A Taranaki tertiary institute at the centre of a six-month investigation of its Maori programmes is being forced to pay back $3.7 million in government funding, and about 400 students have had their qualifications withdrawn.
An independent report found the Western Institute of Technology at Taranaki (WITT) had not met delivery or funding standards for its level 4 and level 6 Maori Performing Arts courses between 2009 and 2013.
The combined Tertiary Education Commission (TEC) and New Zealand Qualifications Authority (NZQA) investigation found that enrolment and assessment process had not been followed at the polytech, and there was evidence that students were self-teaching and had little or no contact with tutors.
Other examples of irregularities included tutors being enrolled in courses they were teaching, students being taught by immediate family members and enrolment forms being signed up to three months after teaching had commenced.
As result all the level six Diploma in Maori Performing Arts qualifications earned at the institute between 2009 and 2013 have been rescinded, affecting about 350 students, and another 56 level 4 Certificate in Maori Performing Arts students have had their qualifications withdrawn.
TEC chief executive officer Tim Fowler said the polytech had not lived up to its expectations.
"As a tertiary education provider WITT has a responsibility to deliver to its learners what is has agreed with TEC and NZQA, and what it has been funded to deliver.
"WITT has failed to do this in this instance and the TEC is taking action by recovering the overfunding and working with WITT to make sure this doesn't happen again."
The investigation was initially sparked when WITT received a complaint in May 2013 that a student had graduated from the the level 4 certificate without completing the course work.
Since the scandal broke about 10 WITT staff have resigned or left the institute for personal reasons including head of Maori Tengaruru Wineera and Dr Jan-Lockett-Kay, who was acting chief executive early in 2013 and head of the Humanities Faculty, which included Maori studies.
Chief executive of the New Plymouth based polytech, Barbara George, said the problems predated her arrival at WITT about a year ago and she first heard them when the complaint was laid in May.
"We responded as soon as we became aware that we had an issue and we acted quickly to put it right and make sure it doesn't happen again," she said.
Ms George said she was gutted by the findings and committed to "learning from this regrettable matter".
She said individual staff members had acted outside of WITT's policy framework and procedures that would have identified the problem a lot sooner were not followed up vigorously enough.
Ms George said students who have had their qualifications cancelled could ask for a refund of their fees or apply to re-sit the course at WITT for free. She was unable to say how much it would cost the polytech to retrain all the affected students.
Witt chairwoman Mary Bourke said although the repaying the $3.7 million, which was paid out of existing reserves, would mean short term pain it would not put the long-term future of the institute at risk or force it into an amalgamation.
Ms Bourke said the institute's board still had confidence in Ms George.
"Barbara started with us in October last year and has spent more than half her time with us dealing with this particular issue. She's doing an excellent job in very difficult circumstances that were not of her making and we are confident she will see us through this."
Ms Bourke also said she had not intention of resigning her position over the debacle.
The women said the possibility of legal action over the scandal remained on the table.