Police are investigating allegations of fraud at the government-funded apprenticeship provider 3aaa, which has collapsed into administration, putting 500 jobs and 4,500 apprenticeships at risk.

3aaa – which stands for aspire, achieve and advance – was placed into immediate administration after the Department for Education pulled all of its funding from the firm following an investigation. “Following our investigation we have referred our findings to the police, through Action Fraud [the UK’s fraud hotline],” a spokesperson for the DfE said on Friday. Derbyshire Constabulary confirmed that it is investigating the firm.

The collapse of the biggest apprenticeship provider has left 4,500 apprentices at companies including Ocado, Virgin, Volkswagen and National Grid at risk of failing to complete their courses. The DfE’s Education and Skills Funding Agency allocated more than £31m to 3aaa last year for apprenticeships and adult learning schemes.

Separate to the fraud allegations, the Guardian and FE Week have seen documents that reveal 3aaa spent more than £1.6m of its mostly government-funded income on professional sports sponsorship. The money was spent on sponsorship between 2015 and 2018, despite the firm making a £2.8m pre-tax losses in the 18 months to January 2018, according to unpublished company accounts.

3aaa spent £480,000 to become the “principal partner” of Derbyshire County Cricket Club, which includes shirt sponsorship and the right to rename the club’s 147-year-old ground as “the 3aaa County Ground”.

The sponsorship deal gave 3aaa’s founders, Peter Marples and Di McEvoy Robinson, access to the team’s 1870 Business Club – a “relaxed and informal environment where local businesses can meet, create new contacts and watch first-class cricket”. Marples and McEvoy Robison are seen in the club’s team photo.

Marples and McEvoy Robinson, who both resigned as directors from 3aaa last month, also feature in Derby County Football Club’s team photo. 3aaa has pumped £380,000 to the Rams in sponsorship. A further £200,000 was extended to Norwich City FC, £175,000 with Rotherman FC, £146,000 spent at Leicester Tigers rugby club and £132,000 at Reading FC. Smaller amounts were spent on deals at Birmingham City FC and the Derbyshire FA.

Marples and McEvoy Robinson did not respond to requests for comment. Marples has taken down his LinkedIn and Facebook pages in the last couple of days. There is no suggestion that the sponsorship deals are the subject of the investigation.

3aaa Anthony (@RishtonAnthony) Sorry to all of you I have tried to help since I started at 3aaa #apprenticeships 3 months ago. But today we received the devastating news that the company is now entering liquidation. It's been a pleasure to meet and help you all.

The homepage of 3aaa’s website states: “We apologies for any inconvenience, the company have ceased trading and will no longer be accepting any further business. All the best for all employers, 3aaa apprentices and staff in the future.”

One 3aaa apprentice, Jas Taylor, said: “Can’t quite believe 3aaa has gone into liquidation before I’ve received my certificates for finishing my Level 4.”

Jas (@jas_taylorr) Can’t quite believe 3aaa has gone into liquidation before I’ve received my certificates for finishing my Level 4 😩😩

A DfE spokesperson said: “We have terminated our contracts with 3aaa. Our priority now is to find new training providers as quickly as possible for the affected learners.

“We have put a specialist team in place to identify new providers and help learners with as little disruption as possible. Following our investigation we have referred our findings to the police, through Action Fraud. We will look very carefully at what lessons can be learned as a result of this investigation.”

It is the second time the DfE has investigated alleged wrongdoing at 3aaa. A previous investigation in 2016 by auditing firm KPMG found that 3aaa had been overestimating its apprenticeship success rate.

Marples on Friday resigned as chairman of Spencer Academies Trust, which runs a dozen schools and sixth form colleges across the East Midlands. “The directors of the Spencer Academies Trust have accepted the resignation of Peter Marples as a director and chairman of the board,” a spokesman said.