The Victorian Education Department has issued GOTAFE with a formal reprimand.

On Friday the TAFE's general manager of education, Margie Fixter, emailed staff to notify them of a “significant concern” about compliance with training packages, the enrolment of students into inappropriate courses and interstate enrolments.

“I need to alert you to a serious matter,” a leaked copy of the email reads. “As a consequence, an immediate freeze is now in place for all new enrolments in travel and tourism, hospitality and meat processing programs.”

She said the situation had significant implications for GOTAFE, which has campuses at Wangaratta, Benalla, Shepparton and Seymour, and it would conduct a detailed review.

Insiders allege the TAFE won extra public funding by enrolling students in top-level courses, with more funding, and then exiting them with lower qualifications.

It is understood that an employment agency was also involved.

The TAFE has also been accused of enrolling students with inadequate literacy and numeracy skills into courses.

The department and TAFE refused to confirm or deny the allegations, or elaborate on what took place.

Member for Euroa and Opposition spokeswoman on training skills apprenticeship Steph Ryan called for government action.

“Gayle Tierney needs to make a full explanation to GOTAFE’s students caught up in this mess, who are entitled to know if their training is valid,” Ms Ryan said.

A government spokesman said of TAFEs "we expect them to operate with integrity and to deliver for students."