Training providers were overpaid pound;4.6 million last year (20045), largely because the Assembly government inherited a flawed financial system from ELWa, the former post-16 education funding agency.
Although pound;3.3m arose from false claims, Steve Marshall, the government's education director, appears to have ruled out the possibility of providers "deliberately submitting erroneous data". Were that the case, he would call the police, he told the committee.
"Two-thirds of erroneous payments related to only six providers in the first case of error, and 11 in the second," the committee's report says.
"We took only limited reassurance from the view of officials that they were not knowingly doing this."
Some overpayment stemmed from providers failing to report students who had completed courses or dropped out. But errors could have been reduced with better checks, says the report.
Future contracts must improve safeguards over the use of public funds, and the quality of training provided. Of 69 private providers, 10 were currently categorised as high risk and 44 as medium.
Assembly members were particularly concerned about poor audit results from public-sector training providers, such as councils or colleges, where practice was expected to be better.