More than 1000 students will have their qualifications revoked as a result of sub-standard courses run by Vocation.
Embattled education group Vocation will tear up the qualifications of 1100 of its students and hand $8 million back to the Victorian education department as it struggles to regain its feet.
The ASX-listed education company announced on Monday it had revoked the qualifications in areas including in first aid, aged care and children’s services – because the quality of the training provided to students wasn’t wasn’t up to scratch.
Vocation will also repay about $8 million in funding to the Victorian Department of Education and Training over the next 18 months.
Vocation’s Stewart Cummins said the situation was ‘obviously disappointing, but it’s part of the game plan that was needed to re-set the business’. Photo: Sasha Woolley
Chief executive Stewart Cummins, who took over the running of the company in late 2014 and embarked on a series of asset sales to appease nervous banks, said the company had been working with the Victorian government over the past few months.
“It’s obviously disappointing but it’s part of the game plan that was needed to re-set the business,” Mr Cummins said on Monday.
New audits
Vocation was responding to the findings of fresh regulatory audits which happened in early 2015.
It was also addressing the issues left over from the closure of its controversial BAWM training business, as well as issues related to its Learning Verve business.
Mr Cummins said the company had reached an in-principle agreement with the Victorian department after the recall of the 1100 student qualifications.
Mr Cummins said each of the affected students cases was different. But in general they would be able to re-enrol with other education providers and claim credit for parts of their courses.
Mr Cummins said Vocation felt it was right to encourage students to go to a different training organisation because of the issues they had encountered.
“We felt it was the right thing to do. It’s cleaner to be able to do that,” he said.
The withdrawal of qualifications applies to students who undertook four programs during 2014 in aged care, children’s services, business administration and competitive systems and practices.
They also apply to students who did two specific units in First Aid, and Assist Clients with Medication.
Mr Cummins said Vocation had undertaken a comprehensive process to identify and address compliance issues, and had fully adhered with directives from regulators.
Mr Cummins said the financial impact of the repayments has already been covered by the provisions taken by Vocation in its first half-results for 2014-15. Vocation intends giving a fresh profit forecast to the market soon.
Stable trading
“Trading is stable generally,” he said.
But Mr Cummins said the company still had work to do to clean up previous problems.
Vocation, which floated on the Australian Securities Exchange in late 2013.
But it lost more than $700 million in sharemarket capitalisation in the space of a few weeks after an initial brush with regulators was revealed in September, 2014, shredding investor confidence because of poor disclosure by the company.
The share price continues to languish at around 14.5¢ after having hit $3.40 in early September, 2014. But it has been as low as 6.8¢.
In March Vocation sold the biggest business in its stable, natural health training courses business Endeavour College of Natural Health, to help stabilise its balance sheet. UK-based global company Study Group bought Endeavour for for $75 million.
The banking syndicate to Vocation, comprising National Australia Bank, Westpac and Commonwealth Bank, insisted on hefty asset sales before they would agree to continue as financiers.
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