A report released by Victoria’s Auditor-General’s Office has identified the Bendigo Kangan Institute failed to notify the VAGO about alleged corrupt conduct at the institute in its 2016 management representation letter.
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Evidence provided to the Independent Broad-based Anti-corruption Commission indicated the institute’s management may have been aware of the alleged corrupt conduct of a former employee.
As TAFEs are public entities they are required to notify the Auditor-General if there are any possibilities of fraud, regardless of if they are actual or suspected cases.
In 2015 IBAC launched Operation Lansdowne, an investigation into alleged corrupt conduct at Bendigo Kangan Institute and South West TAFE Institute.
The operation concentrated on training agreements the TAFEs had initiated with a third-party.
Operation Lansdowne alleged a third-party would send training and assessment records to the institute which they would then claim government subsidies for the training. The third-party would receive 70 per cent of the funds; Kangan would retain 30 per cent.
However, no one from Bendigo Kangan Institute supervised the training, the report said it was a scam devised by the third-party.
The VAGO investigation concluded the Bendigo Kangan Institute took no action on enquiries and complaints from individuals who were issued with statements of attainment relating to studies they had not commenced.
It also indicated that no checks were undertaken to ensure the training was being delivered by the third party.
IBAC concluded the Bendigo Kangan Institute retained in excess of $400,000 in government funding for training that was never given.
Bendigo TAFE CEO Trevor Schwenke said the institute focused on implementing tougher processes for third-party agreements in the future.
“As part of our ongoing business response to combat cases of fraud Bendigo Kangan Institute is working to implement strengthened systems, processes and controls to provide necessary oversight for all third-party agreements,” Mr Schwenke said.
“Continuous improvement is a priority for BKI and through our own internal audits we identify improvement opportunities for our Institute.
“We are implementing an Institute-wide improved structure that focuses on in-built quality within everyday academic governance.”
The Department of Education and Training is planning to recoup these funds and both TAFEs are required to submit a report to IBAC by December 31 2018 to show how they have strengthened controls.