College finances attacked by MPs

THE COMBINATION of a strong-willed principal, poor financial controls and weak governors led a further education college to overclaim pounds 14m of taxpayers' money, a parliamentary inquiry has found.

In a report published today the Commons Public Accounts Committee described as a "horror story" the mismanagement and junketing at Halton College, near Merseyside. The MPs found it wasted pounds 1.8m of grants and 114 staff had to be made redundant, while its principal and his deputy spent pounds 200,000 on overseas trips.

The committee welcomed the Government's recent crackdown on irregularities at colleges across the country, but attacked the Further Education Funding Council and Halton's governors for failing to monitor the situation.

Similar weaknesses in financial controls were found at six other further education colleges, raising the possibility that the problem was widespread among Britain's 435 FE colleges.

As pounds 3bn a year is spent on FE, the MPs said they were disturbed by research which suggested poor controls existed in 60 per cent of all colleges.

In today's report the committee said it was "deeply concerned" at the extravagant spending on foreign trips by the principal and his deputy.

It was also "astonished" that the governors themselves made trips to Kansas and Miami to enable them to "meet staff".

The scandal spread over the past five years, but both the principal and his deputy were eventually suspended only in 1998 and it took a year before any action was taken against them. During that time the pair continued to receive full pay totalling more than pounds 200,000.

From April this year all colleges have had to disclose foreign spending in their annual accounts and are no longer compelled to pay any staff who are suspended.