College heads fear the government is planning to take responsibility for financial checks out of their hands, despite funding chiefs dropping the proposal in the face of protests.
The Association of Colleges has said it would oppose proposed instruments and articles of government if they allow the Learning and Skills Council to appoint external financial auditors for colleges. Colleges currently appoint their own auditors.
A consultation paper issued by the Department for Education and Employment contains a draft of the new rules for governance, which state that auditors can be appointed by a college, or "if the council so determines, appointed in respect of any financial year by the council".
The controversial "Article 20" is included despite a decision by the Further Education Funding Council to back down from its proposal to extend its responsibility for audit to include external checks on colleges' financial statements. The decision followed a consultation that showed that more than 75 per cent of institutions were opposed to the idea.
The FEFC had received representations from auditors, as well as colleges, who expressed concerns. In its response to the FEFC, the AoC said that taking away responsibility for financial audits would "constitute a serious erosion of college autonomy".
John Brennan, the AoC's director of further education development, said the latest proposal from the DFEE could prove equally unacceptable.
"If the purpose of introducing this power is to allow the LSC to take control of audits, we will oppose it," he said.
The FEFC has decided to go ahead with top-slicing funds to meet the costs of audit work on student records, despite objections from 57 per cent of institutions.
A report on the consultation says: "While acknowledging that costs are likely to rise, the council considers that top-slicing represents the most practical solution."
- Lecturers' union leaders have offered to join forces with college heads to seek extra government funding to help cash-strapped colleges fund a 3.3 per cent pay rise.
Natfhe general secretary Paul Mackney has written to 80 colleges that have yet to pay the increase asking them to explain their situation. "If they are in difficulty, we are willing to make specific representations to ministers," he said.
But colleges that adopt a "can't pay, won't pay" response will face industrial action, he warned. The AoC said its survey showed that more than a third of the 80 colleges named by Natfhe had signed pay agreements.