The Further Education Funding Council launched an inquiry into the running of Halton College in Widnes, Cheshire, after reports of serious irregularities in its management.
External auditors Robson Rhodes were presenting the findings of their investigation into allegations that the college claimed FEFC cash once courses had finished, and used public money to set up private companies, finance senior managers' foreign trips and to refurbish the principal's office.
The TES has seen FEFC documents cataloguing alleged malpractices at the college which were the subject of preliminary investigations by the funding council and external auditors last week.
As The TES went to press the FEFC was seeking an urgent meeting with the board of governors. The board - which refused to suspend principal Martin Jenkins and deputy principal Jenny Dolphin last week despite a request from the funding council - will also face questions about the links between the business interests of several governors and supply contracts with the college.
Mr Jenkins, the highest-paid manager in further education, has turned Halton college into the biggest provider of franchised courses in the sector, enrolling students around the world. But his style of management was criticised by an industrial tribunal in March which ruled that a long-serving member of staff had been unfairly dismissed and said there was a culture of "anti-unionism" at the college.
Leader, page 16 FE Focus, page 31