Ms Colette Drinan:

The financial statements before the committee this morning relate to Waterford Institute of Technology’s financial year ending 31 August 2014. The institute’s consolidated income for the year amounted to over €99 million. As seen in the graphic in the submission, State grant funding of €28 million accounted for more than a quarter of that total. Tuition fee income of nearly €31 million included fees of €7.4 million paid by the State and student contribution income of over €15 million. In addition, research grant income of €19.5 million was recognised in the year.

Expenditure in the year was nearly €96 million. Of that, around 68% was accounted for by staff costs. A detailed analysis of expenditure is given in note 11 of the accounts.

While the consolidated accounts show an operating surplus of €3.7 million for the year, the audit certificate notes that the group had an accumulated deficit of over €15 million at 31 August 2014. The institute addresses the question of the group’s financial position in note 24, and concludes that it remained appropriate at the date of signing to prepare the financial statements on a going concern basis.

In regard to the institute’s financial position, the accumulated deficit prior to the consolidation of the subsidiaries was €3.3 million. After consolidation and taking into account the current year surplus, the deficit is now over €15 million at 31 August 2014, as outlined in note 19 to the financial statements.

The Comptroller and Auditor General issued a qualified audit opinion in respect of the financial statements, arising from the failure of the institute to include comparative information for the prior year in its consolidated income and expenditure account for 2013-14.

The institute’s subsidiaries were incorporated into the financial statements for the first time in 2013-14. Note 19 explains that prior year comparatives were not available because the subsidiaries’ financial statements for 2012-13 covered a 14-month period. The relevant accounting standard provides that, in such cases, amounts for the prior year should be adjusted, with the basis for adjustment disclosed. Accordingly, the audit concluded that it would have been appropriate for the institute to include adjusted comparable figures for 2012-13.

The governance code for institutes of technology provides that audit committees should submit an annual report on their activities to an institution’s governing body. The audit certificate also draws attention to the fact that the audit committee in Waterford IT did not issue an annual report for 2013-14 to the governing body until June 2015.

The Comptroller and Auditor General’s recent special report on financial reporting in the public sector identified Waterford IT as the only institute of technology that had not completed its financial reporting for 2013-14 by the end of 2015; that audit was subsequently certified in October 2016. In terms of the 2014-15 audit cycle, Waterford IT is now the only institute of technology for which the audit has not been completed.