'Sloppy' handling of language schools prompts inquiry call

Allegations that the Qualifications Authority has badly mishandled the language schools industry must be investigated, says National Party MP Pansy Wong.

People making submissions on the Education (Export Education Levy) Amendment Bill alleged the authority was sloppy in its accreditation of providers, lax in its audits and slow to act when trouble loomed.

Its inaction over the collapse last year of the Modern Age Institute of Learning, then the country's largest English language school, inflicted added costs on the taxpayer, MPs were told.

Ms Wong said allegations made to the committee "need to be taken seriously, and the select committee has to pursue them".

"The incompetence of Government agencies sees people punished two ways. One is financial - they have to pay a levy - the other is damage to our reputation.

"I feel very strongly because Asians get it all the time.

"All the Asian students and the Asian community are seen by the public to be causing all this mayhem, and I get very annoyed because the Government will not do the right thing."


The chairwoman of Combined Registered English Language Schools (Crels), Maureen Hayes, told MPs that the Qualifications Authority knew Modern Age was headed for collapse but failed to act decisively.

"What NZQA aren't willing to do is step into a situation and say 'This is an untenable situation - we have to close this school down', or 'We have to put an outside accountant in place to write the cheques', or something like that to stop a school from self-destructing," she said.

"They knew that school was non-compliant in a lot of different areas.

"The failure of NZQA to obtain basic compliance with key principles contributed significantly to the Modern Age failure."

Taxpayers spent $620,000 bailing out 220 Modern Age students after it went under.

Modern Age, a Crels member, catered for about 600 students.

Ms Hayes said the Qualifications Authority had approved the Crels tuition assurance scheme about a week before Modern Age closed its doors.

The authority should have known through its audits that Modern Age had violated an Education Act obligation to put money into trust accounts to cover students' non-tuition funds, she said.

"They could have given us a little bit of warning that things were as dire as they were. We wound up looking like the bad guys."

Nor was the Serious Fraud Office prepared to investigate the non-compliance, she said.

"I guess I'm a bit baffled by it.

"To me it seems very clear that a rule was broken. I can't understand why that isn't quite black and white."

The authority had a supporter in former Labour Party Cabinet minister David Caygill, who made submissions as Education New Zealand Trust chairman.

He said the authority deserved praise for its efforts in a difficult sector.

"We'd prefer to see it better resourced so it could do more enforcement, but it works well with the resources it has."

Robbie Pickford, operations manager at the Kiwi English Academy, called on the industry and Government agencies to sort out the industry's problems, "rather than keep putting sticking plasters over them".

The Government last month backed off plans to increase a levy on the sector to reimburse international students caught by the collapse of a provider.

Submitters for the sector remained opposed to the levy, saying it simply punished good providers who had insurance against their collapse.

Mr Caygill said the bill was designed to protect the Government, not vulnerable students.

School collapse

* The Auckland-based, multi-campus Modern Age Institute of Learning went into voluntary liquidation last September after running up debts of more than $4.4 million.

* The Government spent $620,000 bailing out 220 Modern Age students - an average of about $2820 each.

* About 600 Modern Age students were placed with alternative providers.

- NZPA