The File Said So

Transcript of the published episode, checked against the episode script. Figures are written as numbers. Spot an error? Email auditthismedia@gmail.com.

00:00 Eleven roofs with no panels on them

If you had solar panels put on your roof a few years ago, you did not pay what they cost.

You paid a discounted price, and the discount came from a certificate. Back in 2020, when a rooftop system was installed, the owner became entitled to create a set of small-scale technology certificates, based on how much power that system was expected to generate over its life. Most people never saw them. The entitlement was signed over to the installer or to an agent, and came off the invoice as a discount.

The agent then sold those certificates on, because electricity retailers were required by law to buy and surrender them, in proportion to the power they sold.

Which meant the discount on that roof was paid for, in very small pieces, on everybody else’s power bill.

One system, one address, one set of certificates. That was the machine.

And the number of certificates was not counted. It was calculated, from the size of the system and where in the country it was. Nobody weighed anything. Nobody metered anything. The figures went in, and an entitlement came out.

Here is the structural detail the whole thing rested on. The certificates were not created by an inspector who visited the roof. They were created from the paperwork that said the roof was done.

In October 2020, an accredited solar installer in Victoria named Gavin Brady, the director of a company called Shine Tech Solar, began filing that paperwork.

11 sets of forms, over six months. Assignment forms, transferring the right to create certificates. And with each one, a certificate of electrical safety. The document an electrician signs to say an installation has been done properly and is safe to energise.

The forms went to a renewable energy certificate agent, who did what the system was built to do. Read the paperwork. Accept it. Act on it.

The agent created 1,390 certificates. Then the agent paid Brady $50,000 for the right to create them.

And on paper there was nothing to query. An accredited installer, and accreditation is a thing anybody can check. A company. 11 addresses. A safety certificate with each one, signed.

02:08 Eleven envelopes

Every document the process asks for, present.

There were no solar systems. Not one of the 11 had been installed. The roofs were bare. The safety certificates certified the safety of installations that did not exist.

And look at the economy of it, professionally speaking. No panels to buy. No inverter. No racking, no crew, no scaffold, no traffic management, no trip to site. 11 envelopes.

The Clean Energy Regulator investigated. On 1 February 2023, at the Moorabbin Justice Centre, Gavin Brady, the director of Shine Tech Solar, pleaded guilty to five dishonesty offences under the Commonwealth Criminal Code.

The magistrate said the sentence had to strongly emphasise general deterrence, and took into account the early plea, the record of interview, and the fact that Brady had made full admissions.

Brady was convicted, placed on a community correction order for two years, and ordered to complete 300 hours of unpaid community work.

He was ordered to pay $48,528 in reparation. At the time, his accreditation as a solar installer was suspended.

So the scheme does have a regulator, and the regulator does have investigators, and they did find him.

Afterwards. 11 roofs. $50,000. 1,390 certificates, bought and surrendered by people who will never know they paid for them.

Two years and 300 hours, for a job that was 11 envelopes.

Nobody climbed a ladder. Nobody drove to an address. Nobody stood in a front yard and looked up.

The file said so.

03:47 Two colleges, and a state that paid by the hour

The paperwork trick is not rare, and it is not clever. It works in any system where money is released by a document rather than by a person who has seen the thing the document describes.

It works better the further the money has to travel. A roof is one address and $50,000. Now put it inside a program with a budget of more than a billion a year, that pays by the hour.

Which brings us to two schools in Melbourne, one in Reservoir and one in Footscray, and to a state government that in the same period had budgeted around $1.2 billion a year for training, and paid it out one reported hour at a time.

Two private colleges report lessons that were never taught, and Victoria pays for every hour of them, on this episode of Audit This.

04:27 What the enrolment was worth

In July 2008, a company called St Stephen Institute of Technology was registered with a director named Baljit Singh. Its premises were on High Street in Reservoir, in Melbourne’s north.

In October 2010, St Stephen was added to the Commonwealth Register of Institutions and Courses for Overseas Students.

