Myron B. Thompson Academy officials fired back Friday at a state performance audit that called employment and procurement practices at the school "possibly fraudulent," saying the school has streamlined its procedures to address concerns but that it never did anything wrong.

"There was no fraudulent intent," said Myron K. Thompson, son of the school’s namesake and co-chairman of the academy’s local school board.

In response to the state auditor’s characterization of practices at the school as an example of "waste and abuse," Thompson said, "Those terms are inflammatory. They assault our character, and we don’t like it at all."

The scathing performance audit of Hawaii’s charter school system concluded that charter schools have been spending public money with little oversight or accountability for student performance. The audit singled out Thompson Academy, calling spending practices at the school "illegal."

About 500 students attend Thompson Academy, which offers online classes.

The audit is expected to further turn up the heat on the school, whose administrators have been under fire for their spending, employment and procurement practices. Charter school officials said some concerns have been sent to the state attorney general’s office, which is investigating.

The audit said Thompson Academy "excessively" increased salaries, leading to $133,000 in overpayments in one year to employees, who also "benefited from irregular employment and procurement practices."

In some cases, the audit said, overpayments resulted in Thompson employees being paid two to three times what they should have been earning. The audit notes the school’s registrar, listed as part time, got a "differential" that boosted his salary 212 percent to $55,200 annually.

Myron K. Thompson said the audit failed to point out that the registrar, though listed as part time, actually worked full time but was paid from different funding sources. He said the same was true for the part-time school administrative services assistant, who was earning $69,599 a year.

Malia Chow, co-chairwoman of Thompson Academy’s local school board, said differentials have been reviewed for employees, and in cases where the payments "were not appropriate, there was corrective action taken."

Thompson and Chow did not have information on which differentials were stopped.

Thompson added that a host of improvements to accounting and procurement practices at the school have been made over the past year to address concerns, including ensuring all spending is closely monitored.

The school has also hired two business managers.

"As a result of all these inquiries, we have tightened up" practices, Thompson said, adding that the board and school’s administration "stand unified." At the Kakaako school, he said, "There is a strong commitment to being ethical and in compliance and doing the right thing."

Thompson also said, "We don’t think we’ve done anything wrong."

The audit also found employees who were paid for work they didn’t complete, nonemployees who approved purchase orders and academy "transactions" with relatives without written disclosure to the board.

In response to the report, legislators, Charter School Review Panel members and others have called for speedy improvements to charter school operations and changes aimed at giving the panel more power.

Some 9,100 students — or 5 percent of all public school children in Hawaii — attend public charter schools. Enrollment has increased steadily over the past decade, growing by 900 students alone from last year.

Though publicly funded, charter schools are not operated under the state Department of Education, giving them greater autonomy to act as real-life labs for innovative teaching practices. The schools are overseen by local school boards, whose charters can be revoked by the review panel.

Thompson Academy wasn’t the only school whose spending practices were questioned in the state audit. The report highlighted "unrestrained spending" at Kamaile Academy in Waianae, which spent $18,000 on "incentive" trips, including jaunts to a water park and an ice skating rink.

Kamaile no longer spends money on student incentives, the school said.

The audit also questioned employment practices at several other schools.

Thompson said questions about the Thompson Academy’s procurement and employment practices "will only strengthen us" in the long run, and pointed out student achievement at the school is rising.

"We continue to perform because we’re an excellent school," said Thompson. "We’re being singled out in this whole thing. There are a lot of other charters out there that have issues. We’ll do fine in the end."