Dr. Brendan Murphy:

I thank the committee for its invitation to attend this meeting on the financial statements of Cork Institute of Technology for 2014. CIT is one of the largest, most progressive and most successful institutes of technology in the country, with 11,000 higher education students, approximately 3,000 craft and junior music students and a staff of 1,400. It operates on four major sites in Cork city and county. CIT is institute of technology of the year for 2016, our third time in the past decade, and in partnership with IT Tralee, it has successfully completed three of the four stages of technological university designation.

The quality of CIT's education programmes and research are overseen by Quality and Qualifications Ireland, QQI, and its governance is provided by its governing body and through its three committees, namely, audit, finance and strategic development.

It operates under the Institutes of Technology Acts 1992 to 2006 and the Higher Education Authority has a regulatory oversight of CIT. Higher education in Ireland has been operating in a challenging financial environment since 2008 with a significant increase in higher education student numbers, reduced staff numbers and reduced State funding. Even though CIT continued to be successful in this period, it is not immune to these financial challenges, as may be seen in our 2014 financial statements. We anticipate no immediate improvement in our financial situation in 2015 with a continuing reduction in State funding, increasing pay costs and a continuing need to dip into our relatively small reserves for essential maintenance and health and safety works.

The results of the Comptroller and Auditor General audit in 2014 complements the result of our internal audit reports. Any issues raised in these audit reports are carefully considered by the governing body, its audit committee and the executive. They are then followed up and corrected. Controls are strengthened and they are monitored by the audit committee. As in any institution, mistakes are made, but they are corrected. Overall, we have a culture of improvement.

It is against this background of a progressive and well-governed higher education institution that one should set the anonymous letter allegations received by CIT from the Comptroller and Auditor General in mid-May 2014 and on Christmas Eve 2014.

In the first anonymous letter a total of 175 allegations were made. Many of these were grossly defamatory on the face of it. The anonymous letter was referred by the chairman of the governing body to the audit committee, which was authorised by the governing body to obtain independent legal advice. Based on this advice and with the agreement of the governing body, the audit committee, via the independent legal advisers, Arthur Cox, tendered for and engaged KPMG to carry out an independent review of the allegations. In the second anonymous letter a further 21 allegations were made. Again, many of these appear to be grossly defamatory and all were considered by the audit committee of CIT. The audit committee engaged KPMG to carry out a further independent review. I will set out a summary of the outcome of the KPMG independent review. Of a total of 196 allegations a total of 35 were deemed to have insufficient evidence to allow further review, 102 were deemed to require no further action because the allegations had been adequately addressed by the institute and 59 were deemed repetitious to other allegations and required no further action.

The governing body received updates from the audit committee during the process. A final report issued from the audit committee and was considered by the governing body at its meeting of 26 March 2015. It concluded that after two intensive external investigations all individuals and agencies identified within the letters had carried out their professional duties highly diligently and with total integrity. The governing body concluded that no further response or action was required from the institute's executive. A full copy of the audit committee's final report to the governing body and the KPMG reports have been provided to the HEA, the Department of Education and Skills and the Comptroller and Auditor General. The chair of the governing body has also provided the HEA with a full written account of the processes undertaken to address the matter.

CIT notes the concerns expressed by the Chairman of the committee in respect of the redacted KPMG report. CIT wishes to state that no slight to the committee was intended at any stage. CIT also respectfully notes that the committee has not made a direct request of CIT for the KPMG report.

CIT has a duty of care to protect the reputation of the institute, its employees and other organisations identified in the anonymous letters. It has received legal advice on its obligations. Given the concerns over the high level of personal information and entirely unfounded nature of the allegations contained in these reports CIT decided that all references to individuals, titles or organisations be redacted. Any other detail of a confidential or sensitive nature that may have led to damage to the individuals or organisations or that may have served to identify same were also redacted. The purpose of the provision of the redacted version of the reports was to provide documentary evidence that a full, comprehensive and independent investigation had been undertaken while also protecting the identities and reputations of those falsely accused.

The direct cost of the legal advice and investigation has amounted to some €65,000, with a significant internal cost as well. In recent days, the committee has requested other documentation relating to the KPMG reports as well as the cost of the due diligence exercise carried out for our Munster technological university stage 2 application. These have been supplied. The committee has also requested the minutes of the audit committee of the governing body since 2010 and the minutes of the CIT safety committee since 2010. These have also been supplied. As requested, we have also supplied a note recently relating to CIT cleaning staff and their sick pay. We remain at the disposal of the committee to answer any questions that members may have on these and other matters. Thank you, Chairman.