"We believe we have done things according to proper procedure and policy," Mr Ali said.
"We think there is enough clarity. We would like to assure the community members and those who complained that this is being investigated properly."
Al-Madinah is a Muslim school with 550 students at both primary and secondary level. It has previously had governance issues, but a commissioner handed the school back to the board in 2011 and recent ERO reports have expressed confidence in their leadership.
The present investigation is believed to focus on claims the school improperly used ministry money on its buildings. It received a $1.1 million grant from the ministry last year to upgrade a classroom block, but is alleged to have used other school money on the project as well.
As an integrated school, buildings are supposed to be the responsibility of the proprietor, which in this case is the trust. The Government only funds minor maintenance, with the exception of grants for modernisation.
The funds of the school and trust should be clearly separate, to ensure accountability.
However the school's 2013 financial audit noted a lack of clarity, with several transactions relating to the trust being accounted for on the school's ledger. The audit report said it was difficult to distinguish for which entity fundraising was done, and asked for better transparency.
Auditors also raised concerns about the principal's overseas trips. Mr Ali travelled to Australia, Fiji, and the United Kingdom during 2013 and 2014, at a cost of up to $10,000 to the school.
Auditors said they were unable to identify the business purpose for two of the expense claims, and that in one case the amount of the expense claim exceeded the amount of supporting documentation.
They noted the trips were said to be to allow staff to study the Islamic curriculum in schools overseas or to promote the school, but the outcomes weren't always clear.
"It should be transparent to the school and the parents what benefit the school obtained from any overseas trips," the audit said.
A previous report from 2011 noted an acting principal had signed off the principal's expenses at one point. Auditors said that was not acceptable and sign-off had to come from the board.
When asked about the audits, Mr Ali said he had provided reports about the trips and said again that he was sure the proper process had been followed.
He said he didn't know who had made the complaints, but the community was generally supportive of the school.
"We are getting excellent results," he said. "We are trying to produce good Kiwi Muslims who play sport and mix in."
He said there was no rift between the board and the school.
The head of the trust was overseas and unavailable for comment.
Ministry of Education head of sector enablement and support, Katrina Casey, said the ministry could not give details of the issues raised while it was investigating.
