When Madonna came here to cut a ribbon and plant a tree at a groundbreaking ceremony in 2009, hopes were high for her $15m (£9.4m) elite academy for girls. Three years later, the site looks like a quarried mine, with little activity beyond footballers kicking a ball around.

Madonna's plan was scrapped last year without a brick being laid. NowMalawi has come up with an alternative plan for the eyesore. It will build a monument to national heroes on the spot where the singer once promised to change hundreds of young lives.

Daniel Liwimbi, the country's tourism minister, said: "It was a cabinet decision to construct the heroes' acre at this site."

Unlike countries such as Zimbabwe, Malawi has no heroes' acre. The first president, Hastings Kamuzu Banda, who died three years after losing the country's first democratic poll, is buried in an expensive mausoleum in Lilongwe.

The third president, Bingu wa Mutharika, who died in office in April, was buried at the family mausoleum near his home village in southern Malawi.

The project is likely to cost the struggling southern African nation millions of pounds. Liwimbi said: "Malawians deemed to have done a heroic endeavour of national importance, and selected by committee, which will scrutinise whatever they did, will be buried there."

Madonna has adopted two children from Malawi. After announcing that plans for the girls' academy had been scrapped, her charity, Raising Malawi, said it was teaming up with the non-profit group buildOn to set up 10 schools instead.

This provoked criticism from Malawian education officials over a lack of consultation. Raising Malawi's website said the third of these schools was completed last month. The charity also claimed it would support scholarships for 10 girls to attend four years of secondary school.

Malawi's president, Joyce Banda, expressed reservations about Madonna's ventures during an interview in April. "Madonna came to Malawi and Madonna came to build a school, an academy like the one Oprah [Winfrey] built [in South Africa], but she changed her mind so I have a problem with a lot of things around the adoption of the children and the changing of the mind and then coming back to build community schools," she said.

Madonna's Malawi charity 'squandered millions

The managers of Madonna's charity in Malawi have been ousted after they squandered $3.8m (£2.4m) on a school that will never be built, it has been reported.

The damning audit came as Raising Malawi confirmed that it has scrapped plans for a $15m elite academy for girls.

The charity's executive director, Philippe van den Bossche, the partner of Madonna's former personal trainer, left in October after criticism of his management style and spending at the school, according to the New York Times.

"These included what auditors described as outlandish expenditures on salaries, cars, office space and golf course membership, free housing and a car and driver for the school's director," the paper said.

In a shakeup at the charity, the board of directors has been removed and replaced by a caretaker board that includes the 52-year-old singer and her manager, it added.

The abandonment of the Raising Malawi Academy for Girls – backed by prominent Hollywood figures and Madonna's associates in Kabbalah – was announced in January. This caught the Malawian government by surprise and caused anger among villagers who had surrendered their homes to make way for a 117-acre construction site near the capital, Lilongwe.

When the project began to turn sour, Madonna, who has reportedly invested $11m, turned to the Global Philanthropy Group for help. In its report on Raising Malawi's work, seen by the New York Times, it was critical of the way Bossche oversaw both the building plans and the curriculum.

"Philippe's level of mismanagement and lack of oversight was extreme in both aspects of the project and the lack of success of the players on the ground is in large part a result of his inability to effectively manage project plans, people and finances," it was quoted as saying.

The audit also gave a withering verdict on Anjimile Oponyo, who was supposed to head the school. "Her charisma masks a lack of substantive knowledge of the practical application of educational development, and her weak management skills are a major contributor to the current financial and programmatic chaos."

Trevor Neilson, a founder of the group, said $3.8m had been spent on the unbuilt school, much of it on architects, salaries and two cars for employees who had not yet been appointed.

"Despite [this outlay], the project has not broken ground, there was no title to the land and there was, overall, a startling lack of accountability on the part of the management team in Malawi and the management team in the United States," he was quoted as saying.

Construction of the academy was also delayed over a dispute between Raising Malawi and villagers who claimed they were not adequately compensated for land. The building had been due for completion in December this year.

Michael Berg, a co-director of the Kabbalah Centre and co-founder of Raising Malawi, accepted defeat this week. He wrote to the centre's contributors: "A thoughtful decision has been made to discontinue plans for the Raising Malawi Academy for Girls, as it was originally conceived."

But Madonna, who has adopted a boy and a girl from Malawi, insisted the charity will continue to work in the country. "There's a real education crisis in Malawi," she said. "Sixty-seven per cent 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."

Some 200 people were removed from Chinkhota village, on the outskirts of the capital, Lilongwe, to make way for the Raising Malawi Girls Academy.

Most of the villagers were born here and thought the land belonged to their ancestors. They threatened to block the project until Madonna dipped into her pockets to compensate them with $500,000 (£312,800). The Malawian government, which has often defended Madonna's charitable work, helped evict the villagers, claiming it was state land meant for development projects.

Chinkhota became a building site – but without a building. Construction of the academy was delayed over a dispute between the Raising Malawicharity and villagers who claimed they were not adequately compensated for land.

The building was due to be completed in December this year. However, the earth-moving machines that had been landscaping the area have disappeared. Villagers feel betrayed and accuse Madonna of breaking her promise. Maxwell Matewere, Malawi's leading children's rights activist, said Madonna should not "dump" the project.

Matewere, director of Eye of the Child, led two unsuccessful attempts to prevent Madonna adopting two children – David, five, and four-year-old Mercy – from Malawi after their mothers died.

He said the pop star was trying to "run away from long-term obligations" and she should go ahead with the academy because "you educate a few to educate others. She must borrow a leaf from others like Oprah [Winfrey] who have done it in South Africa."

Madonna is funding several charities in Malawi, including homes for children with Aids. She has built a multi-purpose community centre 30 miles from Lilongwe which looks after more than 8,000 orphans. "In a country where only 33% of Malawian girls attend secondary school, I realise that the plans we had in place for the Raising Malawi Academy for Girls simply would not serve enough children. My original vision is now on a much bigger scale."

She said she was in the process of implementing several changes and additions to the management of Raising Malawi in the US and Malawi.

Madonna said she had teamed up with Trevor Neilson and his team at Global Philanthropy Group to "shift the strategies so that we can accomplish our goals with more efficiency as we continue to consult our government partners in Malawi".

She said Raising Malawi was focused on an approach which includes building schools within communities across the country. A pilot school is on the cards that will "address the barriers keeping girls from secondary education".

Neilson said the new community-based approach by Raising Malawi "will provide the opportunity for many more girls to receive a quality education".

Madonna's spokeswoman did not comment today but said she would seek further information from the singer's management.

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