It has also forced the school district to report the incident to the state Department of Education, as is required under the law, possibly triggering an investigation into the incident.
"The kids were never enrolled in this independent-study class," said one parent, who spoke on the condition of anonymity.
Dunphy "was suddenly gone and no one knew why," added another, who also asked that her name be withheld. "It was very weird. It was bizarre."
Dunphy, meanwhile, had been reassigned to Furness High School as an assistant principal, where he continued to earn his annual salary of $124,253, district officials said. He arrived there in late October. However, by Thanksgiving, the district had placed him on paid leave, and on Jan. 15, he resigned, said district spokesman Fernando Gallard.
Dunphy declined to comment, but his lawyer, Harry J. Levant, issued a statement on his behalf.
"After a long career at the school district including a lengthy tenure at CAPA, John elected to resign from the School District of Philadelphia earlier this year to pursue other interests," said Levant, who headed the CAPA Home and School Association until he resigned to represent Dunphy.
Before he was named CAPA principal, Dunphy had been an English teacher at the school for 16 years and also served during the 2012-13 school year as roster chair - overseeing the scheduling of classes and students' credits to ensure they were on pace for graduation.
CAPA students normally take world history in their freshman year. But the 18 students at the center of this situation were enrolled in Italian, also a requirement for graduation and their arts discipline. The class was held at the same time as world history in ninth and 10th grades. And this year, the school lost five teachers including a history teacher, resulting in one world-history class option. The 18 students were not enrolled in the course.
Next year, when the students are seniors, they are expected to take two other history classes to graduate. Adding a third social-studies class, it appears, would have made the students' schedules too cumbersome.
Dunphy began his new job over the summer pretty much alone.
Like many of his colleagues districtwide, he had no assistant principal, secretary or support staff. He also lost five teachers, and was new to the job of high-school principal in Philadelphia.
"The school district knew Whaley was retiring in April, but Dunphy wasn't selected until late July," one CAPA parent said, referring to former principal Johnny Whaley Jr.
"No one was thrilled," the parent said.
Still, Dunphy managed to improve some aspects of CAPA, another parent said, noting that Dunphy increased communication with parents and updated the school's website.
Sometime in October, a couple of students still without world history noticed class credits and grades for the class in their transcripts on the district's website, sources familiar with the case confirmed. The 18 students received the same grade of 83, or B, on StudentNet, sources confirmed.
When some of the students' parents learned about the unexpected grades and began to contact Dunphy, he sent home a letter to the students' parents, a copy of which was obtained by the Daily News.
"This letter is being sent to you because an oversight occurred that will affect your child's current transcript," the letter read. "Last year, an independent course was created for a World History Class for students whom never had taken it before.
"All students scheduled for the course were eventually issued credit although some of the students did not complete the course requirements," the letter said.
Some parents took offense at the letter and, during an Oct. 23 meeting at CAPA, let Dunphy and his boss, assistant superintendent Dion Betts, know how they felt, according to minutes from the meeting, obtained by the People Paper.
"Parents were angered by the letter, which stated that their child had failed the class," according to the minutes. They concluded, according to the minutes, that "the students were originally going to get credit for a class that never existed."
Betts summarized "what was wrong" in this situation: "1. Roster / 2. Phantom class / 3. The failure letter to parents," the minutes read.
One parent acknowledged that Dunphy was "up against a hard place." The minutes note, "The School District is putting principals in an untenable position - depriving the students of their education."
Two days after the meeting, Dunphy was out at CAPA.
The district hired retired administrator Wendy Shapiro, who is paid a rate of $430 a day with district funds, Gallard said. Shapiro began Oct. 28 as acting principal and has reportedly vastly improved the CAPA roster, multiple sources said.
The students who were given temporary fake grades have found a hybrid solution to the world-history credit: part online, part in-class and part after-school course, sources said. They are expected to receive all the core credits needed to graduate.
But the school may still be in hot water. The purported act of inventing a class and crediting students falsely appears to be in violation of the state's Professional Educator Discipline Act, regarding relationships with students: "The professional educator may not . . . Knowingly and intentionally distort or misrepresent evaluations of students," according to the law.
Under that law, conduct such as that alleged by Dunphy is required to be reported to the state Department of Education, which may in turn open its own investigation, officials said. District sources confirmed that the incident has been filed with the department in Harrisburg.
Tim Eller, spokesman for the state Department of Education, said the agency doesn't confirm investigations into mandatory reporting filings until they are concluded.
Meanwhile, people familiar with the situation say they can't help but feel some sympathy for Dunphy, who started the school year under severe budget constraints and historic layoffs that had occurred in the spring.
It's indicative of the stress placed on school administrators across the city, who are working with little to no resources, they say. And that could lead to scenarios in which poor decisions may be made.
Not only were there financial challenges, but there were also a high number of principals new to schools, the district or both, said Robert McGrogan, president of the Commonwealth Association of School Administrators, the principals union.
"You basically handed a lot of people either the first key they ever had or a new key, and said 'go' with no secretary, no roster chairs, nobody in the building except the custodian."
On Twitter: @ReginaMedina