That registration is the one that matters, so hold onto it. It gave the school the authority to market to overseas students, and to create their enrolments. And a certificate of enrolment was what an overseas student needed to apply for a visa to come and study in Australia.

Which means a private company, on a register, was issuing the document an Australian government department relied on to decide who came into the country. Not the decision. The document the decision was made on.

In November 2010, Rakesh Kumar acquired a 25 per cent stake in St Stephen, having helped Singh obtain the training registration in the first place. Both men had access to the Commonwealth database through which those certificates of enrolment are produced.

Across town in Footscray there was a second school. Symbiosis Institute of Technical Education, registered as a training organisation in July 2010. Mukesh Sharma bought into it in February 2014, and held about 10 per cent.

Symbiosis was approved to deliver diplomas in business, advanced diplomas in management, certificates in accounting, and certificates in printing and graphic arts. Courses of 6 to 18 months.

Both schools were also registered with the Victorian Department of Education, to deliver vocational courses to domestic students. The judgment calls that funding the Skills Victoria Grants Program in one place and the Victorian Training Guarantee in another. Same money. It is the second name that the rest of this episode uses.

So there were two kinds of customer, and the difference between them is the difference the rest of this episode turns on.

Overseas students paid their own money. The judgment is specific. They were full fee paying, self-funded, and received no subsidy from the Commonwealth or Victorian governments. They were buying training, a qualification, and the visa that let them stay while they studied.

Domestic students paid nothing. For them, the government paid, through a subsidy, for every hour of training the school reported having delivered.

06:42 What a college looked like

One group paid at the counter. The other was paid for, by everybody, afterwards.

So what did these schools look like, from outside? They had rented premises, occupied. Staff. Policy and procedure documents. Teaching and assessment guides. Websites. Rooms, computers and printers. Timetables listing class times and subjects.

Everything a school has. At the sentencing hearing, the Crown set out what all of that actually was. Maintaining and occupying rented premises. Employing a minimum number of staff. Creating and maintaining generic policy and procedure documentation. Creating and maintaining generic teaching and assessment guides that were never genuinely utilised or implemented. Publishing websites with limited functionality and content that appeared to comply with the course requirements.

And, in the same list, failing to provide any genuine teaching and assessment in accordance with the guidelines and standards set by the relevant authorities.

The court’s summary of the two schools together runs to four words. A single fraudulent enterprise.

Here is the thing about that list. Every item on it is a thing a school would have. The premises were real premises. The computers were real computers. The websites were up. Somebody paid that rent every month, on time, for years.

None of it was a disguise. It was infrastructure, and it had one purpose, which was to be seen by the people who check. They were not hiding from the system. They were built for it.

08:01 An hour is the easiest thing in the world to write down

In 2008, Victoria published a policy called Securing Jobs for Your Future. It created an entitlement. If you were eligible, you were entitled to a government subsidised training place, and you could take that entitlement to any approved provider.

By 2011 it covered every vocational qualification in the state, under the name the Victorian Training Guarantee. Around $1.2 billion a year was budgeted for it.

It was demand-driven, which is a phrase worth slowing down on. It means the budget did not decide how much training happened. The training decided how much the budget spent.

In 2010 there were about 426,000 government subsidised course enrolments in Victoria. Two years later there were about 669,000.

In 2010, private providers accounted for 26 per cent of subsidised students. By 2014, 57.

Now, how a provider got paid. A provider signed a funding contract with the department. Under it, the provider had to submit accurate student statistical reports through a departmental system called the Skills Victoria Training System, no less than once every calendar month.

Those reports stated how many scheduled hours of training and assessment had been delivered, in which subject, to which student.

Sit on the unit for a second, because the unit is the whole story. Not a student. Not a course. Not a qualification finished and a person who can now do something they could not do before. An hour, in a subject, against a name.

That is what the state was buying, and that is what it counted. And an hour is the easiest thing in the world to write down.

The contract then says this. The department will pay the provider, quote, Contact Hour Funds for scheduled hours of training and assessment reported under this Schedule One as having been delivered to Eligible Individuals.

In other words, the department paid for hours the provider said it had delivered.

