Oireachtas Joint and Select Committees
Thursday, 24 September 2015
Public Accounts Committee
Technological University for the South East: Report
Mr. Michael Kelly:
I thank the committee for the opportunity to discuss this project. I regard the technological university for the south east, TUSE, project as being of enormous significance for the future economic and social development of the south east region. As such, I appreciate this opportunity.
As referred to by the Secretary General earlier, I was asked by the Minister for Education and Skills to lead this process, engaging with a broad range of stakeholders within the two institutes of technology in Carlow and Waterford and more generally across the south east region. Consistent with the terms of reference, the process focused on the development of a shared vision for the new technological university and identification of the practical steps required to bring it about within an acceptable timeframe. I had the full co-operation, including administrative and logistical support, of both institutes and allocated a large proportion of my own working time to the project over the first half of 2015. I also, of course, had the full support of the Department and the Higher Education Authority, for which I wish to express my thanks.
Through the engagement I had with the many groups and individuals I met during the course of the project I learnt a great deal more about the challenges faced by the south east region and the potential of a new technological university to help address these challenges. I was in a position to bring my experience from the Dublin consortium to bear on the project and my intention was to assess the overall rationale and viability of the TUSE in the first instance and to then map the practical steps I believed necessary to deliver it. History will judge the accuracy of my assessment, but it is a source of some satisfaction that both institutes agreed to enter into the preliminary facilitation process I had recommended as a first step. Based on my knowledge of both institutes, I have every confidence that with strong positive leadership they can surmount the challenges to be faced in agreeing a shared vision for the new institution, in developing a unified implementation plan and in taking the steps necessary to achieve TU designation within a timeframe that is broadly acceptable to the community across the south east.
I am conscious that the report I prepared has been circulated to the committee and I will not dwell on its detailed content. Rather, I believe there would be greater benefit in speaking about some of the issues that hindered progress in earlier phases and some of the critical success factors, as I see them, in ensuring a successful outcome for complex organisational development projects of this nature. Any views I express are entirely my own. The pathway to designation as a technological university is deliberately demanding of applicant institutes. This is justified on the grounds of clearly differentiating the new technological universities from existing institutes of technology and in protecting the Irish university brand internationally. However, it imposes an additional set of pressures on the applicant institutes at every level and I believe there needs to be a greater willingness to support the additional activities involved and to recognise the complexities and additional workloads required. In saying this, I am conscious that the Department and HEA are faced with many competing priorities and that the overall level of investment is of necessity limited.
Beyond this general point, the process of preparing the stage 2 business plan in the south east was complicated by a series of interruptions due to external factors, which made it difficult to develop and maintain momentum. Some of the issues involved, relating to financial governance in Waterford Institute of Technology, WIT, also hardened attitudes around the need for robust due diligence exercises. None of this was helpful in generating a mood of mutual trust, respect and confidence, which is the only foundation on which to build a truly committed collaborative venture. More specifically, in paragraph 3.3 of my report I identify a number of learning points from the earlier phases of the south east project. These should be brought to bear in thinking out the next stages and may also have wider application elsewhere. They can be summarised as follows: the focus must be on an entirely new institution, offering to the region a new level of capability and regional reach rather than any extrapolation of existing institutes and offerings; the partners must find ways to rebuild mutual trust and respect as the basis for equality of esteem; they need to agree a shared vision and a framework which ensures all relevant issues are bottomed out and processed to an agreed conclusion; they need to acknowledge the value of diversity, building on their respective strengths while remaining open to new opportunities across the region; the project will need to be proactively supported financially, starting with the change management processes involved; and the framework adopted should make the needs and expectations of regional stakeholders central to the design and implementation processes.
Later in the report, in chapter 7, I have identified a number of enabling and supportive measures which I believe can improve the prospects of success. The backdrop to this section of the report is the evidence presented in a European University Association report on merger and concentration processes in European countries over the past 15 years. That report is clear on a number of key findings: the wider benefits include increased quality, realisation of economic gains, system consolidation, strengthening of institutional positioning and geographic drivers; the transition period for newly merged institutions requires considerable set-up investment if the expected dividend in quality of outcomes is to be realised; and the pay-back period can be extensive.
