Thursday, 11 October 2012
Topical Issue Debate
Higher Education Institutions Issues
I thank the Ceann Comhairle for allowing me the opportunity to raise this important matter of public interest, which is also of grave concern to me, especially given the recent revelations of how taxpayers' money has been spent in some of our educational institutions. For example, in Waterford Institute of Technology, the spending in the president's office alone increased from €30,000 in 2000 to more than €600,000 in 2008. From recent reports, I understand there have been numerous breaches of financial governance procedures and protocols within the institute.
I compliment the Committee of Public Accounts and its members who are currently examining this matter and I hope the spotlight will ensure full transparency around this problem. Also in my constituency, De la Salle College in Waterford city, a second-level college with a great educational heritage and reputation, has had its reputation damaged in recent times due to the college's racking up more than €500,000 in debts on school refurbishment projects that, according to a recent whole school evaluation, had little educational benefit. Management and governance were so poor the Department of Education and Skills had to appoint an administrator to manage the college while these debts are being dealt with.
I am aware also of a national school in County Waterford where in recent years it was discovered that a former principal was operating a number of bank accounts and had held school moneys without the knowledge of the school's board of management. The same principal had adopted annual accounts at board of management meetings over a number of years, knowing full well these moneys were neither being accounted for nor reported to the board of management. When this came to light an initial two accounts were discovered, with a further four discovered subsequently. Only under the threat of disciplinary action did the principal give full permission to the board of management to access all the bank accounts he had opened and in which school funds were held. Eventually more than €77,000 was transferred by the former principal from these private accounts back to the authorised board of management bank account. In total, 19 private bank accounts were discovered which had been opened and operated by the former principal without the knowledge or approval of successive boards of management. Eventually, the board engaged independent expertise at its own cost. The experts did a forensic analysis of the accounts and compiled some very important questions that required answers from the former principal. The board requested a break-down and explanations from him regarding the €77,000 which was transferred back to the authorised school account.
I do not suggest any school funds were misappropriated but there were financial irregularities in this case and one can only imagine the distress and upheaval this matter has caused within the entire school community. The board of management asked specific questions of the former principal about certain transactions that went through these private accounts. When these questions were put to him he went on sick leave and never returned. He subsequently retired. To this day many questions remain unanswered regarding the operation of these private accounts and the management of school finances during this period.
What disappoints me is that during all of this time successive boards of management of the school in question sought assistance from the Department to deal with these issues but they received very little support or advice and were left to their own devices to manage what had become a very difficult financial problem. A whole school evaluation was carried out during the period and even though the inspectors were informed of the financial irregularities they did not examine them closely other than to make a passing reference in their final report. This is not good enough. Millions of euro of taxpayers' money is put into our educational system. We are entitled to expect thorough and adequate financial governance, as well as checks and balances to ensure the proper management and allocation of these funds. If this can happen in the two colleges and this primary school in my constituency we can be sure it is happening in others around the country.
I thank the Deputy for raising the issue. The issues raised in regard to expenses which occurred in the past in the office of the president in Waterford Institute of Technology are of serious concern. It is incumbent on all public sector organisations and governing authorities to ensure public funds are expended in an appropriate manner. It is simply not acceptable for scarce public money to be squandered on lavish expenses in public institutions.
The Department of Education and Skills and the Higher Education Authority, HEA, are committed to ensuring the efficient and effective spend of all resources within higher education. While it is not feasible for the Department or the HEA to monitor or approve all individual levels of expenditure within the higher education sector, there are clear accountability and governance procedures in place within institutions and reporting mechanisms to the Minister for Education and Skills and to the Oireachtas.
With regard to the particular issue associated with Waterford Institute of Technology, an external review commissioned by the institute to ascertain the extent of spending by the office of the president is nearing completion and I understand the HEA hopes to receive that report shortly. The Minister, Deputy Quinn, has asked officials in the Department, in consultation with the HEA, to consider what further steps may need to be taken and is awaiting that advice.
In the wider higher education sector, under both university and institute of technology legislation, the president is the accountable officer of the institution and is answerable to the committees of the Oireachtas in regard to the disposal of moneys. The legislation also provides that the Comptroller and Auditor General undertake annual audits of the financial statements of universities and institutes of technology, which include a review of expenditure incurred by the institutions. The Comptroller and Auditor General reports regularly on these audits.
Furthermore, and in line with practice in the public and private sector, codes of governance have been agreed at a sectoral level which provide for a range of effective measures around procedures for procurement, tendering, financial reporting, internal audit and travel. This further increases the accountability of institutions by requiring the establishment and implementation of specific mechanisms in these areas.
Robust processes and systems combined with constant vigilance, regular review of processes and procedures and prompt reaction to any failures are key components of an effective accountability and control system. Each university and institute of technology is required to submit to the HEA an annual statement confirming adherence by the institution to all appropriate procedures and measures in regard to financial control, such as I have outlined.
The Deputy spoke also about financial governance in second level schools. Voluntary secondary schools are privately owned and privately managed. The accounts of such schools are provided annually to the financial support services unit, FSSU, which is operated under the auspices of the joint managerial body.
In effect, the FSSU provides an internal audit function for schools in the sector and conducts audits and investigations where necessary. The VECs are audited annually by the Comptroller and Auditor General. The accounts of comprehensive and community schools are monitored on a monthly basis by the schools financial section of the Department of Education and Skills.
The Deputy also referred to primary schools. As he is aware, there are more than 3,000 primary schools in the State and each of these is privately owned and operated under a range of patronage arrangements. Most commonly, the local bishop will be the patron of the Catholic primary schools in a particular diocese. Educate Together, the Protestant bishops, providers of disability services and Foras Pátrúnachta na Scoileanna Lán-Ghaeilge are the other patrons involved in the arrangements to which I refer. There are no formalised financial accounting procedures in place in respect of primary schools. However, such schools are required to make their accounts available to the Department of Education and Skills upon request.
I note the protocols and procedures to which the Minister of State referred in respect of second and third level. However, as the examples to which I refer illustrate, breaches have occurred. I am of the view, therefore, that there is a need to reconsider the position.
I accept that primary schools are privately owned. However, the Minister of State should acknowledge the fact that millions of euro of taxpayers' money are being invested in private schools - which come under the patronage of various bodies and entities - to be expended on the education of our children. I outlined an example in which assistance was sought from the Department of Education and Skills in respect of problems that had been highlighted. I am disappointed that when the assistance to which I refer was sought, support was not forthcoming. I have raised this matter in the public interest. We must be able to rest assured that taxpayers' money which is meant to be expended on the education of students is, in fact, spent in this way. I ask the Minister of State to address the particular problem I have raised in respect of primary schools and to review, from the point of view of governance, the position with regard to accounts and how school funds are expended.
It is most disappointing when failings in financial controls of the magnitude of those which occurred at WIT are discovered. I assure the Deputy that more stringent controls have been put in place in WIT. In addition, financial controls and audit mechanisms are in place in all higher education institutions. However, the arrangements in this regard vary across these institutions and the HEA is considering whether a more consistent approach should be adopted.
I am a former member of the board of management of my local primary school. One of the positives with regard to our system is that primary schools enjoy a huge degree of autonomy and independence in the context of their governance. However, this brings with it a serious burden of responsibility for members of boards of management. There is also a burden of responsibility on local communities in the context of ensuring that those who are elected or appointed to these boards possess the relevant expertise to allow them to be effective in their work and to identify and cope with issues such as those to which the Deputy refers. I am disappointed that when those on the board of management to which the Deputy refers sought support, advice and guidance from the Department, this was not - in their opinion - made available to them. I undertake to ensure this will not happen again.