Students take the PCs and run

By TONY WALL

A private Taranaki education centre that offers computers as an incentive to enrol in its travel courses is at the centre of a $35 million fraud investigation after allegations that hundreds of people took the computers and ran.

The taxpayer-funded Practical Education Training Centre in New Plymouth - a "second-chance educator" that targets education system dropouts - has had its money frozen while three Government agencies investigate its activities and a suspected student loan rort.

The Serious Fraud and Crown Law Offices are also being consulted.

"Nearly $10 million of tuition subsidies and more than $25 million of student loans may be involved," said Associate Education Minister Steve Maharey.

The centre's general manager, Shona Glentworth, told the Weekend Herald that some students had defrauded the system and the centre had taken steps to stop it happening again. She said the centre itself was not involved in the fraud.

She disputed the size of the scam, saying she knew of only six cases where the Compaq computers, worth about $2300, had been sold to second-hand stores.

But Mr Maharey said it appeared that as many as half of the 4000 students who enrolled in the centre's National Certificate in Travel correspondence courses had used student loans to pay the $5600 course fee, but did not submit any work.

Mr Maharey said he had earlier directed the Ministry of Education, the Qualifications Authority and the Ministry of Social Development to investigate the quality of the courses, a "spectacular growth" in enrolments midway through the year and the inclusion of the computer in the tuition fee.

The student services section of the Ministry of Social Development was investigating the "magnitude and timing of possible misuse of the student loan scheme by students", and the Ministry of Education was looking at the actions of the centre.

Mr Maharey said reviews and audits of the travel courses had been happening since August, when concerns were first raised about the poor results of travel course participants last year.



Mr Maharey said that in more than 700 cases, more than one member of a household was enrolling in the course and multiple computers were being sent to the same house, although access to a computer was required for only one of the 14 unit standards.

"In one case, five members of a household had enrolled, meaning that there were five computers in that household.

"More than 150 students, most of whom had achieved no unit standards, had 'gone - no address'," Mr Maharey said.

The Government hoped to know by the end of the month the number of students requiring investigation and was consulting the Serious Fraud and Crown Law Offices on possible action, he said.

"It needs to be remembered that student loans are just that, and individuals have debts established against their names, so any money identified as having been obtained fraudulently will be recoverable."

Mr Maharey said the case demonstrated a number of loopholes that had been addressed as part of a new financing policy for next year aimed at improving use of public money for tertiary education, improving retention and completion rates for students and better monitoring systems for tertiary providers.

Shona Glentworth said that when the centre became aware around June that some computers had been sold to second-hand stores, the criteria for receiving the computers were tightened.

Students now had to complete a quarter of the travel module before receiving the computers.

She said computers were given to students for practical reasons as well as an incentive.

A lot of course material was held on CD-Rom and e-mail was a good way of communicating.

She agreed that 4000 enrolments was a "phenomenal amount", but believed only a small number of students had "fallen by the wayside".

Shona Glentworth said staff tried to keep in touch with all students, but many of those who had not engaged in any study could not be reached by phone.

She said that, in hindsight, offering the computers as part of the tuition fee had opened the centre up to fraud.

"Some people will always abuse something that's offered in good faith."

She said the centre, one of the biggest training providers in the country, was still accredited and she was confident the investigation would show staff had not done anything untoward.

The computer and hospitality courses would continue as usual.

* tony_wall@nzherald.co.nz