Helen Liddell, the Education Minister, announced the review in the Commons on Tuesday. It will be the first task to be carried out by the Scottish Further Education Funding Council, which is to take up office from April.
Mrs Liddell said she had to be convinced college managements were on a sound footing before they spent the Government's extra Pounds 214 million. The inquiry was intended to "promote best practice in college management," she said.
Her formal statement did not refer to the industrial relations problems which have been plaguing colleges since incorporation. But in an exchange with Maria Fyfe, the Labour MP for Glasgow Maryhill, Mrs Liddell commented:
"There is a mixed message across Scotland about the impact of localised bargaining.
"I have no doubt that is a matter the review will be able to look at."
There are no signs that the Government wants to see a restoration of FE national bargaining, to which the employers represented by the Association of Scottish Colleges are adamantly opposed. But the Educational Institute of Scotland confirmed it would be using the review to press for its return.
The TES Scotland understands, however, that FE leaders could be on the verge of committing themselves to a "protocol of understanding" with the unions. This would not establish a detailed national negotiating framework but would be a signal of what constitutes best practice in industrial relations.
The EIS has already floated the idea of limited collective bargaining with groups of colleges.
Joyce Johnston, the principal of Fife College who chairs the FE principals' forum, part of the ASC, was relaxed about a review.
"We have a reliable record as a can-do sector, delivering good value for money."