Not hours anybody watched. Not hours anybody verified. Hours reported, monthly, through a portal, by the organisation being paid for them.

10:03 Ninety days, and the checks the provider did itself

Run it forwards, with a student who exists. A person enrols in a diploma. The school schedules the hours. The school delivers the classes. The school reports those hours. The department pays. The student finishes with a qualification, and the state has bought a skill it wanted in the workforce. That is the system working, and for most providers, most of the time, that is what happened.

Now run it backwards, with a student who does not.

A name goes on an enrolment. Hours are scheduled against it. No class is held. The hours are reported anyway. The department pays, because the report says the hours were delivered.

The only difference between those two, on the department’s side of the screen, is nothing.

So the form did not just decide how much training had happened. It decided who it had happened to, and which subject, and therefore what it was worth.

There was a deadline. The department was only obliged to pay for a unit of training where the provider created the claim within 90 days of the enrolment activity start date.

90 days to lodge the claim. Nothing, anywhere, about proving the training occurred.

And to be fair to the contract, it did require things. A documented process for checking eligibility. Evidence sighted before training started. A review of the student before training began. And it gave the department the power to withhold, to deduct, to audit and to recover.

Every one of those was a check the provider performed on itself. The eligibility test, run by the college. The evidence, sighted by the college. The review, done by the college. The report, written by the college. The claim, made by the college.

And then the money, paid by the department, on the strength of the file.

11:53 The audit they knew was coming

There was no step in the payment process where anybody outside the college had to confirm a class had happened.

There was a regulator. On 1 July 2011, the Australian Skills Quality Authority took over the regulation of vocational training. It could audit any registered provider. It could suspend a registration, and it could cancel one.

The conspiracy these four people were later convicted of is charged as beginning on 1 July 2011. The same day.

And an audit, in practice, is a request for documents. Student files. Enrolment forms. Assessments, marked. Completed assignments. Records showing that a person was taught, then tested, then found competent.

The regulator asks the provider to produce evidence about itself, and the provider produces it. Which is the same sentence as the prelude, wearing a different uniform. Nobody sat in the back of the room. Nobody counted the chairs. The file said so.

The first of the two charges the jury convicted on, in the judge’s description, was concerned with a standing plan. A standing plan to present whatever documents were required, to make it look like the schools were complying with the required standards.

Whatever documents were required. Not a document. Not a forgery, singular, done once under pressure. A standing plan, running for years, for a category of problem.

The judgment puts the result in one line. In fraudulently satisfying any compliance checks if audited by the regulator, both schools were able to retain their status as RTOs, which enabled them to continue to operate, to charge fees, and to remain eligible to apply for government funding.

On the front of that judgment, in the catchwords a court writes for other lawyers, is the phrase: wholesale fabrication of documents to deceive regulator.

13:34 One set of answers

Not a forged signature. Wholesale.

If the files survived audits, the files were good. In 2019, the ABC obtained material from the investigation. Across assessments from both colleges, the same answers appear in different students’ work. Not similar answers. The same ones.

Including the same mistake. The word chef, spelled C, H, I, E, F. Repeatedly, across different students, at different colleges.

Somebody had written one set of answers, and everybody had been assessed as competent against it.

The judgment describes what those files were covering for. Students were not genuinely assessed as to their competency in accordance with course progress policy, nor did they receive genuine teaching and assessment, as outlined in teaching and assessment guides, including structured classes, individual and group assessment and simulated workplace environments.

They maintained false timetables for class times and subjects. Students did not attend for structured subject base classes at all.

And then the line that changes who this is happening to. Students were enrolled, sometimes falsely and without their knowledge, and were kept on record with the creation of the superficial student files, fake student assessments and completed assignments and other false documents and records as required.

Sometimes falsely and without their knowledge. Which means somewhere in a Victorian government system there was a list of people who had done training. Names on it. Courses. Hours. The government paid for every hour on that list. Some of the people on it had never walked into the building. Some of them did not know they were on it.

15:10 Twenty three days

According to the ABC, more than 40 students gave evidence at the trial.

