Yes, I would report it!
I have seen an awful act happening last month with fund money being used by committees to pick and choose who they want employed and having other idiots go for interview with jobs already given out. FACT! These people must think the state is a joke! Lets kid the funders and advertise the jobs, and waste peoples time that are badly in need of work and then let them down! I was not one of these people but was told about the procedure from a manager on one of these courses.
Yes, report any dodgy findings.