Rutlish School for Boys, in Merton Park, south London, has had its budget withdrawn after a routine audit revealed it was not being managed effectively.

Parents were informed by letter of the inquiry. They were told that the education of pupils would not be affected by the education authority’s decision. It is unusual for a school which is not deemed to be failing to have its delegated powers removed.

Rutlish was at the centre of a row earlier this year when too many boys applied to do computer studies GCSE, and pupils were admitted to the course by lottery. The school admitted that it had resolved the matter by asking the school secretary to pull names out a hat to decide who should be given a place.

The school was forced to put on extra after-hours classes for the pupils who had missed out, after parents reacted angrily to the move.

Since then, parents have expressed concerns that the school had a shortage of books and other equipment.

A spokesman for Merton Council said: “The council, as the local authority, the school governing body and the headmaster are working closely to take steps to rectify the matter. The audit investigation is still on-going.”

He added that the local authority and the schools would work together “keeping the best interests of Rutlish and its pupils at heart”.