Do yourself a favour and look at the rules page on the formula schools site.
The engine is an Irvine 20. Irvine are normally associated with aero engines and looking at the heatsink and crank shaft I would suggest that this is in fact an aero engine, which is not ideal for car use.
The rules say the engine may be modified but must be "identifiably the same". I guess this rules out changing the heatsink for a larger one, so make sure that the body design allows plenty of airflow around the heatsink. This does not rule out porting and polishing the engine internally. Leave this work to someone with experience, but consider adding teardrop grooves to the schneurle ports and cutting away the skirt at the front of the piston so that it doesn't mask the boost port at BDC. Make sure that the ports in the sleeve match the ports in the crankcase, but only grind the outside of the sleeve. Do not grind to the chrome plated inside of the the sleeve as the plating may start to flake off. Polish afterwards to remove any burrs left by grinding.
Fuel is also unrestricted according to the rules, so rather than removing shims to increase compression use a fuel with higher nitro content. Try 25% nitro to start with. I would recommend a colder plug for higher nitro fuel, a NovaRossi #6 or C6S would be a good place to start.