The overseas students were the other kind. They paid. They had come on student visas, against enrolments the school itself created. They were full fee paying and self-funded, in the judgment’s words, and received no subsidy from the Commonwealth or Victorian governments. Whatever they got, they bought.

What the Australian Federal Police told the ABC is that they were told they did not need to attend. That they could pay, and the certificate would be issued anyway.

Detective Superintendent Danielle Woodward’s description of the qualifications those students now hold runs to two words. Basically fake.

And remember what the school could do, from Act One. It created the enrolment. The enrolment was the document behind the visa. So the same organisation that decided whether a person was studying was the organisation that produced the document their visa was decided on.

The court’s finding is about the teaching, and it is narrow and it is brutal. Students did not attend for structured subject base classes at all. False timetables. No genuine assessment.

The paper held. Everything the paper described did not. So think about what that certificate is. It is not a piece of paper that is worth less than they thought. It is a piece of paper that says a person can do something, held by a person who was never taught to do it, issued by a college that is now gone.

You cannot hand that back and get the years off.

A covert camera in the lobby of a college should record a college.

The Australian Federal Police installed one at St Stephen. According to the ABC’s account of that material, the device recorded 23 days. On 20 of those days, no student was visible at all. Students appeared on three.

On those three days, not one of them stayed for the length of a timetabled class.

On 5 July 2015, the timetable listed six classes. The footage from that day shows one person entering the building.

17:01 Four minutes, thirty eight seconds

He was there to clean it.

In December 2014, the Australian Federal Police and the regulator began a joint investigation. It had a name. Operation Aristotle.

The regulator’s own account of its part is a single sentence, from its Chief Commissioner at the time, Chris Robinson. ASQA has been assisting the AFP with its investigation, Operation Aristotle, into individuals who either own or are high managerial agents with these RTOs.

For months, they watched. Then, on 1 July 2015, the regulator rang Baljit Singh to let him know that an audit visit was coming. A routine call. The regulator announcing itself, exactly as the process required.

The police were listening to it. According to the ABC, the call ran 4 minutes and 38 seconds.

What happened after it, the ABC also reported. Computers were carried into the building. Paperwork was carried into the building.

The computers were not networked. They were not connected to anything.

Five weeks later it stopped. On 5 August 2015, police executed search warrants across Melbourne. Charges were laid. The regulator suspended both colleges the same day, and from that morning neither of them could train anybody, enrol anybody, advertise anything, or issue a single piece of paper.

Eight months of an investigation, and it ended in a morning.

The trial ran through the first half of 2018, and the jury convicted all four on both charges.

At the sentencing, the judge recorded what the prosecutor had put to that jury in his closing address. That these schools were a sham, where a facade of legitimacy was used to fraudulently obtain thousands of dollars from international students and thousands from the Victorian government in subsidies for domestic students.

And then the judge’s own sentence about it. The jury’s verdicts reflect their acceptance of that submission.

Here is how the judge described the mechanism. Students were enrolled, sometimes falsely and without their knowledge, and were kept on record with the bare minimum being done, so that the schools could receive government funding.

So that the schools could receive government funding. That was the purpose of the classrooms. Not a consequence of them.

19:07 Over-inflated

It would be easy to finish this as a story about four people and two buildings. It is not one.

By 2015 the state had worked out that something was wrong with its training market. It commissioned a review.

The review found an entitlement that was effectively unlimited, covering every course, through a growing number of providers, with no cap. Its verdict on what that had done is one line. In past years, this has led to significant budget overruns resulting in the manipulation of subsidies to address spikes in demand.

Spikes in demand. When the demand is a monthly report, a spike in demand is a spike in reporting.

The review also found a proliferation of training providers without any assurance of quality. The government’s response came in December of the same year.

The department launched what it called a quality blitz. Between July 2015 and the end of 2016, 62 training organisations were investigated. 21 funding contracts were terminated.

And $48 million was identified for recovery. Identified. Not recovered. Located.

Looking back at those years, the department’s own market report said government funded training activity in Victoria had declined every year since the record highs of 2012, demonstrating clearly, in its words, that training activity in previous years was overinflated.

