Amber Fairweather had no warning of her employer’s pending collapse.

In July, she was told half of her role at Developers Institute was being made redundant.

She was even told things were improving at the online tertiary education provider.

Then Fairweather was invited to participate in a Zoom meeting with advisory firm BDO, who were set to be appointed liquidators.

Developers Institute – which offered diploma courses in web and software development – was largely funded by the Government through the Tertiary Education Commission (TEC) via a Targeted Training and Apprenticeships Fund (TTAF).

But the TEC reduced its funding twice between January and August this year - which resulted in a 50% reduction in revenue after it incorrectly reported the number of enrolments.

That hit the company’s income even further with a 79% drop in forecast enrolments in April.

It eventually collapsed last month owing more than $2 million with BDO’s Rees Logan and Andrew McKay appointed as joint liquidators.

According to their first report, the TEC claimed Developers Institute was overpaid TTAF and attempted to clawback fees of around $1.3m paid to Developers Institute.

Its parent company, Parasol, sought legal advice and disputed the claim, but it wasn’t withdrawn or reduced.

A spokesperson for the TEC told Newstalk ZB Plus there was “substantial” debt owing to them and it was important they clawed it back to redistribute to better-developing providers.

As well as that, it also delivered less education and training than it expected and was funded for.

The TEC was required by law to recover overpaid funding and Developers Institute had agreed to repay the commission if enrolments were below expectations, students don’t complete courses or the teaching is different from what was funded.

It was confirmed there were additional amounts owed from under-delivery in 2021, which was confirmed late last month.

TEC had also been made aware of liquidity issues before then and that Developers Institute was unable to obtain further support from financiers.

It was important they recovered the overpaid money to redistribute to better-delivering tertiary education providers, they said.

Developers Institute had already been fully paid for the level of teaching it had advised them they were expecting to deliver this year.

Fairweather was a student support manager at the institute. On August 22^nd, she received 65% of her full pay, but was told that was because of an unforeseen direct debt with the balance paid the following week.

“The next week came and I received no pay.”

The week after that, it collapsed.

“I had no time to prepare for finding alternative employment, nor did I have any annual leave paid out to provide me with a financial buffer while I looked for work. In desperation, I went to MSD, which could offer me $18/week because my husband earns, albeit not enough to cover weekly rent and food.”

TEC had looked at possible avenues to continue supporting it but was unable to do so, the spokesperson said.

It was now working with NZQA in supporting affected students to find alternative providers to continue their studies, the spokesperson said.

According to BDO’s report, across the entities involved in the provider there was more than $1.4m in assets, the majority of which were accounts receivable.

Specifically for Developers Institute Limited, there was a shortfall of $2m to creditors.

Creditors included major tech companies, Meta, LinkedIn, and Microsoft as well as Inland Revenue.