One of New Zealand's biggest polytechnics is under investigation over alleged rule breaches - including claims that tutors completed students' assignments for them.

Manukau Institute of Technology's commercial training division, EnterpriseMIT, has been the subject of a 14-month investigation by Deloitte, auditors for the Tertiary Education Commission.

The polytechnic shut down EnterpriseMIT at the end of last year, following a highly critical draft report by the auditors.

The company's then-chief executive Tim Wilson told staff the report had identified issues that were "sufficiently concerning that funding for 2017 for EnterpriseMIT has not been approved".

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EnterpriseMIT staff briefing, November 2016

The Herald understands Deloitte investigated three courses; KeyStep, a programme designed to make unemployed 16 to 19-year-olds ready for work, a finfish aquaculture course aimed at pet shop workers and a skippers' course designed for the commercial fishing industry.

During the investigation, auditors were alerted by a former staff member to a complaint from two KeyStep students, who reported seeing a tutor filling in student assessments about September 2015, using different handwriting to make it look as if the students had done the work.

One of the students, Hana Faleatua, now aged 20, has told the Herald that she and her boyfriend, Bryant Parata, were sitting by the tutor as she wrote the answers.

Former EnterpriseMIT student Hana Faleatua saw a tutor writing answers in students' booklets on her KeyStep employment skills course. Photo / NZ Herald Focus video grab
Former EnterpriseMIT student Hana Faleatua saw a tutor writing answers in students' booklets on her KeyStep employment skills course. Photo / NZ Herald Focus video grab

The tutor asked her if she thought the handwriting looked different, before handing the booklets to a more senior tutor, who approved of her actions.

Faleatua said she knew student numbers had been falling and that staff were ringing up and offering to pick up students who had stopped attending classes.

"But I didn't realise they'd go to that extent. It's just not right. There are ways to go about things and that's not one of them."

Parata, aged 19, said he also remembered the tutor filling in the booklets and asking him and Faleatua if the handwriting looked the same or not.

The Herald understands that about the time of the alleged incident EnterpriseMIT had gained taxpayer funding for about 140 students but had fewer than 50 turning up to classes.

Former staff said the unemployed teens were seen as financially valuable because they were funded on a high Youth Guarantee rate of about $5500 per student for the 19-week course.

Other staff claimed it was common for tutors to visit students in their homes close to deadline and effectively write their answers for them.

Former tutor Edwina Kapa said she forwarded a letter to Wilson from a student complaining about a tutor who visited her at home.

The student wrote; "She pulled out seven assessments for me to complete. She made me sign them all first and then we got down to the questions, she read the questions out to me and before I could speak she would already be writing her own ideas down while asking me if I agree."

Kapa also formally complained about recruiters offering students $50 for every friend or family member they signed up for the course.

She reported a recruiter offering cigarettes to 15-year-old students and taking the class on a trip to Rainbow's End, which one student's mother described as "buying compliance".

Wilson replied in a letter to Kapa that a senior staff member had approved the home-based assessments.

Recruiters had denied offering money or cigarettes to students and the Rainbow's End trip was reasonable, as the organiser was trying to make up for the lack of off-site activities during the programme.

Letter from former EnterpriseMIT chief executive Tim Wilson to tutor Edwina Kapa

Parts of the letter dealing with personal concerns have been redacted

Another former tutor, Alf Pukepuke, who taught a security course and worked alongside KeyStep staff, agreed with Kapa's criticisms.

"They were just grabbing anyone. There was one girl and she was still in a CYF (Child Youth and Family) facility at the time. She was in there for a reason."

Pukepuke, who now works in business with Kapa, said recruiters were paid $250 for every student. He said about 90 per cent of the students on one KeyStep course were in trouble with the law, which made it almost impossible for tutors to keep control them.

"But they were still actively recruited... and it came down to the bucks.

"They had targets to meet, like everyone else, and they really didn't care who they dragged into the classroom. It wasn't their problem."

A former MIT staff member told the Herald that the auditors also investigated two other courses - the Certificate in Finfish Culture and New Zealand Certificate in Domestic Maritime Operations (Restricted Limits).

The former staff member said about 60 students completed the year-long finfish course in about four months in late 2015 because they were given credit for prior learning and many crew finished the 24-week skipper's course in 12 to 14 weeks as they knew the answers from their practical experience.

"It could have been a lot more rigorous. It wasn't outright fraud or anything like that - it was just a push to get things done."

MIT said it could not make any specific comment on the allegations as the investigation was still under way.

A spokesman said MIT had provided a full and detailed response to all questions raised by the commission over three programmes at EnterpriseMIT between 2013 and 2015.

The polytechnic also intended to respond to the allegations made by Faleatua and Parata.

"Unfortunately, there have been a number of staff changes since the alleged incident almost two years ago."

The spokesman said EnterpriseMIT was shut down "for a range of reasons, such as to reduce administrative duplication and to better meet the needs of students".

In response to Pukepuke's claim that recruiters were "just grabbing anyone", he said the KeyStep course was deliberately open entry as it was aimed at getting unemployed young people back into education and jobs.

MIT figures show course completion rates for KeyStep students were 53 per cent in 2014, 52 per cent in 2015 and 50 per cent in 2016.

The Tertiary Education Commission also said it could not comment until the investigation was complete, probably later this year.

Labour education spokesman Chris Hipkins said the allegations were very disturbing, especially following the Herald's revelation in May that Unitec students were allowed to pass despite cheating in their final exam and a Tertiary Education Union survey in March in which staff raised similar concerns.

"It's incredibly worrying and it fits with a pattern that we've seen of cheating and pressure on staff to pass students."

The audit is the latest in a series of investigations into tertiary education institutions. In the last three years seven training providers for mainly local students have been ordered to pay back more than $28 million of taxpayer funding for failing to deliver courses properly.