Mr. Tom Boland:

I will focus on two issues, the Carriganore project in Waterford Institute of Technology and the anonymous allegations relating to Cork Institute of Technology. In regard to Waterford Institute of Technology, the HEA notes Mr. Eugene McKenna’s correspondence to the committee on 10 October 2015. The HEA was aware of the potential consequences of the institute not proceeding with the Carriganore project, but there was no legitimate funding route available to allow the project to continue. WIT has no power to borrow either directly or through letters of comfort or guarantee. The proposal from DCS was therefore ultra vires the institute. There are no circumstances whatsoever in which the HEA could condone such actions.

In July 2012, the project was over 60% complete, with works to the value of €6.5 million completed on site. There were, however, no funds available to progress the project without borrowings, and the development committee was forced to terminate the contract. The HEA was aware that it is not good practice to terminate the employment of a contractor prior to the completion of a contract. Unfortunately, no other options existed as the project had not been procured in accordance with public procurement guidelines or the capital works management framework, and a moratorium on new capital projects in the higher education sector was introduced in November 2011 which prevented any capital grants being issued to support completion.

The HEA raised concerns regarding the relationship between the institute, the development committee and its associated subsidiary companies as far back as January 2011. The governing body was also known to be considering the relationship. On 14 October 2011, the HEA wrote to Mr. Tony McFeely, then acting president, and sought details of outcomes of discussions at governing body level and requested that the institute put in place a team of appropriately qualified personnel to examine these and related issues and report back to the governing body.

While this examination was progressing, the acting president of WIT, Mr. Tony McFeely, provided a so-called letter of comfort to the development committee regarding the funding of phase 3 at Carriganore. A report on the governance relationships did not issue until June 2012 and the governing body adopted the report and approved the implementation of the preferred option “to revise the structure of the development committee and Campus Services and make them subsidiary undertakings of WIT under new management arrangements”. Numerous challenges faced the institute regarding the consolidation and transfer of significant debts and future liabilities onto its balance sheet.

On 13 November 2012, the Minister for Education and Skills appointed Mr. Dermot Quigley as inspector to carry out, pursuant to section 20 of the Institutes of Technology Acts 1992 to 2006, a statutory inspection of companies providing a range of services in WIT. The report produced confirmed the relationships between WIT, DCS and the subsidiary companies were inappropriate. Fundamentally, the institute was wrong in providing letters of comfort to support borrowings for the Carriganore development.

In terms of Cork Institute of Technology, as the committee is aware, in March 2014 the Comptroller and Auditor General received anonymous correspondence containing a significant number of allegations in respect of CIT. The correspondence was subsequently forwarded to both CIT and the HEA. In late December 2014, a further set of anonymous allegations relating to CIT was received. CIT commissioned an independent firm of auditors, KPMG, to review and report on both sets of allegations. The HEA notes that KPMG carried out a detailed and thorough investigation of these allegations and that only minor matters of clarification were required. The HEA further notes that CIT’s audit committee was satisfied that the matters had been diligently and appropriately investigated.

During the review process the HEA remained in close contact with CIT. It also had the opportunity to review the allegations as well as the KPMG findings and has itself sought additional information or clarification as required from CIT.

This information was provided to the HEA in a comprehensive and timely manner. The HEA is satisfied that a detailed and thorough investigation was carried out by CIT and its auditors, with the auditors identifying no significant issues arising.

In circumstances such as these, it is vital that higher education institutions have processes in place to carry out comprehensive and independent investigations. This is because it is institutions and, in particular, their governing bodies that are primarily responsible for the management and operation of their internal affairs. In the context of dealing with specific allegations, institutions are expected to comply with the provisions of the Protected Disclosures Act 2014 and have procedures in place whereby employees may in confidence raise any concern about possible irregularities in financial, operational or other matters. Indeed, confirmation that such procedures are in place is now a requirement of annual governance reporting arrangements to the HEA. The 2014 Act also provides for disclosures relating to higher education matters to be made to me in my position as chief executive of the HEA.

I am happy to take whatever questions members may have.