Applying these principles in the Irish context, the primary goal must be to achieve a step-change in quality and outcomes, from what could be achieved by institutes of technology at a given level of investment to what should be achieved by technological universities benchmarked against the best internationally. The policy framework rightly places emphasis on the achievement of demanding academic and institutional criteria. The full value of doing so is unlikely to be realised if we do not match our quality aspirations with the level of set-up investment required and adjust the funding model for technological universities, TUs, based on a rigorous evaluation of their funding needs. I would expect that there will be an opportunity for an informed dialogue between the various TU consortia and the HEA on these and related issues in due course.
Of course, the merging of institutions and the synergies from combining resources and capabilities will also present opportunities for efficiency gain and stronger capacity for generating new income streams. These will need to be fully exploited in concentrating resources on the quality of the student experience, research excellence and other aspects of institutional mission in these new institutions. This will also form a natural part of the dialogue on a new funding model for TUs. While this entire discussion goes a little beyond my brief, which concerns the technological university for the south east, TUSE, I have taken the liberty of addressing the issue and have been clear in the report that this is the backdrop against which my recommendations were made.
The enabling and supportive measures I have proposed include: supportive structures, which are concerned with an appropriately constituted, independently chaired steering group; a joint project team combining skill sets from both institutes; and a new feature in the form of a regional stakeholder forum, which reflects the significance of the TUSE in addressing the real needs and expectations of the entire community in the south east. The proposed measures also include support for facilitation and change management. This would build on work already done and should involve a cross-campus, bottom-up engagement process across both institutes on the design of every facet of the new institution. Also included are institution support and acceleration measures. While these are not identified specifically, the case is made that, in a context where both institutes are constructively engaged on the design and execution of TUSE, sympathetic consideration should be given to further measures which would address potential obstacles or accelerate progress towards meeting designation criteria within an acceptable timeframe. Finally, the point has already been made that if we want to realise the full value of developing the TU model in Ireland, we will need to rigorously assess its real funding needs.
If I could summarise, there is a strong policy rationale and business case for proceeding with the TUSE project, based primarily on the needs of the south east region. The project is feasible. With a fair wind, the necessary planning and preparation should be achievable within three years, subject to validation of aggregate data on TU designation metrics and a total commitment by both institutes to get on with it I have outlined the practical steps required. Both institutes are already engaged in the first step recommended, through their ongoing participation in the current facilitation process.
I will be happy to address any questions within the limits of my competence.
I welcome Mr. Kelly back to the committee. I will start where he left off. The overriding point he makes in his report is that he gives affirmation and validation to the concept. He makes that very clear when it comes to policy and when he looks at the business model. Universally, people who have read the report would say it is a necessary step to restart this process. I think it has worked. That is all positive and good.
I think people in Waterford and the south east would probably expect me to ask what has happened since the report has been published and presented to both institutes. Maybe it is also a question for the HEA and the Department.
Mr. Michael Kelly:
I certainly think others can comment on that, but I will provide an initial response to the Deputy. Based on my close contact with both institutes over quite a protracted period earlier in the year, I am confident there is a strong belief in both academic communities, and indeed among the staff more generally, in the concept of a technological university and in the value of doing that in the south east. Both institutes prepared very ambitious and well-informed vision statements setting out their stalls, as it were, as to how the TU might materialise. Alongside that, there were also indications of real stresses in relationships between the two institutes at many levels. There is a very strong rationale, therefore, for recommending a preliminary facilitation process in order to ventilate some of those problems from the past, to try and deal with them, to get them out of the way and to get on with the substantive business. A very strong recommendation in my report was that nothing substantive should commence before going through that preliminary stage in a serious way. My understanding - although the Department may be able to amplify this - is that the process is under way. I have no reason to believe it is not successfully grappling with the issues that should be addressed.
Mr. Seán Ó Foghlú:
I thank the Deputy. The Minister met with Mr. Kelly on 2 July and talked through the report with him. Prior to publishing the report she met with the chairs and presidents of the two institutions. That was on 21 July and the report was published on 27 July. As was outlined at the time, it was agreed that a project plan for a process of facilitation would be developed for the consideration of the two governing bodies at the end of August, and that happened and was agreed upon. The facilitation process is now under way. A facilitator has been engaged and the initial meetings have taken place. The feedback we have got has been that there is good engagement at those meetings.
