Editorial: Tertiary fraud waste of time and money

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A little over a year ago we learned a tertiary education provider, Te Whare Wananga o Awanuiarangi, had given the players and staff of the New Zealand Warriors league club an 18-week tourism course in one day. An investigation into such funding irregularities resulted in the institution returning $5.9 million to the Tertiary Education Commission.

Since then, investigations into six tertiary institutions, from Southland to the Bay of Plenty, have identified more than $25 million in misappropriation. One of them, we reported this week, has been stripped of its registration.

Why is this happening on such a scale? And how is it that only one of these places has been deregistered? On the face of it, this is fraud with public funds.

The investigators, Deloitte and the NZ Qualifications Authority, report issues such as an under-delivery of teaching hours, student attendance and pass rates. In the case of the now deregistered Manaakitanga Aotearoa Charitable Trust, at Rotorua, which ran courses in Maori performing arts, it delivered fewer than half of the hours for which two of its courses were funded.

It told the funding body, the Tertiary Education Commission, all of its students had completed the qualifications, but the Qualifications Authority found fewer than 15 per cent had achieved the unit standards.

On the question of student attendance, the authority said, "Several months of attendance records appear ... to have been created and signed by students only just prior to NZQA's visit, raising questions about their accuracy and authenticity." That is putting it mildly.

Tertiary education these days covers a multitude of institutions, from universities and polytechnics to community colleges, language centres for immigrants and private training academies.

Youth unemployment would be much higher if school leavers without a job could not find a place in some sort of workforce training. In fact, modern career advice encourages school leavers to acquire broadly applicable skills rather than starting an unskilled job.

Even a course that may open few employment doors is said to be of benefit if it develops good habits such as turning up on time, fulfilling required tasks, communicating effectively and taking personal responsibility for what should be done. That is the theory but the reality is sadly different if the cases that have come to light are typical of the sector.

It is hard to see anything of practical employment value in a course where absenteeism is tolerated, attendance records are falsified, assessment tasks not done or standards reached and certificates are issued anyway. An institution claiming public funds for this sort of course is not only committing financial fraud, it is encouraging the worst sort of workforce preparation imaginable.

It is well past time that when found out, these places face much greater penalties than merely handing back the money if they can. The Serious Fraud Office needs to make an example of someone. A salutary prosecution could wake up the sector to take its social responsibility seriously. It needs to ensure no course is a waste of money and everyone's time.