Ngaio Crequer looks at the background to the controversy surrounding Cricklade College following an investigation by accountants
CONSULTANTS PricewaterhouseCoopers who undertook a secret inquiry into Cricklade College, in Hampshire, faced considerable difficulties.
Some key events had taken place as long ago as 1993. The consultants were dogged by incomplete minutes of meetings, missing statements of spending and a college computer crashing at an "inopportune time".
At the heart of the matter was a bid for European Social Funding. The ESF exists to improve employment opportunities, by providing financial support towards the cost of vocational training.
Cricklade entered into a trading agreement with Extras Ltd, a private IT training provider in Cardiff. The ESF agreed to provide up to 45 per cent of the cost of training from Extras Ltd, with the college meeting the remaining 55 per cent in a "match funding" deal.
The consultants say that the college saw the agreement as a way to make money. It quotes a memo from the director of enterprise in 1993: "If we can run ESF courses on less than funding received - good for us."
The activity with Extras Ltd was substantial. At one time the college agreed to provide over pound;2 million in match funding, yet its total budget was only just over pound;6m. PricewaterhouseCoopers say there was little detailed consideration about this very significant level of activity.
"We can find no evidence that the principal gained assurance that the college had identified the costs related to match funding," they say in their unpublished report.
The principal said he regularly reported to the governors and the finance committee but "this is supported neither by the formal records...nor by our discussions with governors and members of staff."
The direcor of enterprise was the main link between the college and Extras. His reports were "very much biased to the perceived financial gains from the relationship and gave scant attention to the costs and risks associated with the arrangement," according to the report.
To plan to run courses at "less than funding received" does not, according to PricewaterhouseCoopers "meet the requirements of the ESF funding mechanism".
The college had signed certificates for projects "declaring an intention to provide funding to projects which it clearly had no intention of actually providing".
On many occasions, meetings were informed of the income the college might receive, with no reference to any costs being incurred.
The principal, Richard Evans, regularly signed certificates declaring the college had provided match funding "for which there is now no supporting evidence available".
The director of finance should have checked that the figures were robust and dependable. "There is no evidence to suggest that this assurance was gained or, indeed, could have been gained."
The verification and audit section of the Department for Education and Employment visited Cricklade in 1996 to investigate its role with Extras. The principal agreed to follow up tasks set, and provide information. "There is no evidence" to suggest this happened, or that the department followed up its request, the report said.
The director of enterprise and director of finance took early retirement on enhanced terms in August 1996 and August 1997 respectively.
The principal, after more than a year's suspension on full pay, was dismissed last July. College governors said they were satisfied he was acting in what he saw as the best interests of the college but his actions "had brought the college into disrepute".