Overinflated is a department’s word for a number that was never real. And the reason the number was never real is the reason this episode exists. The number was a sum of monthly reports, and a monthly report is a claim about the past written by the person being paid for it.

20:39 Thirty four cents each

Now put our two colleges back into that. $2 million, out of a program budgeted at about $1.2 billion a year.

Across 16 months, from two colleges, in a state of just under six million people, it is $0.34 each.

Nobody feels $0.34. There is no line on any bill. There is no ratepayer who looks at a number and thinks that is wrong.

And that is the condition the whole thing runs in. Not a heist anybody notices. A rate of loss below the threshold at which anybody is required to look.

The Crown made a related point at the sentencing, and it is the most useful sentence in the judgment. Offences of this kind, it said, are generally difficult to detect, investigate and prosecute successfully.

Difficult to detect. Not difficult to prove once you know. Difficult to see at all.

And these two were not detected by the system that was paying them. According to the ABC, the investigation began with a tip-off.

Which leaves one question the published record cannot answer, and it is the question this episode is actually about.

$48 million was identified for recovery in 18 months, from 62 investigations. That is what looking found, in the period after somebody started looking.

Nobody has published a figure for the years before that, when the reports came in monthly and were paid, and when the only way in was a phone call from somebody who knew.

There is no number for what nobody looked for. There cannot be. That is what the design means.

In December 2023, a Victorian court sentenced two more people over training that did not happen. About $2 million, taken from two public TAFEs, claimed for training that was not delivered. Both pleaded guilty to obtaining financial advantage by deception.

The judge described the work as filling in forms and spreadsheets with false information, to get the payout. In a text message, one of them asked the other how the sausages were going.

Different people. Different colleges. Public institutions this time, not private ones. Eight years after the raids in Melbourne.

Same forms.

22:54 The ledger

On 5 August 2015, the day the charges were laid, the regulator suspended both colleges under the National Vocational Education and Training Regulator Act.

St Stephen Institute of Technology, registered training organisation 22336. Symbiosis Institute of Technical Education, 22331.

In the regulator’s own terms, that meant this. No training and no assessment. No new students. No advertising and no promotion of courses. No qualifications, and no statements of attainment.

Symbiosis never returned. Its registration expired in 2016 and was not renewed. St Stephen’s registration was cancelled in November 2017.

A jury found four people guilty of both charges. Conspiring to dishonestly influence a Commonwealth public official. Conspiring to deal in the proceeds of crime.

Sentenced, 21 September 2018. Baljit Singh. 6 years. Non-parole, 3 years and 9 months.

Rakesh Kumar. 5 years. Non-parole, 3 years. Mukesh Sharma. 5 years. Non-parole, 3 years.

Rekha Arora. 3 years. Released immediately, on a $5,000 recognisance.

Public money obtained from the Victorian training system, March 2014 to July 2015. $2,007,487.75. Including goods and services tax.

The judge’s explanation of why it was paid runs to one sentence. These subsidies were fraudulently claimed because the students were not being properly taught, if at all.

There was one more case. In November 2019, the same court dealt with a second matter, about a loan obtained on false documents.

Singh pleaded guilty to that, and to one other thing. Attempting to pervert the course of justice, by having an invoice reissued and then pressing a builder to tell police a version of events that was not true.

The builder is not named here. He was a witness.

The sentence for that second matter was ordered to be served at the same time as the first, so it added nothing to the years.

A document that said the wrong thing, fixed by having a new document issued, and a person asked to say the new document was right.

25:05 Nobody counted the chairs

When the convictions came through, the national regulator put out a statement. Its Chief Commissioner, Mark Paterson, said there is no place in Australia’s VET sector for companies and individuals who are not genuinely committed to providing high quality training and assessment that arms learners with the skills and experience that employers need and want.

$48 million was identified for recovery in 18 months of looking. Nobody has published a figure for how much was never identified. $2,007,487.75 left the Victorian budget, and we could find no public record of what came back.

Nobody sat in the back of the room. Nobody counted the chairs.

The file said so.