Greymouth's polytechnic is being accused of rorting course credits and inflating numbers with "ghost students".
In a letter to Labour's David Cunliffe, the Search and Rescue Institute of New Zealand (SARINZ) accused Tai Poutini Polytechnic of putting lives at risk.
Mr Cunliffe asked in Parliament how the polytechnic could compress a one-year course into a one-week course and get full funding for it, and also enrol tutors as students to get extra money.
"In a letter Tony Wells, acting general manager of SARINZ, asks: 'Are students aware that as SAR responders their lives are being forsaken so the polytech can make money?'
"Also Mr Wells says Tai Poutini is inflating student numbers by enrolling tutors as 'ghost students' to boost funding and rort the system."
In a statement, Tai Poutini Polytechnic said the Search and Rescue Institute was a disgruntled former sub-contractor which had previously laid complaints with the Tertiary Education Commission and the Qualifications Authority, complaints that were rejected.
Tertiary Education Minister Steven Joyce said the statement was made by a competitor of the Greymouth course but he was happy to look at any new information.
The accusations come days after revelations that Taratahi Agricultural Training Centre in Masterton was found to have enrolled its own staff in a course, but delivered little or no teaching.