The Skills Funding Agency has promised to crack down on fraudulent submissions after two company directors who obtained tens of thousands of pounds for bogus training courses were convicted of conspiracy to defraud.
Julie Baker and Stuart Evans, the directors of East Yorkshire-based Care Sector Trust, submitted paperwork including forged signatures for courses to help homeless people and ex-offenders to find jobs. But the training never took place.
The pair fraudulently received pound;54,000 from the former Learning and Skills Council (LSC) and the European Social Fund for the courses. They were both convicted of conspiracy to defraud but avoided jail terms after receiving suspended sentences.
A spokeswoman for the Skills Funding Agency (SFA), the LSC's successor, said: "The agency takes allegations of financial irregularity very seriously.
"We rigorously investigate any allegations of wrongdoing to the fullest extent to ensure public funds are protected."
Hull Crown Court heard that staff at the company, based in Snaith, received a total of pound;337,000 in funding from the two bodies for courses, including legitimate training sessions, that it ran between 2003 and 2006.
The SFA spokeswoman said: "The fraud included submitting documents with forged signatures purporting to show that people had attended employment training courses that had never taken place.
"Also, they had ordered staff at the company to sign off paperwork in other people's names."
The fraud paid for Baker - who used to chair the Women in Business networking organisation in the Hull area - and Evans to continue drawing their salaries as company directors, as well as running company cars. Care Sector Trust has since gone into liquidation.
Baker and Evans had previously both pleaded guilty to two charges of conspiracy to defraud. Last month, Judge Simon Jack gave them both a nine- month prison sentence, suspended for two years. He also ordered them to carry out 300 hours of unpaid community work each, but said he had decided against immediate custodial sentences because of their previous good character.
The SFA runs a dedicated investigations unit which monitors allegations of fraudulent or irregular activity.
The latest fraud comes seven months after Paul Kent, director of adult learning at the LSC, was jailed for setting up a contract-rigging ring which siphoned off pound;1.3 million in public money. The ringleader pocketed pound;270,000 after setting up contracts with organisations run by conspirators.
Kent was sentenced to four and a half years' imprisonment for obtaining pecuniary advantage by deception and 11 counts of receiving corrupt payments. Three other people were convicted of multiple charges of corruption.
In November the SFA announced it would crack down on colleges which obtain extra funding by submitting inaccurate data.
The agency said a small number of providers had "tarnished (its) otherwise positive relationship (with the sector), and have achieved financial gain at the expense of both learners and the public purse, whether through ignorance or design".
It warned that misleading data submissions "require a disproportionate amount of managerial resource to deal with them" and said it would stop funding suspect providers if necessary.