Vic TAFE boss fronts corruption hearing

A family-run third party training provider for a Victorian TAFE institute allegedly generated bogus engineering qualifications to collect $1.8 million in government subsidies, a corruption inquiry has been told.

South West TAFE chief executive Mark Fidge told the state's Independent Broad-based Anti-corruption Commission on Wednesday he sought legal advice to recover the money but "it went nowhere".

Mr Fidge said an audit was undertaken after a South West trainer identified irregularities in student enrolment forms for an engineering firm, Zinfra, which had been submitted by third-party trainer TayTell.

The institute then contacted the Department of Education and Training, police and the Ombudsman.

Mr Fidge said he was not aware of anyone representing South West TAFE having ever attended Zinfra's premises at Clayton to observe the third-party training.

He also said at the time of the allegedly fraudulent enrolments in 2013, the TAFE hadn't yet fully implemented standard policies and procedures on dealing with third-party contracts.

On Tuesday, the hearing was shown messages between TayTell director Rebecca Taylor and her daughter Heather, who she employed as an office manager.

The pair frequently discussed "sausages", the "sausage machine" and getting "the sausages cooked".

Counsel assisting Ian Hill QC suggested to Taylor the "sausage" references were code for the paperwork that needed to be completed to cash in on the $14,000 each pupil was worth.

Taylor denied that, saying mostly "sausages" referred to barbecues they held at graduation ceremonies.

However on Wednesday, Mr Fidge laid any doubts to rest.

"No, much better food," he answered when Mr Hill asked him if sausages were on the menu.

It is alleged the Zinfra employees only received three to four hours training, not the 1400 hours required to attain a Certificate IV in engineering and that TayTell was not qualified to oversee assessments.

Former South West mechanical engineering teaching contractor Jason Sealey told the hearing he was concerned Taylor was not qualified to issue a Certificate IV in engineering from the TAFE but was permitted to do so anyway.

South West audit and compliance officer Shannyn Carter told the hearing former executive Maurice Moran had signed off on the matter.

She also said Mr Moran had exerted pressure on staff to pass students who were members of Taylor's family.

"When the executive is telling you to do something, sometimes you don't question it," she said.

Ms Carter said she found a number of anomalies in the Zinfra student files.

She said she didn't believe the Zinfra students knew they were being enrolled in a Certificate IV in engineering.

The IBAC hearing, which is expected to run for a month, will also examine a contract TayTell had with Bendigo Kangan Institute and the recruitment of certain V/Line officers and contractors.