In what one ESFA official is alleged to have called a “f*ck up of epic proportions”, all 80 training providers in receipt of around £300 million of European Social Funding are being investigated after funding claim “discrepancies” were discovered.
As a result, contract compliance for the 2014 to 2020 ESF programme has been thrown into doubt.
In early April the ESFA wrote to providers with concerns that evidence was missing from learner files. FE Week has seen a copy of the ESF contract which states that where a learner is enrolled on to a course involving a regulated qualification, then the “evidence requirement” for a start payment is registration to an awarding body.
On 1 April, the day after contracts had ended, the ESFA wrote to all providers as part of a “nationwide exercise across all ESF contracts” with concerns that this evidence was missing from learner files.
They requested that a small sample be checked within two weeks because: “We have become aware of discrepancies with the evidence held to support the claiming of a start payment for a Regulated learning aim.”
In April the ESFA did, in fact, find a significant amount of non-compliance which led to a follow-up email in early May requesting “further investigation at all providers.”
“You are now required to complete a 100 per cent check of the aims and record what evidence you have available for Awarding Body registration, along with the date of that registration,” providers were told in an email dated May 2, with a May 28 deadline to complete the exercise.
Despite the highly unusual nationwide compliance checking of all records, the DfE told FE Week: “As part of our business-as-usual closure checks we validate data and sample compliance check the providers claimed activities.”
And initially, the DfE said the checks were not about funding compliance, claiming: “The purpose of these checks is not to cancel funding for any providers and we do not anticipate receiving any money back from providers.”
However, the DfE appeared to backtrack when FE Week shared the ESFA email sent to all ESF providers in early May in which it said “where the evidence is not available you will need to remove these claims.”
Having reviewed the ESFA email, a DfE spokesperson added: “When we finalise the contract for closure we do not anticipate we will need to claw back any funding as we have worked with providers to try and ensure this is not the case. However, if an external audit confirms irregularities we will of course claw back funds.”
FE Week has spoken to several providers affected, who claim the ESFA had not been clear enough in the contracts or previous audits that they would need awarding organisation registration evidence to justify start payments.
The ESFA has since strengthened the wording in contracts starting April 2019 ensuring that learners are registered with the awarding body prior to the start claim being made.
But it is understood that for the contracts to March 2019 there are likely to be millions of pounds of start payments for thousands of learners who did not finish their course and for whom they were not registered with an awarding organisation.
The ESFA said in their communication with providers in early May that they would need to remove these claims and it remains unclear whether this has been done and, as a result, what scale of funding claw-back could follow.