The Tertiary Education Commission cannot protect staff who blow the whistle on rorts at tertiary institutions, it has revealed.
The commission also told parliament's education and science select committee it was preparing to write-off nearly $9 million owed by institutions which delivered less teaching than they were paid for, at its annual review today.
Abuse of the funding system by tertiary institutions dominated the commission's appearance, but chief executive Tim Fowler assured MPs the problem was not widespread.
He said the commission had ordered six institutions to repay $28 million, and that was not much given the size of the sector.
"That $28m is still well less than 1 percent of the total amount of the funding that we provide so that's the context. Let me say we're absolutely not going to stand for anyone messing around with the system, and that is why we pursue these institutions as far as is appropriate."
Mr Fowler later said there was little chance of getting $9m of that money from the Manaakitanga Aotearoa Charitable Trust and Agribusiness Training - private institutions found to have delivered less teaching than they were being paid for.
But he said the commission was doing more than ever to prevent further abuse of the funding system.
"We are increasing the number of audits we do per annum from around 30 to 40 and will have that ramped up to about 70 by at least mid-year, maybe towards the second half of the year."
The commission had started using pattern-recognition software, as well as having fortnightly risk assessment meetings with the New Zealand Qualifications Authority.
But commission chairman John Spencer said despite the extra effort, the commission could not guarantee there would be no further problems.
"If you really want to get into this, if you wanted us to make sure ... nothing is ever going to happen again, I'll employ 600 auditors if you like, everyone's got to be in every class over 4000 providers, whatever the heck it is. I mean it's just silly, sorry with respect."
Labour MP David Cunliffe has been challenging the commission over its scrutiny of the sector for months.
At today's hearing, he made its staff eat humble pie for problems with their annual accounts which resulted in it getting a qualified audit opinion for the first time.
Mr Cunliffe also asked if the commission could protect whistleblowers who alerted it to potential fraud.
Mr Spencer replied that it could not.
"We're not their employer. We can give them protection in terms of what's available under the legislation but we couldn't say to the employer 'now don't sue them'. We can't do that, we don't have that ability," he said.
Mr Cunliffe later told RNZ News it was not good enough and the commission must do more.
"I would like to see them make a public commitment that if a whistleblower came forward to them that they would offer to treat them in confidence," he said.
"Secondly I'd like to see a directive from them to the institutions that retribution against whistleblowers, where the complaint is found to be valid, is inappropriate."
Mr Cunliffe said a whistleblower who alerted the commission to proven problems at a tertiary institute was now being sued for bringing it into disrepute.