Sydney TAFE has been under investigation for alleged fraud in its use of millions of dollars from a training program for students on 457 visas.
Sydney Morning Herald, by Anna Patty, 22 September 2014
An independent review of the integrity of the 457 visa program has also called for an overhaul of the system to remove risks of corruption by training institutions. It found there is a "high risk that some training providers are seeking to profit from this, particularly as the Department [of Immigration] has confirmed that it does not have the capacity ... to ensure that contributions to these funds are being spent appropriately".
Sydney Institute of TAFE generated $3.3 million last year from migration agents who were paid $380,000 in commissions for recruiting students on 457 visas. This visa allows skilled workers to travel to Australia and work for an approved sponsor for up to four years.
Sydney TAFE followed Bond University's example in offering a 15 per cent commission to migration agents on contributions for the 457 visa training program.
A NSW Department of Education officer alleges money received under the visa program – which is meant to be spent on training for Australians and permanent residents through student scholarships – is being spent for other purposes including the payment of commissions to migration agents.
The department has denied the allegations. A federal government investigation into the claims appears to have slipped into a black hole between regulatory authorities.
The independent review found the Immigration Department has difficulty monitoring compliance with training benchmarks.
Assistant Minister for Immigration Michaelia Cash confirmed her department investigated allegations against Sydney TAFE and referred the case to the Australian Skills Quality Authority for "further consideration". But a spokesman for the authority said the allegations were not within its jurisdiction.
A spokesman for Ms Cash said the department investigated fraud allegations it received "in relation to contributions made by prospective sponsors of subclass 457 workers to a Sydney educational institution's scholarship fund, that were intended to fund training for Australians ".
"The department's investigation found no evidence of breaches under the Migration Act, however the allegations were referred to the Australian Skills Quality Authority, the body responsible for regulating vocational educational training, for further consideration," the spokesman said.
An independent review of the 457 visa program, commissioned by the federal government, has now found the Department of Immigration is not equipped to ensure employer contributions from 457 sponsors are being used appropriately.
It recommends individual institutions no longer be allowed to collect fees from employers. Instead, fees should be collected by government departments and spent on training programs for disadvantaged Australians.
Peter McDonald, a professor from the Australian National University, one of the experts who reviewed the visa training system, said the Department of Immigration's resources to examine alleged corruption were limited.
"We recommended this system be totally overhauled," Professor McDonald said.
Under department guidelines, business sponsors must prove their contribution and commitment to the training of Australians and permanent residents. They do this by contributing to a training fund for the industry in which the 457 visa holder works. The training institution must provide training related to that industry.
NSW Department of Education sources suggest Sydney TAFE has not provided training related to these funds as required and money has been used inappropriately to pay migration agent commissions.
Fairfax Media has seen documents showing Sydney TAFE accepted contributions to a fund for horticulture despite offering no horticulture courses, as required.
The documents show commissions to migration agents being paid from the same cost centre account that receives so-called Benchmark A employee sponsorship contributions for domestic student scholarships.
"This is effectively robbing Australians and permanent residents of training opportunities," a government employee said. The source said more than $700,000 was spent last year on migration agent commissions, temporary staff and marketing and other services.
However, the department denies the allegations, saying migration agent commissions are paid from commercial revenue and floristry courses it offers are linked to horticulture.
"While 457 visa revenue and expenses are mapped to the same cost centre, they are recorded against different ledger codes to enable internal reporting," a department spokesman said. "Commissions are paid from this commercial fund."
The Department of Education spokesman said Sydney TAFE provides floristry courses that "imported three levels of competence from the horticulture training package". However, a department officer said this does not fulfil immigration department requirements.
Sydney TAFE also accepts money into a fund for asset maintenance and cleaning despite prospective students being told TAFE offers no courses in these areas. A department spokesman said TAFE provides "cleaning operations" courses related to the asset maintenance and training package.
The department said it allocated 141 scholarships last year costing $153,625 and 47 in 2012, at $40,870.
NSW Greens MP John Kaye said Sydney TAFE's government-funded expenditure fell from $230.1 million to $226.1 million between 2011 and 2012. He said it is "hardly surprising" that TAFE management would be "tempted to divert funds from the 457 scholarship account".