The Education and Manpower Bureau has demanded an answer to allegations that the management of the English Schools Foundation is dysfunctional and its finances poorly controlled.
This followed the leaking last week of a letter by former chief executive Jonathan Harris, previously director of education for Cornwall. The letter was written shortly before his sudden resignation last June, just six months after he took the job.
In his letter, Mr Harris said that if the ESF were inspected by Ofsted it would be classified as an authority with "serious weaknesses" or, at best, underachieving.
He called for chairman Jal Shroff to recognise the need for change and accused senior managers of wasting money on long lunches and afternoon drinking sessions.
Arthur Li, secretary for education and manpower, echoed Mr Harris's call for an independent audit of the ESF and said he would come down on it "like a ton of bricks" if it was found to be wasting public money. The government subsidises about a third of ESF costs.
Mr Harris's letter to Mr Shroff was leaked anonymously. Mr Harris said he did not know the source of the leak and last week declined to comment because of a confidentiality agreement.
The ESF, which runs 19 schools teaching 12,000 students, has submitted its response to both the government and to parents and teachers, refuting most of Mr Harris's claims.
The crisis came one week after a bitter battle over the appointment of Mr Harris's successor. A selection committee chose Mike Haynes, a parent and member of its executive who works in the insurance industry, prompting opposition from parents and staff on the grounds that he was not an educator.
Anger reached a climax when parents stormed a joint meeting of parent-teacher associations that was being chaired by Mr Haynes and was due to vote on whether to support his selection, bringing the meeting to a halt.
Opponents also questioned the process. Mr Haynes was a member of the three-member selection panel before submitting his application. Once shortlisted, he called for volunteers to sit on the final interview panel.
Christine Houston, the parent who led the campaign against Mr Haynes, said:
"We had an absolute sense of clarity that the process had been corrupted.
All we were asking was that it be started again." Mr Haynes was offered the job ahead of an assistant director of education for New South Wales and a deputy minister of education for Manitoba in Canada.
But Mr Shroff failed to secure enough votes on the executive to endorse the appointment, sparking his resignation, along with that of the vice-chairman and treasurer.
The foundation is due to meet on March 11 to elect a new chairman and vice-chairman. The executive committee will then begin another search for a chief executive.