The Auditor General's office has refused to confirm that the West Coast's troubled Tai Poutini Polytechnic is a going concern.
Tai Poutini Polytechnic in Greymouth. Photo: Google Maps
The institute has not yet published its 2016 annual report, but in a letter to Parliament's Education and Workforce Committee, the deputy controller and auditor-general, Greg Schollum, said the polytechnic could not convince auditors of its future viability.
"We have been unable to give an audit opinion for Tai Poutini Polytechnic for 2016. This is because the Council of the Polytechnic cannot yet provide us with adequate audit evidence to explain why it considers the "going concern assumption" is appropriate as a basis for its 2016 financial statements," the letter said.
It said the polytechnic needed to formally assess whether it was a going concern, and that would depend on a government decision on a proposed business case, which was currently with the Education Minister, Chris Hipkins.
Tai Poutini made a deficit in 2015 and earlier this year received a $3.6 million bailout from the government because it could not pay its bills.
News of the audit opinion came just a day after the Qualifications Authority revealed that it had given Tai Poutini its lowest possible quality rating, category four, the worst result ever recorded by a Crown-owned institute.
Fraud risk at public tertiary institutions
The Auditor General's Office has warned tertiary institutions to guard against a growing incidence of fraud.
The office said tertiary institutions should collect students' fees electronically rather than in cash in order to reduce the possibility of theft.
"Paying fees and other course-related costs in cash often represents a significant sum and presents an attractive target for theft by an employee," it said.
The office said there had been a steady number of procurement-related thefts, mainly using false invoices, and in some instances tertiary institutions had been sucked in.
"We found a few incidents where fraudsters sent public entities legitimate-looking emails or documents, claiming to be from an established supplier, telling them of a change in bank account details. In a couple of instances, the TEI made the account change without first confirming it by phoning or separately contacting the supplier, and then paid the fraudster."
The office said the risk of fraud could increase if institutes were involved in significant building and construction projects.
It said its audits of tertiary institutions showed rising operating costs and changes in income could affect their viability.
The office said it had completed audits for 26 public tertiary institutes and 16 had financial results that exceed either their target result or their 2015 result.