The number of potential fraud cases referred to the Skills Funding Agency (SFA) more than doubled between 2012-13 and 2013-14.

In the SFA’s annual report and accounts for 2013-14, it said that 108 new “allegations of financial irregularity” were considered, compared to 52 the previous financial year.

The figure for the number of allegations in 2013-14 was 132, but the SFA said 25 allegations related to one case, although it declined to identify the provider.

The report said: “Therefore, the total number of new cases considered during the period was 108.

“There were 40 cases (of which 21 were investigations) brought forward from 2012-13 and a further six allegations brought forward that had not been entered into the vetting and assessment process as at April 1, 2013.

“During 2013-14, 37 investigations were closed and, as at March 31, 2014, there were 18 investigations ongoing and 22 cases at the vetting and assessment stage.”

An SFA spokesperson told FE Week: “We are continually reviewing and strengthening our governance and business processes, particularly in relation to allegations of financial irregularity.

“At the beginning of this year, we changed the way we report on allegations and now also include those that were referred to other agencies.”

The report for 2012-13 had said that 41 allegations were brought forward from the previous year and 52 were made to March 2013.

No case was referred to the police in 2012-13, but one case was passed on to officers in 2013-14, although they decided not to take up a criminal investigation, according to the SFA.

An AoC spokesperson said: “The SFA spent more than £4bn in 2012-13 on more than 2,000 organisations via some 40 programmes.

“We see SFA’s investigation work as being necessary to protect the public purse. The issue here isn’t the number of investigations that have been conducted but what the outcomes were.”

Stewart Segal, Association of Employment and Learning Providers chief executive, said: “We fully support the zero-tolerance approach to potential fraud taken by the SFA.

“There are very few cases of fraud in the sector and as the annual report says most of the errors found in audits are misapplication of funds or where there is insufficient evidence.

“The error rates of PFA audits are around 1 per cent which shows that providers meet the complex rules of funding and evidence.

“The process for dealing with any funding issues needs to be robust, effective and transparent and it is good news that there are very few cases where there is evidence of fraud.”