Media Releases

IBAC investigation exposes $2 million TAFE training scam and issues at V/Line

Saturday 09 Dec 2017

Victoria's anti-corruption Commission, IBAC, has unravelled a multimillion dollar training scam that exploited oversight weaknesses at two Victorian TAFEs: South West Institute of TAFE and Bendigo Kangan Institute of TAFE.

A special report tabled before Parliament this morning details the findings and recommendations of a major IBAC investigation, Operation Lansdowne, into allegations of serious corrupt conduct relating to South West Institute of TAFE and Bendigo Kangan Institute of TAFE, and third-party agreements those TAFEs had entered into with TayTell Pty Ltd.

IBAC found that TayTell owner and director, Ms Rebecca Taylor, operated a scam through which she received more than $2 million of government funding under subcontracting arrangements with the two TAFEs, for training that did not take place. Ms Taylor and members of her family and friends, facilitated this conduct by falsifying enrolment forms and assessment workbooks in a process Ms Taylor described at the time as a 'sausage factory'.

IBAC identified weaknesses in the systems and controls of South West Institute of TAFE and Bendigo Kangan Institute of TAFE which allowed the scam to flourish. The key weakness was a failure by both TAFEs to conduct any meaningful oversight of the training which was meant to be delivered on their behalf.

IBAC also found a former Executive Manager at South West Institute of TAFE misused his position to award, or interfere in the awarding of, a Certificate IV in Training and Assessment and a Certificate IV in Engineering to Ms Taylor when she was not qualified.

"The Victorian community would be right to be extremely concerned with the misappropriation of these funds. In recent years, there has been considerable attention on the challenges confronting the vocational education and training sector, including concerns around TAFEs' financial sustainability and the vulnerability of the sector to unscrupulous providers," IBAC Commissioner Stephen O'Bryan said.

"Funding for the sector is limited and should be directed towards ensuring people – including disadvantaged people in regional areas – obtain high quality, skills-based training that properly equips them for work," Mr O'Bryan said.

"The community also expects that people who obtain qualifications in technical areas such as engineering, are in fact, so qualified."

IBAC’s investigation expanded to include the circumstances surrounding the recruitment of particular employees and the engagement of certain contractors (including Ms Taylor) by V/Line.

The investigation identified that between 2013 and 2016 there was a clique of senior V/Line officers who placed undue emphasis on who people knew and personal friendships, wilfully disregarding the required public sector merit-based procurement and recruitment standards.

"V/Line provides critical public transport services to Victoria’s regional and rural communities and Victorians rightly expect that the trains and services under V/Line's control are properly maintained and delivered to the highest standards by people who are appropriately skilled and qualified. A failure to do so unacceptably risks public safety," Mr O'Bryan said.

IBAC identified an environment at V/Line where clear conflicts of interest were not declared or managed, allowing a culture of cronyism to flourish. Red flags – including blatant contract splitting, a lack of documentation to justify procurement (such as business cases), insufficient segregation of duties, and inadequate contract documentation – were not acted upon.

IBAC recommended the responsible agencies address the identified vulnerabilities. Recommendations include:
•    The Department of Education and Training, DET, to review TAFE training delivered via other third-party agreements, to verify the legitimacy of that training.
•    The Secretary of the Department of Premier and Cabinet, in conjunction with the Victorian Public Sector Commissioner, to review ways in which probity in public sector recruitment can be strengthened.

South West Institute of TAFE, Bendigo Kangan Institute of TAFE, V/Line, and DET are required to report on the implementation of these and other recommendations to IBAC by 31 December 2018.

IBAC will also consider whether it is appropriate to compile briefs of evidence for the consideration of the Office of Public Prosecutions.

Useful links