The recent report of the Comptroller and Auditor General on the education sector provided some interesting reading material, albeit the sort that some colleges might have preferred to file on the top shelf, in the section marked "Things to be Conveniently Forgotten".
The report, which is based on a 1995 audit, is the first such report to publicly reveal certain financial activities in the university sector; the picture it paints is, at times, unflattering. Almost £2 million in research money had to be written off as bad debts up to the end of 1995 due to poor management of research activities; a number of capital projects ended up seriously over-budget, in one case by more than 100 per cent; and activities which were intended as profit-makers or, at the very least, self-funding have turned out to be expensive drains on college finances.
Research proves to be a thorny issue in the report. According to the CAG, the universities wrote off £1 million in research income in recent years and provision had been for the non-recovery of a further £800,000 by September 1995. The report blames inadequate procedures for the approval of new research accounts, the absence of budget and expenditure limits, poor reporting of project income and irregular reviews of balances on research accounts.
The potentially lucrative area of contract research work, through which academics take on research work from outside agencies, also attracts the attention of the CAG. In 1991, the Higher Education Authority advised that 10 per cent of overall contract-research income should be credited to the overhead costs of each university, as an initial step towards the full recovery of costs.
In fact, the percentage recovered was substantially below 10 per cent in all cases. UCG's recovery rate was the highest at 6.12 per cent, DCU's the lowest at 0 per cent. Overall, the percentage recovery rate in 1994-95 across the seven university institutions was only 3.4 per cent, or £1.4 million out of a total research income of £41.2 million.
The report also notes that university staff appear to be reticent about reporting their own private consultancy work, a potentially very lucrative source of income. Under guidelines adopted by the universities, staff must have prior permission from the universities, consultancy work should not be out of proportion to university work in time or remuneration and any university facilities used in connection with consultancy work should be paid for in the form of recovery of overheads incurred on the outside work. The CAG says:
"In the course of the audit for the year ended 30 September 1995, it appeared that, on occasion, consultancy work was being carried out without the sanction of the university. There seemed to be difficulty in implementing the procedures since universities are reliant on the individuals to make full declarations. The level of declarations appears to be abnormally low (my italics) in most cases and in some instances monitoring has lapsed."
Of the universities, UCC merits the greatest number of questionable mentions in the report, much to the annoyance of that institution, although, more positively, it also leads the university field in research income. Among the points raised by the CAG in relation to UCC are:
a centre set up in 1991 under the EU Stride programme was overdrawn by £181,000 by September 1996;
a sociology-linked centre, set up in 1992, had a funding shortfall of £318,000 by September 1996;
a food and science technology extension with a projected cost of £5.67 million eventually cost £6.53 million;
the initial budget for the New Granary Theatre was £450,000 - its final actual cost was £911,000;
the Higher Education Authority refused funding of £1.1 million for an extension to the National Microelectronics Research Centre after it emerged that the college had not followed proper tendering procedures;
Cork University Press incurred costs of £472,000 from 1993 to 1995, raising questions about its future viability;
some £46,000 of the potential income of £127,000 from the Cork University Dental Hospital was deemed uncollectable because the billing system did not have the capacity to send out timely and accurate bills.
In response, UCC said it was now examining the organisational structures of research centres, while its finance committee is reviewing future financial strategy and policy. In respect of the budget overruns, UCC said it had been necessary to undertake additional work in response to the requirements of user departments and to upgrade the college infrastructure in line with the new projects. The design team appointments for the NMRC was made from established lists of experienced firms, said the college, and fee negotiations were in accordance with State procurement standards. It also said the application for HEA funding was an informal one.
The college is considering the findings of a consultants' report on Cork University Press. College authorities told the CAG that, all bills for the dental hospital are pursued, but the college is reluctant to institute legal proceedings in the event of non-payment since it might affect the hospital's ability to attract patients.
Meanwhile, UCG was penalised £375,000 in total by the HEA over the upgrading of 36 senior, administrative and clerical staff without the prior approval of the HEA. TCD was fined £300,000 over the double funding of pension schemes, while questions are also asked about the under-utilisation of space at UCD's Graduate Business School in Blackrock, Co Dublin, which appeared to be 20 per cent below the Belfield average in 1996. UCD argued that it needed more HEA funding to bring the space into use.
Under the Universities Act, the president or provost of each university may be required to give evidence to the Oireachtas Committee of Public Accounts if required.
Outside the university sector, the fallout from the Department of Education investigation into the management of Letterkenny RTC in the early part of the decade continues. A Garda investigation is continuing into irregular payments of almost £13,000 in student maintenance grants. Only £1,299 has been recovered.
An inspector has also been appointed to Donegal VEC over difficulties arising from the establishment, in conjunction with Letterkenny RTC, of a Regional Telecommunications Information Technology Centre in 1988. Some EU funding was received, but in 1996, following an EU audit, the European Commission announced that £165,000 paid to the centre was being disallowed. That year, the affairs of the centre were finalised, leaving a funding shortfall of more than £200,000.
The report also presented an analysis of the unit cost survey, comparing the costs of various degrees in the different universities. The unit cost mechanism was introduced in 1991; the aim, according to the HEA, was to bring about transparent and equitable distribution of resources, to allow greater flexibility to colleges in the management of their internal affairs and to create increased accountability. It caused considerable controversy. Student representatives and academics arguing that it was a costcutting exercise dressed up in a mathematical formula. Or, in the words of the CAG report: "A further objective of the unit costing mechanism was to assist university management to achieve improved internal effectiveness in the use of resources while providing the HEA with an effective monitoring tool."
The unit cost model established an annual cost per student per course, based on recurrent costs, student numbers and contact hours with staff. The HEA used the data as part of its assessment of grant allocations. Based on this unit cost mechanism, the CAG report reveals that - despite arguments from colleges that fees represented only a small fraction of the real cost of educating a student - many students were paying, in fees, most of the cost of their education. The average arts student, for example, cost £2,870 under the unit cost mechanism, and paid fees approaching £2,000. The unit cost for part-time arts and business students was £1,975, compared to £4,407 for a full-time engineering student.
