Sajid Raza was first arrested just over a year ago by West Yorkshire Police investigating the free school in Bradford.
He was arrested again over more fraud allegations later in the year and released on bail.
In October last year detectives passed a file on the case to the Crown Prosecution Service but no decision has been announced about it to date.
A spokesman for West Yorkshire Police said today: “A 42-year-old man arrested on suspicion of fraud offences answered his bail and has been bailed pending further enquiries.”
Mr Raza was dismissed by the school in August last year following a disciplinary investigation.
A statement from the Kings Science Academy at the time said his dismissal was not linked to the ongoing police investigation. When asked why Mr Raza had been dismissed the school’s chairman of governors John Bowers said the decision had been taken because “governors needed to ensure the success of the academy moving forward.”
The school has joined the Dixons academy chain in Bradford and was renamed Dixons Kings Academy at the start of the new term.
West Yorkshire Police launched its investigation into what was the Kings Science Academy in October 2013 after a draft of an internal audit report from the Department for Education was leaked to Newsnight. The DfE then published a redacted version of it just hours before a programme was broadcast.
The DfE report alleged that the school had submitted fabricated invoices to claim public money from the department. The DfE internal audit investigation team report recommended recovering money and reporting the matter to the police.
At the time the school issued a statement which said that there had been no misappropriation of funds and that all expenditure had been academy related.
The DfE investigation report was dated May 2013 but the case was not subject to a criminal investigation until after the matter was leaked to the public.
This has led to questions about why the Government failed to ensure allegations of fraud at a free school were investigated.
The DfE said it reported the matter with a phone call to Action Fraud - a call centre for financial crimes - in April last year.
At that point the matter was wrongly recorded by Action Fraud as being for information only meaning it did not result in a criminal investigation.
Action Fraud are said to have apologised to the DfE for the mistake which only came to light after Newsnight was broadcast on October 2013.
However the department has faced questions over why it failed to act when it was told six weeks earlier by Action Fraud that the matter had only been dealt with as an information report and would need to reported again as a potential crime before police would investigate.
The Yorkshire Post obtained an email from Action Fraud to the DfE - dated September 5, 2013, making clear the case had only been dealt with as an information report.
This was in response to a DfE email asking for an update on the case.
There are also questions about how the matter was wrongly recorded as being for information by Action Fraud.
The DfE has said it included all the critical information on its findings of potential fraud to Action Fraud. But the department also says it has no record of what was said in the phone call.
In November last year the department removed a warning notice it had placed on the Kings Science Academy in 2013.
Governors were told they had done enough to convince the Government that the notice could be removed.