West Coast Polytechnic Tai Poutini says it made a $1.6 million deficit last year.
The institute said in its 2015 annual report that was partly because it claimed $1m less in government funding after identifying breaches of funding rules with some courses.
The Tertiary Education Commission announced this month it was investigating those breaches.
The annual report said Tai Poutini had more than 8000 students last year, but most were part time, giving the equivalent of more than 2300 full-time students, 300 fewer than in 2014.