their evidence apparently not being taken into account.
“Governors acknowledge the questions raised by the report,” said Mr Julian.
“Although in many cases there is pertinent and significant factual information that appears not to have been considered, the Governors do not wish to divert their energies to a point-by-point rebuttal.
“We are resolved to focus all activity on improving governance at the school in line with the recommendations of the report.”
"Governors are fully committed to putting the needs of the children and school first and to drawing a line under the difficulties of last year."
Mr Julian said Five Islands School had experienced a period of “unprecedented challenge and change” but “continued to outperform most mainland schools.”
“We are exceptionally proud of the pupils and staff at Five Islands School,” he said.
“Through a difficult time the school has consistently produced outstanding results.”
Mr Julian highlighted a recent Ofsted inspection which said that “pupils achieve well… the curriculum is outstanding… pupils’ behaviour is outstanding… teaching is good overall and some is outstanding.”
A new head teacher, Linda Todd, took over at the school this term and Mr Julian said the governing body had commissioned an independent external review of their work.
He said its report was due to be delivered later this month, although reforms of the board of governors had already taken place to make it a smaller group.
Mr Julian said a further review would be carried out this academic year to consider what he called “alternative structures” for the Five Islands School
“This will include but not be limited to academy status, as well as the status quo,” he said.
A spokesman for the Isles of Scilly authority said the Department of Education’s letter was being considered by the council.
He added that the minister concluded that, although the local authority “made some errors in dealing with procedures” there would be no further action.
“The department also recognised the very difficult situation which was faced by the council, the community and the school at the time,” said the council spokesman.
“Members and officers of the Council of the Isles of Scilly continue to be committed to working closely with the governing body and the Diocese (of Truro) to support the school, and will be providing the Minister with a written report outlining the school improvement measures which have been put in place, as endorsed by Ofsted.”