The Learning and Skills Council is to work with colleges and training providers to raise awareness across the sector of the risk of fraud. A series of seminars will be arranged across the country highlighting the issues and pointing out the dangers and warning signs for providers to look out for.
Special investigators at the LSC are now handling 33 cases of alleged fraud and financial irregularities and are receiving new complaints at an average rate of four each month.
The Council is currently in the process of recouping £500,000 from providers as a result of earlier investigations and is considering pursuing legal action in some cases. The cases now under investigation involve several million pounds, with the majority focusing on funding overclaims and the falsification of student numbers.
The LSC’s new Special Investigation Unit says that 70% of current cases involve colleges and 30% involve training providers. They warn that cases can begin with simple mistakes but escalate when attempts are made to cover up overclaims.
Geoff Snell, Head of the Special Investigation Unit, said: "We feel it is extremely important that we work closely with providers so that they are aware of the issues, are able to spot potential breaches and act quickly to nip them in the bud. It is in everyone’s interest that we clamp down on fraud and irregularities."
Almost half of all allegations of fraud investigated by the LSC are reported by ‘whistleblowers’ working at colleges or with providers. Thirty eight per cent are reported by third parties and 14% are uncovered directly by local Learning and Skills Councils. Allegations of fraud and irregularities are centrally co-ordinated and monitored by the LSC’s Special Investigations Unit at its national office in Coventry, while work on the ground is carried out by local Councils. By the end of this month, each of the LSC’s 47 offices in England will have at least one individual who will have been trained in investigation.
Geoff Snell added: "These alleged frauds and irregularities do involve significant amounts of money – several million pounds is at risk in the 33 cases we are investigating at the moment, although it is impossible to give any firm figure at this stage. Investigations, conducted properly, can take a long time and we are at a very early stage of investigating many of the cases that have emerged since the creation of the LSC. Where we become aware of apparent criminal offences, we will approach the police for advice and guidance. Where appropriate, we will make formal referrals for the police to investigate. Where this is not appropriate, we can recover money by taking legal action and would expect to terminate contracts where necessary."
Of the cases being handled by the LSC
- 51% involve funding overclaims
- 24% involve falsifying student numbers
- 10% involve breaches of financial regulations
- 15% involve other allegations, including breach of corporate governance