Plumbing and gasfitting apprentices were given qualifications for training they apparently never did, an investigation has found.
The Weekend Herald understands the Plumbing, Gasfitting, Drainlaying and Roofing Industry Training Organisation awarded its trainees hundreds of unit standards which cannot be accounted for.
The claim is made in a Qualifications Authority draft report, which also says the ITO also did not provide assessment schedules, which could have proved the results were based on legitimate work.
The ITO rejected the draft findings as "probably 60 per cent wrong" and said it would provide more evidence to clear its name.
It is understood that NZQA found no evidence that the organisation - which receives millions of dollars from taxpayers for training each year - knowingly reported false results.
But the final report is expected to recommend tighter controls on the material taught to apprentices and checks to make sure the problem is not widespread.
The investigation stems from a complaint in April by former Unitec plumbing and gasfitting head Garry Cruickshank, who said the ITO had illegally passed 24 apprentices, based on substandard and largely irrelevant course work which it had supplied to the Manukau Institute of Technology.
Mr Cruickshank, who was employed at MIT at the time, said he repeatedly warned the ITO that the course was inadequate and unsafe, but his concerns were ignored.
He described the ITO's decision to award qualifications to the students who had never passed the unit standards required as "a serious concern to public health and safety".
The training organisation's chief executive, Ian Elliott, said the report's findings were based on a misunderstanding about how the course worked.
He said the ITO could not supply the assessment materials demanded by NZQA because it did not have any.
"Some of the stuff in there is probably right, probably 60 per cent of it's wrong.
Mr Cruickshank disagreed, saying the report got most things right, although he believed it should have more thoroughly investigated his claim that the ITO had deliberately misreported results to increase pass rates.
He said he would give the Qualifications Authority more evidence showing the practice was systemic and had been so for at least 13 years.
He described the hundreds of wrongly reported results as "just the tip of the iceberg".
The report is the latest in a series of embarrassments for industry training organisations, which are now the subject of a review ordered by Tertiary Education Minister Steven Joyce.
Last month 18 ITOs, including plumbing, had to pay back $4.3 million which they received in 2009 for people they had wrongly listed as trainees - including 11 people who turned out to be dead.
Mr Joyce told a select committee in June that part of the problem was "phantom trainees", who were signed up but not training.
In 2008 and 2009, he said, 44,400 people enrolled in training did not achieve any credits.
More than half the people listed as training in those years achieved no credits, costing taxpayers $58 million in 2009.