Adult courses in Leicester could be slashed following the revelation that a review of adult education in the city - aimed at saving pound;500,000 - has resulted in a pound;3.5 million overspend.
Steven Andrews, Leicester's director of education, has been ordered to stay away from his job while inquiries continue into what have been described as "serious management failures".
Mr Andrews, who earns more than pound;100,000 a year as head of the city council's education department, was suspended along with his lifelong learning director John Crookes. Two more Leicester officers have been told they are being investigated, but have been allowed to remain at work.
All four face the threat of disciplinary measures as the investigation continues.
Mr Andrews and Mr Crookes will receive full pay during their absence.
Leicester City Council has admitted to FE Focus that its budget monitoring procedures failed to protect the pound;15m annual lifelong learning budget. A spokeswoman said: "We have a routine system of monitoring every month, which is reported to members three times a year. The budget monitoring reports didn't reveal the position until March 2005."
An inquiry by accountancy firm Robson Rhodes has established the reasons for the funding crisis. It said the wrong people had been given key roles in the council's "departmental organisational review", which led to the overspend; the proposals had not been costed in detail; and the financial implications of the plans had not been understood. Those appointed to carry out the review did not understand what they were meant to do.
The inquiry report recommended assessing the skills and training of officers on project teams, financial managers and senior management.
The review was carried out under delegated powers, meaning officers did not have to consult elected members. This lack of oversight by councillors should be looked at, said the report.
The council will consider lopping pound;620,000 from its adult education budget for 2005 and pound;721,000 for 2006 to get its books straight.
The estimated overspend is pound;2.3m in a full year. An overspend of Pounds 1.2m in 2004-5 has been paid for from under-spends in the rest of the department.
The council spokeswoman added: "The council regrets the significant failings this report highlights, particularly in the management of the recent organisational review of the lifelong learning and community development division.
"However, this is an isolated incident. This is a problem with budgets and how they are spent, not of impropriety. We are reassured by Robson Rhodes'
report that there are no fundamental problems with our financial and project management protocols.
"The report helps us to identify a number of lessons, principally that we should continue to review our protocols.
"In light of this report, we will review the performance and competence of key departmental managers involved."
Rodney Green, the council's chief executive, said: "It is our normal practice to suspend members of staff during such investigations.
"Suspension does not imply guilt."
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