The government and the National Audit Office this week called for tighter controls on universities' and colleges' overseas activities, as a report revealed how Southampton Institute made "significant financial losses" on mismanaged ventures abroad, writes Tony Tysome.
The NAO report on the institute urged the Higher Education Funding Council to provide "clearer and more emphatic guidance" to institutions on costing overseas operations. This was necessary to avoid the risk run by former Southampton Institute managers of using public funds inappropriately to pay for activities abroad, it said.
David Blunkett, secretary of state for education and employment, has asked HEFCE to follow up the NAO's recommendations "as quickly as possible".
The report shows how Southampton Institute, under the leadership of its former director, David Leyland, lost more than Pounds 800,000 between 1994-95 and 1996-97 on a campus in Athens and a joint venture with the University of Alicante. The Athens campus was closed in October 1996, and the institute is phasing a withdrawal from Alicante.
The NAO concluded that poor planning and management "contributed to significant financial losses as well as problems with academic quality on the overseas ventures".
The report reveals how the institute contravened cash handling regulations by receiving Pounds 12,000 in cash and cheques in "brown envelopes" from Greece.
It also raises more general concerns over the governance and management of the institute under Professor Leyland, who took an early retirement package worth Pounds 157,966 in August last year following several votes of no confidence from staff.
Roger Brown, the institute's principal since April this year, said the institute had taken action to deal with issues raised by HEFCE, and would do the same on matters raised by the NAO.