Can Mr. Ó Foghlú outline the specifics involved? How many meetings are there and who are they with? Mr. Kelly made some very specific recommendations and points with regard to why this failed and what needed to happen.
Mr. Seán Ó Foghlú:
Again, there is a facilitation under way to bring the two of them together. There have been meetings at senior level between the two institutions. I happen to know there have been meetings with the chairs and presidents but we are not aware of any more detail other than that those initial meetings have taken place. The aim is to complete an initial phase of that facilitation so that it can move to actual co-operation towards building towards the next stage.
That is fine. I think Mr. Ó Foghlú will understand where I am coming from when I ask the questions. This stems from the view which Mr. Kelly has in his report, that this could be completed within three years. That is critical for people looking in from the outside because of how long, laborious and painful the process has been up to this point. When I ask these questions, it is important the parties concerned understand that there is keen and constant oversight of this process from day one by the Department.
What we have seen in the past ten, 12 or 14 years in which I have been a Deputy are lapses with regard to governance, not just in Waterford Institute of Technology - we can talk about those - but also in Dublin. It is just critical that there is this kind of constant attention. We will get to the financial side of this in a moment. Will the witness explain to the committee what he perceives to be his role as this process begins? Is it just about receiving the odd telephone call from the people involved saying that everything is grand and that meetings are taking place or is there somebody in the Department constantly checking to see how this process is evolving and whether Mr. Kelly's recommendations are being followed through?
Mr. Seán Ó Foghlú:
We have somebody in the Department who is constantly checking this but it is the responsibility of the institutions. We have engaged the facilitator and we engaged Mr. Kelly, so we are the engager of the facilitation. We are taking that role and engaging facilitation. We are getting informal feedback on a constant basis from both parties and the facilitator.
That is fair enough. As far as the Higher Education Authority, HEA, is concerned, there are a couple of roles. It adjudicates in the process to a certain extent but it is a facilitator. Does Mr. Boland have any comment with regard to that initial process that has been set up and how he sees the authority's role in this? The Department has explained that it has somebody on point who is facilitating in this instance and reporting back from both institutions. Will Mr. Boland explain the authority's ongoing role in this new process?
Mr. Tom Boland:
We welcome the new process. There is a sense in the HEA that, in a way, this project was not given a full chance on its first outing and this is an opportunity to put it back on track, as has been said. As a process, that is very valuable. The building of trust between the institutions at leadership level and more widely is absolutely crucial to a successful outcome and the institutions want the successful outcome of a technological university in due course. For the reasons mentioned by the Deputy, we are the ultimate adjudicator of the process so I do not want to say anything to predict the outcome. Our interest is to see this project progress well in the interests, first, of the region, as the case has been well made for the social and economic benefit that would come from technological university there, but also in the interest of the institutes. As two very strong institutes serving their region, they cannot put resources and time on a very long-term basis into a project that will not succeed. Our wish is that there should be a fair wind behind the project.
We will be supportive, as we have been supportive with the other consortia. The Deputy mentioned that he may want to discuss finance. There is some limited - I stress that word - capacity for the HEA to provide a certain amount of funding to support the institutions as they do their planning. We had made some funding available before but that had to be paused when the process was paused. Overall, we welcome Mr. Kelly's report and, as a very constructive first step, the facilitation process. We are very positively disposed to an early positive outcome. With regard to the Deputy's other question, I assure him that we will keep in regular contact with the institutes at leadership level on what is happening exactly.
I thank Mr. Boland. Having served as a member of this committee for the past four years or so, I know we have received continual assurances that everything that could be done was being done from the HEA's standpoint, as well as that of the Department of Education and Skills. Nevertheless, the process collapsed and we are back here again. I suppose this is a question for Mr. Kelly. Notwithstanding the fact that everyone agrees with his analysis on cause and his recommendations, is there a utility for a check in the system as it goes along to see if the process is working and those recommendations are being implemented properly? That is where the problem is and has been in the past. This was abruptly ended by an e-mail in October 2014 from WIT which indicated that was it, it was done. My difficulty is I deal with officials in the HEA and the Department of Education and Skills who are trying to do their job but, frankly, the process did not work because they did not know what was going on. Mr. Kelly repeatedly makes the point in his report that while people were collaborating on the face of it, when we scratched the surface there was very little going on in the form of substantive and progressive work towards the ultimate goal. It was almost like a facade, and the process was self-serving. The outcome did not amount to a great deal.
