West Coast's Tai Poutini Polytechnic has received the New Zealand Qualifications Authority's worst-ever quality rating for a public institution, because of serious governance and mangement deficiencies.
The authority (NZQA) said it was not yet confident in the quality of education at the organisation, and not confident in its ability to assess its own performance.
It gave Tai Poutini a quality category of four - the lowest possible rating and the first time a Crown-owned institute had received such a low figure.
The previous low was a three awarded to Taranaki's Western Institute of Technology in February.
The rating means the polytechnic, which had 1900 full-time-equivalent students last year, must find another institute to verify its students' results and check that its assessment materials meet the required standards.
The authority's report said Tai Poutini's education had been undermined by the way it managed academic standards and met its compliance obligations.
Tai Poutini had weak processes for monitoring its performance and course completion rates had fallen, it said.
NZQA said the polytechnic was making improvements, but it would not improve its quality rating until had evidence that the changes were effective and consistently applied across the institution.
The government put Tai Poutini under Crown management at the end of last year and gave it a $3.6 million dollar bailout in February because it could not make ends meet.
NZQA's report listed a string of short-comings in recent years, including problems with moderation, and a yet-to-be-competed Tertiary Education Commission investigation that indicated the polytechnic had not delivered as many teaching hours as it had been paid for.
Tai Poutini Polytechnic chief executive Alex Cabrera said the report was disappointing but not a surprise.
The institute's staff and governing council had been aware of the issues and working to fix them during the past year, he said.
"Management and staff were working on the issues raised in the report for some time - many of the issues were identified internally in 2016. We are very open to both accepting, and responding to, the need for change," he said.