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College audit firms told to sharpen up

Ministers are cracking down on accountancy firms who fail to spot financial failings in Britain's further education colleges. The Department for Education and Employment has promised a strict new regime after major problems were uncovered at Halton College in Cheshire.

The most senior official, permanent secretary Michael Bichard, told MPs this week that firms will be taken to court if they fall down on the job. Meanwhile, the head of the Further Education Funding Council, David Melville, has told top auditing firms that he expects to see significant improvements.

Appearing before MPs on the public accounts committee to answer questions on Halton College, Mr Bichard said that auditing contracts would be more strictly controlled in future. Deloitte amp; Touche, the internal and external auditors of the college, came in for special censure for having failed to query excessive spending by the former principal and vice-principal, Martin Jenkins and Jenny Dolphin, for more than three years. These included round-the-world trips, luxury hotels, fine wines and the pound;31,000 spent on prints for the principal's office.

Mr Bichard said he would expect colleges to be subject to the same strict controls as those that apply to the civil service. "If I spent a night at the Ritz, I would expect the department's auditor to be on to me within a week," he said.

"Can I make it abundantly clear that the department will expect the Halton governors to seek compensation from the auditors for having failed the college." MPs, however, should not spend too much time blaming the auditors. The problem had been caused by the "disgraceful behaviour" of the principal and vice-principal and a governing body that "was not on top of the situation," he added.

FEFocus, 27

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