Should there be a process whereby we all sit back after a particular point and ask if we have reached the milestones and recommendations set out? This could be after six months or a year. My fear is that no matter how good the recommendations are, I could be back in a year's time - if I am elected - and see the same situation. The witness can understand that, especially if we consider the historical recurrence of the issue over the past ten or 15 years.
Mr. Michael Kelly:
Let me rewind a little. With respect to the motives of the two institutes from the beginning of the process, I have no doubt that both entered this with enthusiasm and got on with what they felt had to be done in a conscientious way from the beginning. The stage one report they prepared bears testament to that. They then ran into difficulties and some of those were occasioned by what I term "external events"; they were external to this process and caused interruptions. I can contrast my experience with the Dublin consortium with what I have observed retrospectively with respect to the south east. In Dublin, from the beginning, the momentum flowed consistently, led very much by the three presidents in the colleges. I chair the steering group, and that is where the dynamic for pushing ahead needs to emerge.
At the end of the day in any of these consortia, the people who decide whether it happens are from the institutes concerned. We cannot make that happen. I am absolutely of a view, based on what I have observed in the south east, that given a chance to ventilate some of the issues from the past and given a proper framework within which they can progress their stage two business plan, this is perfectly achievable. Rather than a whip hand from outside, the incentives need to be of a more positive kind and they need to be around understanding what will support the process, propel it and incentivise people to go the extra mile. That is what is required; we require extra effort in addition to the day job in order to do everything that needs to be done.
Effectively, by extension, Mr. Kelly is saying he has faith in the people in the leadership positions in both of these institutions to do that.
Does Mr. Kelly believe the leadership is there for that to occur?
Mr. Michael Kelly:
Yes. I have made careful recommendations around the construction of the steering group, for example, and the project team that should be in place. The main competency I would seek is enthusiasm. Again, based on the experience in Dublin, enthusiasm from the top and in the project team is what propels something such as this forward. Beyond that, an amount of material support must be provided to make it happen.
I will pick up on that. In Mr. Kelly's report and opening statement, he referred to the competing demands throughout the education sector. It surprised me, and Mr. Kelly is very strong on it. Mr. Ó Foghlú deals with the entire education sector and has me constantly pestering him about national schools in west Waterford. I understand how busy and demanding the education sector can be. A couple of days ago, I met with the INTO with a list of reasonable issues, as does every Deputy. What popped out of the report was how critical the proper resourcing of the process is. An example to which Mr. Kelly pointed was that when he puts together the steering groups and the key groups of people engaged in the process, they must be taken out of their regular day jobs and there is an issue regarding compensation and funding. Can Mr. Kelly talk about it, where it may have fallen down in the past and what funding and resources we need to make it work?
Mr. Michael Kelly:
Let us examine the evidence. The evidence on which I rely comes from the report I mentioned in my statement, which comes from examining the experience of this type of process across the EU during the past 15 years. My interpretation of the evidence is that the rationale for working with the merging and consolidation of institutes is not about knocking things together but building stronger capability. It is through, for example, cross-disciplinarity, multi-disciplinarity, stronger quality processes and so on in the larger institution that we can achieve, not just efficiency gain, which should be part of the agenda, but also a step change in quality of outcomes in terms of the student experience, the quality of graduates, research excellence and the engagement the institutions have with their local communities and in responding to real needs.
When we start from there, the other message that comes through in the evidence is that one pays for this sooner or later, at the start or in lower-than-expected quality outcomes later. When we put a university brand on any Irish institution, we need to do it with great care, and this is reflected in the standard, in the very exacting designation criteria, for example. This also needs to be reflected in the preparation we put in. In the Dublin context, we have taken three years thinking it through and beginning to action some of the pieces of it. It will take much investment, and although finding this investment within the overall higher education budget is challenging, we cannot rely on institutions to find the great majority of what needs to be invested from existing pools, given that they would have to take it out of something that is already happening.
