The move follows the revelation that managers spent £2.4 million ($3.8m) on plans to create a school that will never be built.
The executive director of Raising Malawi, Philippe van den Bossche, departed the organisation in October following criticism of his project management style and use of expenses at the school.
"These included what auditors described as outlandish expenditures on salaries, cars, office space and a golf course membership, free housing and a car and driver for the school's director," said The New York Times.
A caretaker board has now been implemented at the charity, which includes the '4 Minutes' star and her manager.
The singer's charity has also been at the centre of controversial plot issues in Malawi, where local villagers claim to have not been adequately compensated for being forced off their land to make way for the now-cancelled construction of the Raising Malawi Academy for Girls.
Madonna has asserted that she will continue to work in the country, stating: "There's a real education crisis in Malawi. 67% of girls don't go to secondary school, and this is simply unacceptable. Our team is going to work hard to address this in every way we can."