A training company whose state funding was cut after a Sunday Mail investigation into job agencies luring the unemployed into subsidised courses has collapsed into liquidation.

It comes as nine companies remain under investigation by the State Government, which will consider hiking penalties for companies caught breaching contract rules under the training scheme.

A special investigation by The Sunday Mail in August exposed a scheme in which job agencies would advertise entry level jobs, such as factory and warehouse work, only to tell applicants they would need to sit through a "free" Certificate 3 course with a particular trainer to be eligible for work.

The applicants are then referred to a registered training organisation, which could receive as much as $60,000 in taxpayer funding for a two-week course.

Any talk of job offers would dry up after the course, with recruiters cutting contact.

The Sunday Mail reports triggered the Government to launch a three-month investigation, which probed whether training organisations were paying kickbacks to recruitment agencies to lure the jobless into subsidised training courses - a practice forbidden under state contracting rules.

Compact Services director Grant Hitchen. (Image/Josh Woning)
Compact Services director Grant Hitchen. (Image/Josh Woning)

No evidence of illegality or kickbacks were uncovered by the inquiry, according to a report on the results released this week, but investigations are ongoing into multiple training organisations.

The report revealed the Department of Small Business and Training was challenged in its regulation of the Certificate 3 Guarantee funding scheme by a lack of statutory powers to compel the production of documents and conduct investigations.

"It is noted that despite many allegations (training organisations) have contractual arrangements with recruitment companies where they pay for student referrals, the existence of any such arrangement has not yet been proven during investigation undertaken to date by either the department or (the Queensland Training Ombudsman)," the report found.

The Government revealed in August it had axed its funding agreement with one registered training organisation featured in The Sunday Mail investigation in the wake of the reports, Compact Services Queensland.

The Sunday Mail can reveal the company, of which Sunshine Coast businessman Grant Hitchen is a sole director, is being voluntarily wound up, along with Mr Hitchen's Horticultural Training. Mr Hitchen refused to comment back in August and did not return the newspaper's calls yesterday.

He and wife Hope are the sole shareholders in the two companies.

It has not been revealed if the company was one of those sanctioned and no companies were named in the inquiry's report.

Another company to enter liquidation is Job Coaching Australia, whose shareholder is owned by Brisbane businessman Darrell Ballard. Mr Ballard's service "The JobCoach" was used as a middleman booking job applicants into subsidised training.

The JobCoach's website domain was registered to Mr Ballard, whose LinkedIn profile stated he was managing director of "Job Coach". Mr Ballard did not return calls. The company is not a registered training organisation and is not regulated under the Government training scheme.

A report on the Government inquiry, led by the state's independent Training Ombudsman, was finished this week.

It revealed one training organisation had so far had its agreement terminated and three others hit with sanctions.

Another three have been issued show cause notices, with a further two training organisations facing a show cause notice. Two forensic investigations are also underway.

It has recommended tougher the State Government consider tougher penalties for breaches of contract.

Training Minister Di Farmer said the Government had accepted five of the inquiry's recommendations in full and a sixth recommendation in principal. "This is all about cracking down on those doing the wrong thing so people can feel confident that when they apply for a job that the position exists.

Originally published as Job firm goes bust after investigation cuts funding