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Revamp blamed for pound;7m shortfall;FE Focus

THE largest FE college in Wales was plunged into a financial crisis by a restructuring exercise, a two-year investigation by the National Audit Office has found.

The 70-page report on Gwent Tertiary College says a lack of planning, poor monitoring and "often misleading" financial information led to a deficit of nearly pound;7 million being run up in a year.

A plan to increase the number of college managers from 56 to 118 cost pound;1.4m - four times the original estimate.

The report says that former principal Sue Parker, who began restructuring soon after being appointed in September 1995, did not consult the governing body over the changes. She resigned in July 1997, after being suspended with a pound;42,000 pay-off.

The college's training shop, which ran courses for disadvantaged groups with European Union funding, operated outside the college's strategic planning and control procedures, the report found.

Staff used credit cards to run up thousands of pounds of unaccounted expenditure on overseas trips and there were potential conflicts of interest involving a manager seconded to the shop from the local council and her son, who was employed to drive its mobile computer van. Gwent police are currently investigating the European Social Fund payments to the college.

Peter Hain, Welsh Office education minister, said: "It was disgraceful that any college should allow itself to get into such a sorry state. But when that college is Gwent Tertiary College, by far the largest and most prestigious in Wales, then it is intolerable."

Under new principal, David Mason, the college's deficit has fallen to around pound;1m, although the report notes it still faces "considerable financial challenges". All but two of the college's governors and senior managers have been replaced in the past two years.

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