Adam Smith College chiefs slammed in audit report

Adam Smith College chiefs have been strongly criticised in a report by the Auditor General for Scotland. Picture: Comp

The findings issued to the Scottish Parliament today revealed “significant failures in corporate governance and financial stewardship” and the late submission of audited accounts.

In particular, the report by Caroline Gardner, auditor general for Scotland, highlighted that the college has had to repay £5.5 million of European Union grants. It has also provided for up to a further £1.2 million in potential repayments of other grants administered by another body.

The report follows allegations of financial misconduct at the college and an investigation into its administration of EU grant funding. A police investigation into claims the college fraudulently claimed European funding is on-going.

The investigation found the college had submitted claims to grant funding bodies which were inaccurate, unsupported by evidence and overstated since at least 2007. Significant irregularities in claims for staff and other costs were also found.

In June the college merged with Carnegie College to form Fife College as part of plans to form “super colleges” in higher education.

A probe into the college began during 2011-2012 after its officials received correspondence under the whistleblowing legislation.

An investigation last year by the Scottish Funding Council (SFC) into bullying was followed by two separate inquiries by KPMG and the Scottish Government.

Dr Craig Thomson, the college’s former principal resigned in March last year a week after he was suspended indefinitely when the SFC launched its investigation.

KPMG findings included the college not adhering to its financial regulations when it hired two companies for a marketing strategy review.

A later investigation carried out by Scottish Government auditors uncovered “significant irregularities”, including the apparent systemic overclaiming of staff time, according to the report.

A spokeswoman for the college said: “Fife College note that the Auditor General has published a section 22 report, which has been laid before parliament along with the annual accounts for Adam Smith College for the year 2011-2012. This is a summation of well publicised and known events at Adam Smith College.

“The report highlights that positive steps were taken by the Board of Governors at Adam Smith College to address the findings of the external audit.

“On the 1st August 2013 Adam Smith College merged with Carnegie College, incorporating parts of the Elmwood campus of SRUC, (Scotland’s Rural College to form the new Fife College.

“The newly appointed Board of Governors and Principal of Fife College are satisfied that appropriate measures were taken by Adam Smith College to address these identified shortcomings.

“Fife College’s key aim is to continue to provide a quality learning and teaching environment for all our staff and students and recognises the importance of continuing to monitor, evaluate and drive forward the recommendations made by Audit Scotland.”

David Torrance, SNP MSP for Kirkcaldy, who called for an inquiry into the running of the college at First Minister’s Questions, welcomed the report’s findings and said he was confident about the college’s future survival.

“The new board and principal, Hugh Logan, are very focused on taking the new college forward. It’s a completely different place now and the college has money in reserve to safeguard its future.

“However, I really think the previous management should be held to account of where all the money was spent.

“The problems were caused by the previous management. Over a hundred staff and students came to my surgery to make complaints which prompted me to take action.”

A spokesman for the EIS teaching union said: “All colleges should be expected to deliver high standards of management and governance to support quality learning and teaching within the further education sector.

“It is right that there is an appropriate level of scrutiny to ensure that college boards and senior managers can properly account for the decisions that they take, given the significant public investment in further education provision.”

• Principal quits Adam Smith college amid bullying claims