A "HEAVYWEIGHT" principal, weak auditing and governors who were "not on top of the situation" allowed Halton College, Widnes, to evade financial controls and overclaim nearly pound;14 million over four years, according to the Public Accounts Committee.
The parliamentary watchdog's report, published today, also criticises the "extravagant spending" of former principal, Martin Jenkins, and his deputy, Jenny Dolphin, who ran up bills of more than pound;210,000 on foreign trips.
"The absence of these two senior managers from the college for almost 12 months over five years can only have added to the management problems there," it says.
The college is having to cut 114 jobs to recoup the cash which will cost the taxpayer another pound;1.8m in redundancy packages, the committee says.
Halton's ambitious franchising schemes made it one of the biggest colleges in England in the mid 1990s. However, a whistleblower alerted the Further Education Funding Council and National Audit Office which discovered significant overclaiming of funds, breaches of the college's own financial guidelines and extensive overseas travel by senior staff and governors. As a result, the committee says the college "will need to go through major and painful changes in order to put the core business of the college onto a sound footing".
Jenkins and Dolphin resigned this April on the day the NAO and FEFC published their reports. It was almost a year after the pair were suspended on full pay, costing the college another pound;200,000. The MPs are calling for a review of contracts "which make it too costly to dismiss senior staff".
The report says Halton was "let down" by its auditors, Deloitte and Touche, who performed both internal and external checks. It says it was "deplorable that Deloitte and Touche ... tried to deny the National Audit Office access to information".
Governors, who met only three or four times a year, did not give authorisation for overseas trips and had no control over expenditure. Quizzed by MPs over bills run up by the principal of pound;1,000 for car rental, pound;290 for a night in a Mayfair hotel, and the purchase of etchings costing pound;31,000, former chair of governors David Taylorson said they were totally indefensible and had only come to light as a result of the investigations.
Mr Taylorson told the committee that Jenkins had adopted "a fairly determined and heavyweight approach". He added: "A lot of staff under his control were frightened of saying anything that might have prejudiced their jobs."
The accounts committee says the decision of the board to pay pound;12,000 towards the principal and deputy's legal costs was "extraordinary" and accuses the FEFC and the college of misleading MPs by denying that this was the case.
"This decision ... could have resulted in the college paying for action taken against it and the funding council ... may also have contributed to the delays in the publication of the the funding council's report and in taking disciplinary action against the principal and deputy principal and consequently to the period over which they received full pay while suspended."
But in a statement to The TES, David Melville, the FEFC's chief executive, denied that he had misled the committee. He said: "We responded to a specific question relating to the cost incurred by the principal and deputy principal in seeking injunctions and preparing for judicial review. These costs were borne by the Association of Principals and this was clearly stated. The transcript evidence is absolutely clear."