WOWAN State School's P&C has accused big business and bureaucracy of ripping off its Building the Education Revolution grant.
In May Education Queensland (EQ) advised the school the cost of building its new library was $850,000.
But within weeks the school was advised the project would be subject to a cost overrun of $110,000, taking the total cost to $960,000.
The vice-president of the school's Parents and Citizens' association Sib Torrisi is also the chairman of the Wowan State School building committee.
Mr Torrisi said the P&C had rejected EQ's suggestions of a smaller building or demountables.
He said the P&C had got a quote from Cavalier Homes in Biloela for $589,000 to build the library using the original proposal.
MR Torrisi said the $371,000 difference in the costings was scandalous.
“The bureaucracy and big business have got together,” Mr Torrisi said.
“The officials flick all the contracts to big business, who contract it out to local builders and keep the difference for big management fees.”
Mr Torrisi said he was trying to get the best deal for the school.
“I can't believe they're doing this to us,” he said.
Cavalier Homes is not accredited under the Building the Education Revolution (BER) scheme, so the project is in limbo.
Mr Torrisi said Cavalier Homes had started the accreditation process.
Federal Member for Flynn Ken O'Dowd raised the issue in Federal Parliament on Wednesday night.
“The chairman of the Wowan State School Building committee (Mr Torrisi) has been frustrated in his dealings (with) the department because of their arrogant we-know-best attitude, and their insistence to give the contract to a large multi-national company,” Mr O'Dowd said.
“Why should the government allow this ridiculous situation to continue?”
Mr O'Dowd said Baralaba State School had also been advised of a cost overrun on their BER project.
Mr O'Dowd has written to the Minister for Education Chris Evans asking he intervene and direct Education Queensland to work with the schools and use local contractors.
EQ's acting deputy Director-General for infrastructure services Graham Atkins denied there had been cost overruns at either school, stating both projects would be managed within the budget.
Funding of $850,000 was allocated to Baralaba State School for their BER project.
Tenders for both projects had been over the budget.
“Rather than significantly reduce the size of the building area and reduce the amount spent on fit-out elements, the project team consulted the schools on modular building options that will cater for the schools' needs, within the budget,” Mr Atkins said.
He said the project team would visit Baralaba and Wowan schools within the next two weeks to discuss the modular building proposal.
“The tender prices received for BER projects, including those over-budget, remain commercial-in-confidence as it may put at risk the results (of) future competitive tendering,” he said.
Mr Atkins said he was unaware of Cavalier Homes' pre-registration.