Bradford Council's internal auditors have launched a full-scale inquiry into the troubled training scheme at Metrochange House.
More than 40 former students have been told the National Vocational Qualifications they received at the end of the Council-run courses are invalid.
And this week a further bombshell was dropped when it was announced that 80 existing students were being told they needed to re-do course work.
Bradford Training and Enterprise Council funds the students on the courses as part of a £15 million grant it receives from the Government.
But TEC is not involved in the running and delivery of the courses.
TEC chief executive David Wilkinson has said his organisation would seek reimbursement if the Government decided to claw back any of the funds.
The internal auditors were called in when problems came to light after a member of the public complained to the Examining Body - the London Chamber of Commerce and Industry.
The LCCI and Quality and Curriculum Authority - which reports direct to ministers on the standard of schemes - is also carrying out an inquiry.
The Council launched a management probe into the matter recently.
A Council spokesman said today the inquiry had been stepped up with the internal auditors now undertaking a full-scale probe.
"The internal audit investigation is being carried out in conjunction with the QCA - which is an independent body," he said.
But today both the Tories and Liberal Democrats opposition group on the Council called for its external auditors KPMG to be brought it.
Liberal Democrat leader Councillor Jeanette Sunderland said: "This is like the Council carrying out an investigation into itself."
Tory Group leader Councillor Margaret Eaton said she would contact KPMG.
Mr Wilkinson said: "The investigations into this very sad episode are a matter for the QCA and local authority internal management."
He said they would hear directly from the QCA.
Mr Wilkinson added that the welfare of these students was a priority and they were working to ensure the position was restored with trainees who had not achieved the standards they believed they had.
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