If your child has an IEP, s/he is automatically covered under Section 504 and ADA.
An excerpt from one of the many articles on your situation is: "....Many parents tell us, and we have certainly seen it ourselves in our advocacy, that the school district attempts to make the parent back down when they try to stand up to the district. The ADA at 42 U.S.C. 12203 prohibits 'retaliation, coercion, interference, intimidation or threats' by the school personnel when a parent attempts to exercise their rights under the ADA or when a parent encourages another parent to exercise their rights."
You can learn more about this at
http://www.google.com/search?num=50...tion%2C+coercion,+retaliation&btnG=Search .
It takes a "paper trail " to prove a case however. That's why it's a good idea of getting in the habit of putting conversations of this nature in a "Letter of Understanding" and sending it to the Sp Ed Department.
In this instance, I'd perform this task with just the facts and end it something like, "Is this appropriate handling" by the principal?" Send it via certified mail.
You will not likely get a written response to a letter such as this, but you may receive a telephone call in an effort too soothe you. But the point is the "paper trail" in the event it's needed in the future. (Circumstances change and there may be a time when your child is back in the school district.)
And yes, the sd, gets money from the Federal government for IEP students. IDEA is the federal law governing IEPs. All States must adopt IDEA in order to receive federal money. States are responsible for insuring that their public school districts adhere to education laws.