"Someone should have realised we were not fully compliant and fixed it, " she said.
Dr Donovan Wearing took over as chief executive at the centre in 2008 and died suddenly, only weeks after the TEC investigation was made public late last year.
Dr Wearing had spoken to staff at the campus about the investigation on January 21 this year. The 52-year-old father of six was later that day found in a critical condition. He was taken to Wellington Hospital, where he died that night. His death was referred to the coroner.
A SFO spokesperson said matters "related to Taratahi Agricultural College" were under investigation but would not comment on details.
Established in 1919, Taratahi owns and operates assets valued at more than $100 million. The centre has 135 staff and more than 2000 students; managing 50,000 stock including sheep, beef and deer, and milks a herd of 2500 cows.
Taratahi has a resident campus near Masterton and non-resident campuses in Northland, Auckland, Waikato, Bay of Plenty, Taranaki, Manawatu, Hawke's Bay and Southland.
Mrs Mullins said the centre was working with the commission on repayments and will repay $1.1 million by the end of this year.
"There's a couple of options that we have available to us. Just be really careful, because there are people's jobs here. Our lease of Koromiko [Farm] is up this year and we do have livestock we will be able to sell and put towards this. We do have a small number of reserves as well," she said.
The repayment of the funds will not affect the delivery of education at the centre, Mrs Mullins said.
Taratahi won the 2014 Primary ITO Trainer of the Year award and had rapidly expanded during Mr Wearing's tenure. Monitoring systems had not matched that growth, Mrs Mullins said.
"We did grow, we grew very fast and, unfortunately, we didn't have those processes and systems to ensure we met those funding rules," she said.
"I don't want to use the word sloppy, but we just got a little bit loose internally."
Mrs Mullins was relieved the TEC investigation was complete and she praised centre staff for "keeping things business as usual" during the investigation.
She was not greatly concerned with the SFO probe.
"With it being such a large sum of public funding, it's expected they would be alerted," she said.
"The SFO, we'll deal with that as it proceeds. Personally, I don't have huge anxiety about that at the moment - apart from the terminology, that's enough to frighten anyone."
Mrs Mullins described the centre as "a legacy entity for the Wairarapa" and said the eight board members believed open dialogue with the public was vital.
The TEC results had been discussed with staff yesterday, and stakeholders and students' parents would also be told.
Mrs Mullins said the centre had conducted separate reviews alongside NZQA and no board members or senior management staff had resigned since the TEC probe began, besides a single staff member who took work elsewhere.
Board member Jan Tatham in April told the Times-Age half-a-dozen staff members had left their jobs at the centre since late December last year, after a three-month review involving a single division at the centre. Two of seven jobs had been axed.
When asked about Dr Wearing's involvement in the improper funding, Mrs Mullins said "that was the question for a lot of local people".
"No one person can be held to account here. This is about Taratahi as a whole.
"We had a system failure, we had some shortcomings that we didn't address, and for me it is about respect for Donovan, his family, his children.
"Everything else is in the hands of the coroner."
