The Independent Broad-based Anti-corruption Commission (IBAC) opened what is expected to be a month of public hearings this week in Melbourne.

Current chief executive Mark Fidge, predecessor Peter Heilbuth, and former senior executive Maurice Molan, who oversaw the arrangement, have been among 12 people to give evidence so far.

The IBAC investigation is considering whether persons associated with South West Tafe engaged in "allegations of serious corrupt conduct".

It is alleged South West TAFE entered a $1.8 million contract with training company Taytell, which pushed through fraudulent student enrolments in order to receive government subsidies. Taytell was to provide 172,000 student contact hours, but it is alleged minimal hours were provided and TAFE received about $500,000 in subsidies under an 80-20 deal. 

More than 130 students with engineering firm Zinfra in Clayton were to be trained and assessed by Taytell director Rebecca Taylor, hundreds of kilometres from TAFE's Warrnambool campus.

Ms Taylor denies any wrongdoing and claimed not to know why she was a key figure in the investigation.

IBAC may bring criminal proceedings or refer matters to the Office of Public Prosecutions after its investigation ends.

Opening address: “In 2013, SW TAFE entered into a contract with a company called TayTell Pty Ltd. Under the contract, TayTell was to be a ‘third party’ training provider for SW TAFE. The contract contemplated that TayTell would arrange for a cohort of people, described in the contract as TayTell ‘employees’, to be enrolled in courses at SW TAFE. TayTell would then be responsible for conducting their training and assessment, using its own teaching resources and materials, its own training and assessment personnel, and its own training venues. SW TAFE’s role in relation to these enrolments appears to have been limited, largely, to the accreditation of the students, on completion of their training and assessment, with a formal qualification from SW TAFE.

“Under the contract, SW TAFE was to pay TayTell a fee equal to 80 per cent of the government subsidies that SW TAFE was to receive from the Department of Education for the TayTell student enrolments. SW TAFE would keep the remaining 20 per cent. In late 2013 SW TAFE received enrolment, participation and assessment data from TayTell for some 134 students that TayTell claimed to have enrolled, trained and assessed for a Certificate IV in Engineering qualification.

“SW TAFE then submitted that data to the Department of Education, via its electronic system, to claim government funding for the TayTell enrolments. Between late 2013 and mid-2014, SW TAFE received $2,280,168 by way of government subsidy for those TayTell enrolments. It kept 20 per cent for itself ($456,033.60). The other 80 per cent of that public funding – some $1,824,134.40 – was onpaid to TayTell.

“In October 2013, Rebecca Taylor was, herself, awarded a Certificate IV in Engineering qualification from SW TAFE. That qualification is a minimum pre-requisite for a person to be permitted to then train and assess others in the Certificate IV in Engineering.

“IBAC’s investigations to date raise serious concerns as to how Rebecca Taylor came to obtain that qualification from SW TAFE, and the involvement in that process of Mr Maurice Molan, then an executive manager at SW TAFE.

“IBAC’s investigations also suggest that Mr Molan was integrally involved in the establishment of the contract between SW TAFE and TayTell. The circumstances of the negotiation, execution and management of the agreement between SW TAFE and TayTell, including the knowledge and involvement of Mr Molan and other senior executives of SW TAFE, is a matter to be explored in these public examinations.”

Questioning former South West TAFE chief executive Peter Heilbuth on the lack of oversight of TayTell: Mr Hill: “The evidence that we have from a large number of sources is that there was no quality assurance, there was no oversight of the process by South West TAFE at all, and that all South West TAFE did through Mr Molan and some under him was to input some student data into the student management system at the TAFE with the end object being that a certification in engineering IV would proceed. Is that your understanding of what actually occurred in this case?

Mr Heilbuth: I believe that is my understanding now. Absolutely.”

“There was so much going on that it was very difficult to manage the organisation. We had significant staff cuts; about a-third of our staff had gone leaving significant holes in our organisation; we had to close a beloved campus in the region and significant community backlash about that; we were struggling with our student management system which didn’t work for six to 12 months; and we were also being hit with very detailed audits that were specifically around what I would consider administration issues. A date didn’t quite match another date, therefore that was potentially a non-compliance. And the risk thereof of having to potentially give back all moneys that the government had given us for training because of those non-compliances … We were also fending off or trying to work through pressure to amalgamate and merge with other TAFEs on the basis of our – what was explained to us by government as we were unviable.”

In an email to Mark Fidge, produced as evidence at the inquiry: “First rule of stepping in dog shit is not run around in panic spreading it into the carpet. Let’s take the time needed to get to the bottom of the evidence so we can make an informed decision. A meeting is definitely warranted.”

On the unusual 80/20 contract money split: Mr Fidge: “We always had, I will call it, an unwritten rule in regards to a 70/30 split from previous work that we had done with the likes of, say, Metro.

Mr Hill: Effectively, were you overruled by Mr Heilbuth and Mr Molan?

Mr Fidge: Yes.”

On third party contracts: Mr Fidge: “We stopped all third party contracts in the start 1of 2015.

Mr Hill: And the reason for that?

Mr Fidge: Because of what we found in regards to this particular contract.”

On Rebecca Taylor’s Certificate IV in engineering qualification: Mr Hill: “And you can’t tell us who it was that authorised you to, in effect, so qualify her?

Mr Molan: Sir, I wish I could remember.

Mr Hill: Right.

Mr Molan: I wish I could remember, but I believe in my own heart I would never have done that given my responsibility to the institute, given my role at the institute, and given the level of service and dedication  I gave that institute. I don’t believe I would’ve done that. Not unless the information had been supplied to me, and I believe that information was supplied to me. I took that information to the auditors, because I believe that box of documents showed that Rebecca Taylor had been marked competent - - -

Mr Hill: You don’t know what was in the box of documents, do you?

Mr Molan: I believe that that box of documents included a – a – a tick sheet which had ticked the (indistinct) of competency, but Rebecca Taylor had been deemed competent. However, that box – that box of documents was lost.”

In a text message to Mr Heilbuth: “I know this looks really bad. I’ll come back to you. There’s an explanation for all of this, and I’ll come back to you.” 

On Rebecca Taylor’s certificate: “I – I will concede that my username was used to put the results onto the system for Rebecca Taylor, and given that it was my username, I accept that I must have done it. However, I didn’t have to hack into or break into the computer system to do that. This was not something that was unique to this situation, sir. Third party agreements often meant that a person without the qualifications put the results on once they were satisfied that the person was competent.”

On the TayTell contract: Mr Hill: “Right. But you’ve told us you didn’t read the document.

Mr Molan: I know, and I don’t recall reading it, sir.”