There are practical issues surrounding WIT regarding managing legacy debt. Major strains still exist. We are talking about funding this critical measure with all those issues still remaining, and it requires support from the Department and the HEA.
I am not saying something Mr. Kelly does not know. It would be useful, and many people working in WIT would ask this question of the Department. They would have a concern about the appropriate funding of the process as it continues.
Mr. Seán Ó Foghlú:
One of the helpful aspects of Mr. Kelly's report was that it placed the project in an appropriate regional context and is trying to build up a regional rationale for it. The support in the region as a whole is a very important dimension. Mr. Kelly has outlined his recommendations for a project steering group or team and a regional stakeholder forum. When the facilitation is passed, putting such a structure in place will be very important. There was no question of resourcing in the past impacting on the situation, given that there was no lack of resources. More resources were available that they could have drawn down, but they were not in a position to do so given that they were not working together well enough and did not have the plans in place. We must recognise that there is a challenge for us and a need to resource it appropriately, particularly for the back filling and the change in the nature of institutions that is needed to enable the institutions to grow into an amalgamation. This is part of the challenge we face in considering the future funding of higher education.
Mr. Seán Ó Foghlú:
We fund the HEA. The HEA provides a limited budget for these issues and a number of amalgamations and technological university applications are under way. There is an existing limited fund. The question is how we can seek to enhance it. For State funding, it is an Estimates issue.
Mr. Seán Ó Foghlú:
The Deputy mentioned the debt overhang. It was unfortunate that we had to loan WIT the money and we have had an investigation about it. Arising from the investigation, the Minister made a decision to invest the money. We recognise that WIT is in a difficult position and WIT has asked us to re-examine the repayment schedule. While we are examining it, we have not agreed a revised repayment schedule.
It would be a good idea to deal with it sensitively. It would send a message to everybody who works in WIT that the Department is taking seriously the funding issues in the institute. It would probably be a supportive measure if the Department were to deal with it differently.
Mr. Michael Kelly:
Specifically regarding technological universities, I was a member of the Hunt groups which prepared the strategy on higher education a number of years ago. During the course of this, the concept of the technological university first emerged. Shortly after that, after leaving the HEA, the consortium forming in Dublin involving DIT, Tallaght and Blanchardstown asked me to take on the role of chairing the steering group, which is made up of the three chairmen and presidents. I have worked with this group since 2011 in working through the various stages of the pre-designation process, namely, stage 1 to stage 3 in the case of the Dublin consortium, which is also the stage reached by the Munster consortium, with which I have had no contact. In Dublin, we have come through the first evaluation by an international panel at stage 3.
That cleared us to move to stage 4, work that is under way. To my mind, the project has gone very well. We would have the same support needs in terms of financing and so on as other consortia and will be talking to the HEA about that issue. That is the background. I was able to bring that experience-----
In the context of the report, one can have a facilitator and I suppose the report helps because it identifies where each college is at, but it appears from their reports that there is not a shared vision. Perhaps it might be described as a rich tapestry of considered ideas and that may be the case, but I am wondering how one merges the rich tapestry to achieve one single tapestry of rich ideas. To get back to what probably happened, I want to see how it relates to this rich tapestry. When Carlow IT asked about due diligence in relation to Waterford IT, that is when the train stopped. Did anyone ask why the train had stopped at that station and never moved from there? Was it that Carlow IT had introduced the question of due diligence too early or was it that there was an issue about due diligence on Waterford IT's side? If that was the case, how does one get over that issue?
Mr. Michael Kelly:
On the assumption that the train had stopped owing to a request about due diligence, one may argue that in terms of timing the two things coincided, but, in fact, I would rely very much on the account I heard from other external facilitators involved in this process at earlier stages to interpret what was really happening. My judgment is that in terms of mindsets about real, deep-down collaboration, there were problems on both sides. That has been confirmed to me by other people who were involved externally previously. I would not go with the simple assumption that it was simply about due diligence. Let me deal with that because I have a very strong feeling about this issue. In the context of the Dublin consortium, we have actually left that matter to item Z. It is way down the list. Why? It is because everyone is dealing with one another in the context of trust. Our expectation is that there will be open disclosure of relevant data, information and facts and so on between partners in a trusting relationship and that it should not be necessary to rely on very expensive third party examinations to surface data that should normally be exchanged in an open way between two institutes preparing to work together in a collaborative arrangement.
