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PRESS RELEASE

2 July 2009

PAC/13/08/09

FURTHER EDUCATION COLLEGES HOLD £44 MILLION OF SURPLUS FUNDS

Six new regional Further Education Colleges (FECs) are holding £44 million in cash surpluses—more than twice the amount allowed under current public sector guidelines. That’s a shock finding from the report on the review of financial management in the further education sector in Northern Ireland, published today by the Northern Ireland Assembly’s Public Accounts Committee.

Speaking at the launch of the report, Paul Maskey MLA, Chairperson of the Committee, said : “The Committee was extremely concerned to learn that the Department and colleges have allowed such a significant amount of money to lie idle in bank accounts.

“Further education plays a crucial part in the education process, providing a link between schools and universities. It plays a significant role in increasing the employability of students of all levels of ability. Its importance cannot be overstated in these difficult economic times.

“It has been a longstanding and sound principle of public finance that public bodies should not hold more cash than they need. In this sector, these surpluses should be used to develop the skills of students. If there is no current need for this cash in further education, then it should be transferred to other areas requiring additional funding in the public sector .”

The Committee’s report focused particularly on serious failings in financial management and concerns over the regularity and propriety in the use of public funds, which were identified in the pre-reorganisation Fermanagh College. A series of nine reports on the College identified fundamental breaches of public accountability and basic financial management standards. As a result, the college was required to repay more than £1 million of improperly claimed funding.

Speaking about Fermanagh College, Mr Maskey said: “The Committee was astonished at the level of failure in Fermanagh College. We found that one of the underlying problems was that the senior management team did not have the necessary leadership and management skills to deal appropriately with the problems at the college. The senior management team was dealing with a budget of about £10 million, yet there was no clear leadership or sense of strategic direction at the college. These issues were raised in 1999 yet were not sufficiently remedied in subsequent years.

“What is even more disturbing is that lessons seem not to have been learned by the Department. In the new Belfast Metropolitan College, there are continuing financial problems and the Department for Employment and Learning was unable to give even a basic explanation of what has gone wrong.

“We are alarmed that, despite the Department’s claims about stronger governance arrangements for the six new colleges, the same problems are recurring.

“This situation should and must be resolved.”

ENDS.
Notes to Editor:
  1. The 16 Further Education Colleges were reorganised into six new Regional Colleges on 1 August 2007.
  2. Fermanagh College was one of the 16 former colleges and was merged with East Tyrone and Omagh to form the new South West College.
  3. In 1999 t he Comptroller and Auditor General produced a report in 1999 drawing attention to cases of incompetence, impropriety and serious financial mismanagement that had been found in further education colleges in Great Britain. The Committee found that many of the failings also applied to Fermanagh College.
  4. Some of the issues identified in respect of Fermanagh College included procurement activity. In one case £2.5 million of maintenance expenditure had been awarded to one local building firm over a five year period without following basic procurement procedures and which were not supported by adequate supporting documentation.
  5. Standing Orders under Section 60(3) of the Northern Ireland Act 1998 have provided for the establishment of the Public Accounts Committee (the Committee). The main statutory function of the Committee is to consider accounts and the reports by the Comptroller and Auditor General for Northern Ireland (C&AG) laid before the Northern Ireland Assembly.
  6. The C&AG is head of the Northern Ireland Audit Office (NIAO) and is empowered to investigate any area of expenditure and has a statutory right of access to all files and papers in Departments and public bodies.

The PAC Committee members are:-

Alliance

Mr Trevor Lunn

Democratic Unionist Party

Mr Jim Shannon 6

Mr Jonathan Craig

Mr George Robinson 7

Mr Jim Wells 3,4,5

Sinn Fein

Mr Paul Maskey (Chairperson) 2

Mr Mitchel McLaughlin

Social Democratic and Labour Party

Mr John Dallat
Mr Patsy McGlone 1,8

Ulster Unionist Party

Mr Roy Beggs (Deputy Chairperson)

Progressive Unionist Party

Ms Dawn Purvis

1 With effect from 04 March 2008 Mr Thomas Burns replaced Mr Patsy McGlone.
2 With effect from 20 May 2008 Mr Paul Maskey replaced Mr John O'Dowd.
3 With effect from 1 October 2007 Mr Mickey Brady replaced Mr Willie Clarke.
4 With effect from 21 January 2008 Mr Ian McCrea replaced Mr Mickey Brady.
5 With effect from Tuesday 27 May 08 Mr Jim Wells replaced Mr Ian McCrea.
6 With effect from Monday 15 September 08 Mr Jim Shannon replaced Mr David Hilditch.
7 With effect from Monday 15 September 08 Mr George Robinson replaced Mr Simon Hamilton.
8 With effect from Monday 29 June 09 Mr Patsy McGlone replaced Mr Thomas Burns.

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Northern Ireland Assembly
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Email: debra.savage@niassembly.gov.uk
Website archive.niassembly.gov.uk