Vic TAFEs linked to $2m 'sausage' scam

Two Victorian TAFEs forked out $2 million of taxpayer money for non-existent classes as part of a scam which was described in an anti-corruption report as a "sausage factory".

The Independent Broad-based Anti-corruption Commission (IBAC) says the South West Institute of TAFE and Bendigo Kangan Institute of TAFE paid government funding to training company TayTell, owned by Rebecca Taylor.

But the training was never delivered, IBAC found.

"Ms Taylor and members of her family and friends facilitated this conduct by falsifying enrolment forms and assessment workbooks in a process Ms Taylor described at the time as a 'sausage factory'," IBAC said following the release of its report on Friday.

The two TAFEs failed to conduct any meaningful oversight of the training supposed to be delivered on their behalf, the watchdog also found.

Former South West Institute of TAFE executive manager Maurice Molan misused his position to award or interfere with the granting of two certificate IVs to Ms Taylor when she wasn't qualified.

"While it does not appear that Mr Molan received any direct financial gain, his actions appear self-serving," IBAC's report read.

"At a time of budget and staff cuts, he had brokered an agreement that delivered much-needed funding to South West TAFE.

"It was not in his interests for the agreement to fail if it was revealed the sole trainer, Ms Taylor, did not have the required qualifications to deliver the training."

The corruption investigation also stretched to cover Ms Taylor's links to regional rail operator V/Line.

V/Line was found to have conflicts of interests in its procurement and recruitment practices between 2013 and 2016.

This included contracts given to people including Ms Taylor by her associate Alan Clifford, then general manager of rolling stock at V/Line.

Ms Taylor was paid $6600 for training V/Line employees and TayTell was later given $130,000 for Ms Taylor's consultancy work for V/Line.

IBAC has made multiple recommendations for government reviews of public sector recruitment policies and TAFE training delivered by third-party arrangements.

The watchdog will also consider whether it is appropriate to refer parties involved for criminal investigation.

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