Fraud squad detectives have sent a report on alleged bogus courses at a Birmingham college to the Crown Prosecution Service, Lucy Ward writes.
The step follows a year-long police investigation into allegations of fraud involving franchised classes which Bournville College paid others to run for them.
The CPS will now examine the evidence to decide whether to bring charges against course providers.
Bournville called the police in February last year after discovering that many courses sub-contracted by the college did not exist.
The college paid Pounds 140,000 to four franchise providers, but cancelled payments of almost Pounds 1 million after it investigated.
The police report is understood to deal only with one provider, Birmingham-based PCC, involved in allegedly fraudulent franchise deals with the college. If the CPS decides there is case to answer, other groups may be investigated.
The CPS's decision will partially rest on whether Bournville had adequate quality control measures to monitor its franchised operation. It will also examine how much individuals who were involved in supplying courses knew of the alleged fraud.
Bournville's case was among those which prompted the Further Education Funding Council to launch a review guidelines on franchising last year. Then new, tighter guidance was issued last April.