A circular from the province's Department for Employment and Learning (DEL) shows that 16 FE institutions had reserves of around pound;32.7 million, with a further pound;36m in bank accounts. Natfhe condemns what it calls "hoarding".
"This is public-sector money," a spokesman said. "It has been provided by government for the delivery of education services and should be used for that purpose. Such hoarding is contrary to the public good. Current policy allows colleges to build up vast reserves - mostly at the cost of dismissing full-time teachers and reducing provision when class sizes fall below 15 or 16."
The DEL is also concerned. "This may indicate some funds are being set aside unnecessarily rather than being used to further the mission of the college and enhance the student's learning experience," it says in a circular reviewing college accounts.
According to its criteria for solvency - assessing a college's assets against liabilities - Newry and Kilkeel Institute, with almost pound;15m in reserves and in the bank, is more than four times better off than it need be. But principal Raymond Mullan denies hoarding. "We have good staff, run good programmes, and work bloody hard," he said. "The college has grown more than 300 per cent in the past 10 years. Forty per cent of our income comes from outside DEL core funding, the highest of any college. We do a lot of work with companies, a lot of training and run responsive short courses. That's what incorporation is about.
"We'll be spending about pound;9m over the next three years. Currently we're spending approaching pound;4m on a new block that includes a library and IT centre. We've also just taken on 20 new teaching and sports staff."
Natfhe, however, claims that most new money coming into FE since 1998 has been soaked up by "empire-building" while full-time lecturers have dropped from 2,381 in 1990-91 to 1,770 in 2002-03.
The union's comments are part of its detailed response to DEL's strategy document for FE, Further Education Means Business for People, Communities and the Economy in Northern Ireland. It welcomes a statement of intent to establish "a common purpose for the sector and a new set of strategic partnerships to help colleges deal more effectively and build partnerships".
But Natfhe fears more mergers and job losses. The union also calls for the reform of governing bodies. It feels they are "unrepresentative of the communities they serve". "They are dominated by elderly white males, and cronyism appears to be the main rationale in the filling of sub-committee positions," it says.