I would have serious doubts about the value of moving due diligence way up to the top of the queue because it would set off all of the wrong attitudes, questions and so on. As someone who has experience of change management processes, restructuring and mergers in other contexts, I would, in the first instance, be much more in favour of developing the foundations of trust and relying on normal processes of open disclosure, which come for nothing and do not cost the taxpayer anything, rather than relying on expensive third party processes to yield data that really should be exchanged openly.
That is why I asked the question because in both statements they talk about the need for this structure in the south east. I understand it. I should declare an interest, being a representative of Carlow-Kilkenny. I am sure Deputy John Deasy, being a representative of Waterford, has the same interest. I wonder why, in the course of building that trust, it did not get to the stage where they trusted each other enough to share information openly.
Mr. Michael Kelly:
I cannot offer any more on the issue than what I have in the report. In the case of my own exercise, the terms of reference are much more about looking forward than looking back. I did look back in trying to see if there were learning points from what had happened previously that we could harvest and put on the table in order that we would not repeat the same mistakes again. I have done that in the report. What they all pointed me towards was not to try to assume that we just move on with this in some conventional sense. Actually, we needed, for the very reason the Chairman mentioned, to allow a period, which I argued in answer to Deputy John Deasy's earlier point about about moving on with this, in order that it would not be rushed. We should be sure when coming out of that period that we have the foundations of trust and mutual respect that will be required to build a solid institution concerned with preparing young minds for the future. We need to be very careful about getting that environment right. We should spend the time and the trouble getting this stuff up on the table and out of the way and then move on. If we do that, I am confident that we will have a much more open attitude towards the sharing of data, information and so on to the point where-----
Mr. Michael Kelly:
On the Chairman's point about different vision statements, when one analyses them, the language is a little different, but the foundations are very common. There is about 80% commonality in what they have described. Where there are differences, I know what they are about. They are about how research is organised throughout the institute and about governance and management structures. In both cases I have suggested that, in the first instance, there are two principles that should apply. Rather than dealing with it as some kind of football to be kicked around by either of them, there should be an external, expert-led, evidence-based, rational and objective examination to have some options.
The discussion should take place around those rather than have a ping-pong battle where anything could happen.
Mr. Michael Kelly:
In general, I found their attitude very constructive. I have summarised the attitudes that came through and, in all cases, I have actually grouped them as TUI on the one hand and everybody else as part of a group view. If I can deal with the latter first, I found in general a very strong commitment to the ideal of a technological university for the south east, some natural anxieties about the usual range of rationalisation things and also some levels of frustration with what had gone on already. One expects trade unions in a process like this to stand up and defend the rights of their members. That is why they are there and, as such, one expects in the normal course a certain amount of fire in that context. I found the predominant attitude was not so much concerned with personal interest, but was much more about getting on with this. It was mission focused. In relation to TUI, it has fairly well expressed its public attitude about the technological university. In summary, it is that it is not opposed to it but would like to understand a lot more about how it would work and how it would impact on its members in various ways. My response to that has been that the academic community will actually be at the heart of any bottom-up process around the design and implementation of technological university, so they will have every opportunity to participate, as is the case in Dublin now. The heart of these new institutions will actually be designed by the academic staff in them. They are right in there from the beginning and, in relation to industrial relations issues, there are formal processes to take care of them.
The remark I made was in relation to the terms of reference in paragraphs 1 and 2 envisaging engagement and consultation with stakeholders taking place around the vision for TUSE. I quote: "This did not prove possible in the context of this process".
Mr. Michael Kelly:
Yes. My ideal conversation would have been to have been able to organise a round table at the start of this and to say, "Let us force the broad brushstrokes of a shared vision out of this". That did not prove possible because the initial attitude of WIT had been that it was not prepared to participate in this process at all. Then, it brought itself around to a position where it would, but it did not extend to developing a shared vision.
As such, Mr. Kelly sees it then as some professional from the outside working with a steering group to press this agenda ahead and to provide the supports necessary based on the building of trust before he gets anywhere else.
