Police have launched a criminal investigation into allegations of fraud at the UK’s largest government-funded apprenticeship provider.

Derbyshire constabulary said its specialist fraud investigation unit has begun a formal fraud investigation into the collapse of 3aaa, which was training 4,216 apprentices at companies including Ocado, Volkswagen and the National Grid.

“A formal criminal investigation has been launched into 3aaa,” a police spokesman said. “This follows a number of allegations of fraud that have been made by the Department for Education against the firm. Officers from Derbyshire constabulary’s specialist fraud investigation team will now begin the process of making formal inquiries into these allegations.”

The firm, which received £31m of government money last year, was placed into compulsory liquidation in October 2018 after the DfE withdrew all funding following allegations of fraud.

More than half of the apprentices being trained by 3aaa – which stands for aspire, achieve and advance – have been left in limbo by the collapse. Almost 2,000 of the 4,216 apprentices have been moved to new providers.

Can’t quite believe 3aaa has gone into liquidation before I’ve received my certificates for finishing my Level 4 😩😩 — Jas (@jas_taylorr) October 12, 2018

The founders of 3aaa, Peter Marples and Di McEvoy-Robinson, resigned as directors of the company shortly before its collapse last year.

Separate to the fraud allegations, an investigation by the Guardian and the higher education journal FE Week revealed that 3aaa had spent £1.6m of its mostly government-funded income on professional sports sponsorship.

The money was spent on sponsorship between 2015-18, despite the firm making a £2.8m pre-tax losses in the 18 months to January 2018, according to unpublished company accounts.

It 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 Marples and 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-Robinson are seen in the club’s team photo.

There is no suggestion that the sports sponsorship deals form part of the police fraud investigation.

A DfE spokesperson said: “As a criminal investigation is now under way, it would be inappropriate to comment further at this time.”

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