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Allied Security is being investigated after it was accused of providing its staff with the answers to New Zealand Qualifications Authority-approved tests in order to claim subsidies.
In February, a manager emailed staff completing a level two training assessment copies of "suggested answers", and told them to put them into their own words when filling out assessment booklets.
The email adds: "There is now no excuse not to do this."
A staff member complained to the relevant union, Unite, and provided copies of the emails.
In a statement, Unite union spokesmen Barry Sutherland and Mike Treen said the order amounted to "cheating" and the union had asked NZQA to investigate.
Allied Security's head office is in Hamilton, but the firm was started in Dunedin by the present managing director, Damian Black.
The statement said the union believed the company might have been motivated by Government subsidies it received for each NZQA credit awarded to its staff members.
It was an example of training practices across the security industry which were substandard because of deregulation and a lack of professionalism, and the union was concerned companies supplying the answers to NZQA-approved tests were "cheating the system".
However, Michael Frampton, corporate communications director for the Electro-technology Industry Training Organisation (ETITO), the organisation that oversees training and assessment for the security industry, defended the system.
He said he had confidence in ETITO's assessment process, which was overseen by approved assessors within the industry and checked by external assessors, who sampled assessments from every firm.
No training or qualifications are required for people to work as a security guard or bouncer in New Zealand, but security firm employees can sit optional assessments to gain national qualifications.
Firms whose staff take the courses are eligible for subsidies to assist with the training and assessment, which is mostly done in the workplace.
Mr Frampton said firms had the option of using the money to employ outside organisations to oversee the training and assessment, but they were free to spend the money how they wished.
As soon as ETITO became aware of the issue, all assessment results from the firm were held and no new results were being processed for anyone employed by Allied Security.
If the allegations were substantiated, ETITO could deregister the assessor concerned and/or withdraw their support for national training arrangements for Allied Security.
Staff who had gained the qualifications already would not be stripped of them.
"We have to take care of any individual trainees who have fallen victim to any unacceptable assessment practices," Mr Frampton said.
ETITO had no evidence cheating was widespread in the industry.
Mr Frampton did not know how long the investigation would take.
It had been hampered by an inability to reach Mr Black.
There was no answer at Mr Black's home or on his cellphone yesterday.
Staff at Allied Security's Carisbrook office referred the Otago Daily Times' queries to Mr Black, who they said was out of the country until May 17.
Mr Sutherland, from Unite, said he spoke with Mr Black three weeks ago, at which time Mr Black denied all knowledge of the email from the company's operations manager, despite it apparently being copied to him.
On its website, Allied Security says it is the third-largest security firm in the country.
It employs more than 300 people full-time and 200 part-time and has contracts to provide security for groups including Fonterra, the Christchurch Central City Business Association, Lincoln and Waikato Universities and the Waikato District Health Board.
The company supplies security for the Dunedin City Council events management team, the city safety scheme, Otago University and the Otago Rugby Union, among others.