NAO call for ombudsman

January 31, 1997

Swansea scandal prompts action. The National Audit Office has called for the establishment of an ombudsman for higher education after reviewing events which led to "a breakdown in both governance and management" at Swansea Institute of Higher Education.

An NAO report published today and an audit report from the Higher Education Funding Council for Wales raise concern over lack of control of the institute's overseas activities and difficulties staff had in voicing complaints.

Governors and officers of the institute made 91 trips abroad at a total cost of Pounds 125,000 from April 1992 to July 1996, including 33 trips made by the former principal, Gerald Stockdale, at a cost of Pounds 65,000, says the report. Most overseas expenses claims by Dr Stockdale were "not accounted for" by detailed statements of expenditure or receipts.

They question an "ill-conceived" severance package arranged for Dr Stockdale and the role of an executive committee of the institute's governing body which went "beyond its terms of reference as a remuneration committee".

They also criticise "deficient" arrangements for the management, planning, quality assurance, student registration and control of certificates on overseas courses. The funding council points to an "unknown stock" of blank certificates held by an agent in Malaysia. Poor financial controls of activities abroad which carried the risk that "income may have been less and expenditure greater than warranted" are also highlighted.

The NAO report concludes: "It is disturbing that overseas activities at the institute should have been allowed to develop without any strategic direction and outside the usual procedures for management and control, and that there should have been such fundamental weaknesses in governance."

It adds that management and governance issues raised by the Swansea case "may have wider applicability" for higher education, "as may the absence of an ombudsman agreement".

The funding council report draws attention to Dr Stockdale's 18 visits to Kenya, at a cost of nearly Pounds 25,000, which brought an income of Pounds 28,619 for the institute. Records of the trips demonstrated "a disproportionate allocation of his time and resources to activities in Kenya given the number of students recruited and levels of income generated".

The council criticises the role of clerk to the governors being taken up by the former vice principal, Hywel Rees, leading to "significant conflicts of interest". The clerk did not properly advise the governing body on the operation of the executive committee, which took decisions on performance-related pay for senior management in 1995.

Dr Stockdale, who resigned with a Pounds 1,000 package last year, was on a contract which could have awarded him Pounds 314,000 on leaving. This was "ill-conceived" and "inconsistent with the ethos of the public sector", the funding council said.

The institute has said it fully accepts the report's findings and it is addressing all the weaknesses identified.

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