Agreed, in my high school the top student was beaten by a transfer student with better grades. He won all the awards except that the football coach would not play him because on the team he had not paid his dues.
The solution is to honor this student and record that the second place student took an extra year to finish. She should have the award as well.
Unfortunately, there are conflicts like this that occur every year because policies are constantly being tested by new situations. It is strange that a school could not find a better solution.
I got straight A’s and no one asked me to be a valedictorian. And I just spelled valedictorian correctly without using spell check first.