Mr. Tom Boland:

That was in 2011. It was immediately after the freedom of information request, which was submitted in March. On 17 May 2011 we wrote to Waterford Institute of Technology asking for details of the situation. The institute reported to us in July and we found the report to be unsatisfactory. We had asked WIT for details relating to several questions. We asked whether any of the expenditure was used for purposes other than that of the institute; whether any of the expenditure fell outside normal processes for expenditure control, including tendering; whether, if any such expenditure did occur, the system of financial control and review in the institute allowed such expenditure to occur; about the specific controls in place in respect of expenditure incurred by the office of the president; whether any appropriate measures have been taken to improve systems of internal control; and about other actions that the governing body proposed to take in this matter.

We received a report, often referred to as the first Deloitte report, in response to these issues. We took the view that the report did not deal with a range of issues in sufficient detail. As a result of several meetings and telephone conversations with the authorities in the institute a second report was commissioned and, I understand, is more or less complete now but its publication has been delayed for legal reasons. However, we have asked the institution to press forward with the publication of the report and with making that report available to the HEA and the Department unless there are specific legal reasons why this cannot be done. We moved quickly to establish the nature and extent of the problem. In particular we were keen to ensure that the institute moved rapidly towards putting in place the type of controls, specifically in respect of the office of president, which were necessary. On that point we sought to respond reasonably quickly.

The question the chairman raised about what the HEA did and why this happened or was allowed to happen over ten years is a little more difficult to answer, but I do not mean that in an evasive way. The HEA is part of a system of accountability and control in respect of public funding and expenditure in the higher education system. The system includes the institutions and the chief officer and the governing bodies have specific functions under legislation. The system includes a code of governance and deals with issues relating to internal audit committees and the way in which these committees interact with the governing body of the institutes to ensure an accountability culture in each of the institutes. It is at this level that the detail of issues arise in respect of accountability. The Higher Education Authority has a significant role to ensure appropriate procedures and processes are in place in institutions and that they work. It keeps the situation under review and develops alternative solutions when and if difficulties are identified. The HEA has put in place a code of governance for the institutes and the universities which is altogether consistent with the code of governance for State agencies. We review the accounts of the institutions on an annual basis and there are a range of other audits and account reviews that takes place. Apart from the institutional responsibilities and those of the HEA there are responsibilities for the Comptroller and Auditor General and this committee.

Given our mandate and resources, amounting to some 58 staff, it is not practical for the HEA, to be able to interrogate the detail of the accounts of institutions. That is, properly, a function of the chief officer, who is the accountable person, and the governing body along with their combined internal control procedures. It would be wrong for the HEA to try to take to itself the capacity to do that work. The HEA would be unable to do it and we would be taking on a responsibility that ultimately we could not deliver on. Further, we would be absolving the institutions and the management of the institutions from their statutory and fiduciary responsibilities for the moneys they receive.

One objective of the HEA is to create a climate of accountability in the institutions whereby they understand that they are accountable first and foremost. It is not possible for an agency such as the HEA to surface the type of detail that arose in this case. However, it is possible and it is our responsibility when the need arises to act as quickly as possible to ensure that whatever required systems reforms are carried out.