My only comment on "Z" is that I have often seen arrangements or deals falling asunder because of due diligence. This is not for Mr. Kelly but for Mr. Ó Foghlú or Mr. Boland, but I note that it would be a pity to invest heavily in the beginning if one was not to deal with the really serious issues we know exist on the Waterford side from the reports we receive in terms of its audit. A resolution in relation to that needs to be considered by the Department because there is a serious amount of money there and issues which have to be resolved.
Mr. Seán Ó Foghlú:
I have a comment on that. Clearly, Waterford Institute of Technology went through a process with the investigation and we have had a hearing about it. The most important thing for us is that Waterford Institute of Technology welcomed the investigation and engaged with it openly. It found a range of issues, gave rise to us having to lend the institution some capital funding and resulted in a wide range of recommendations. WIT is working through the implementation of those recommendations and those issues are coming up to a certain extent in the audit report which the Chairman is noting today. We plan, as we always do, to review the implementation by WIT of the recommendations in the Quigley report and we have agreed with Dermot Quigley that he will go back in and review the implementation in WIT of his recommendations. We have not agreed the timeframe for that, but envisage it will happen later in the year. As such, we are very conscious arising from the investigation and the Comptroller and Auditor General's report on Waterford that there is a need to ensure that the recommendations are implemented and that the governance structures are working appropriately in WIT. From that point of view, one can understand why Institute of Technology, Carlow would have had some concerns given that this was happening as the process was under way. Mr. Kelly addressed that in his report. Waterford IT has been open about the fact that it had issues and that it wants, and is seeking, to address them. We always planned that this would take place but are now planning to do it by the end of the year. By asking Mr. Quigley to go in, it means it will not be someone who has to learn the ropes again. It is somebody who was there, knows what changes he wanted and can see in person what changes have been made.
We know where we are with this. We have been down this road before to a certain extent. It is fair to say, and it should be acknowledged, that there are people with differences of opinion on any relationship between both institutions and there are those opinions that exist and dwell in both institutions. However, the important point is that the report stresses that this is feasible, necessary and makes sense. That is why we are going to continue with this and move on. That is the overriding and overarching issue.
As a commentary, and this is not pointed towards anyone in this room, I have noticed that this became very fractious and emotive. It became very political. It became an issue everybody had a comment about. It would be naive of me to expect or try to prevent political representatives from commenting on this as the process is rolled out and develops, but it is worthwhile expressing the view that we should allow this process to grow without the political commentary that has existed and been harmful and damaging to this venture over the last ten years. That makes me suggest that it is incumbent on the Department of Education and Skills and the HEA to have a more committed role with regard to oversight of this process. We will be relying on them to do that. I will not get into the historical stuff with regard to what I think has not happened when it comes to oversight, in terms of dealing with this, over the past ten years.
We have dealt with that sufficiently in this committee. It is incumbent on both organisations to provide that oversight. More keenly, that has occurred in the past to make this work. I thank Mr. Kelly. I appreciate his assistance.
I refer again to what Deputy Deasy said because it is true. The question I asked relates to a report in The Sunday Business Postof 22 February 2015 on WIT. It seems that a voluntary disclosure amounting to €371,667 relating to tax owed by contractors for 2010, 2011 and 2012 is in the accounts. According to the report, the accounts for 2012, which were not signed until 2014, show that WIT recorded an operational deficit of €563,000. I think these issues concern people generally when there is discussion of mergers and everything else. All of us want to see that happen. It is a priority to get these matters dealt with.
Mr. Seamus McCarthy:
Could I make a point that might relate to due diligence and so on? Waterford Institute of Technology deviated from a template issued by the HEA for the format of accounts for institutes of technology. It had a different structure for the provision of campus services by companies. The results were not consolidated. Once the 2014 financial statements have incorporated all that in a standard format, certain issues may come to the surface but a line should be drawn under some of these issues to a certain extent. This may make the due diligence process a little easier.
We will deal with other issues relating to Waterford Institute of Technology in the next segment of the meeting. It is better not to confuse them with Mr. Kelly's report or with the process that surrounds Carlow and Waterford institutes of technology. It would be better to separate them. If members are agreeable, we can thank Mr. Kelly for coming along and move to the next part of the meeting.