An unknown number of blank Swansea Institute examination certificates were printed and distributed in Malaysia due to the institute's "seriously flawed" overseas control arrangements, a report published this week says.
The Commons Committee of Public Accounts has concluded that "the extent of possible fraud remains unknown" after disclosure of a stock of 500 of the certificates held by a Malaysian agent.
The committee, which last year considered National Audit Office and Welsh funding council reports on the institute's management of overseas courses, said that although only three certificates were unaccounted for, it was "most concerned that the funding council was unable to provide assurance that additional certificates had not been printed".
A report summarising the committee's findings says: "We are concerned, in particular, that there was inadequate control over examination certificates in Malaysia that could undermine confidence in the institute's qualifications."
The report calls for funding council chiefs to encourage the Quality Assurance Agency to introduce a kitemark for courses meeting the high standards expected of British higher education.
The report adds that, as a result of "many deficiencies" in the financial controls of overseas activities, the institute may have received less income and incurred more costs than it should have done. The committee agreed with the funding council that former principal Gerald Stockdale's 18 visits to Kenya at a cost of nearly Pounds 25,000, bringing in Pounds 28,619 for the institute, were "ill-judged".
The NAO report revealed that from April 1992 to July 1996, institute governors and officers spent Pounds 125,000 on 91 trips abroad, including 33 trips costing Pounds 65,000 made by Dr Stockdale.
The committee warns that without adequate procedures for costing and pricing overseas courses "there is a risk that the funding council may inadvertently be financing such provision", even though this is "not a proper use of funding council grants".
The report notes the problems at Swansea had been long standing, and raises concerns that the funding council did not recognise their seriousness earlier. It points out that an institute contract with Dr Stockdale could have cost about Pounds 314,000 had he not resigned voluntarily. Although the problems at the institute were "ultimately his responsibility", Dr Stockdale received a Pounds 118,921 settlement.
"We are concerned that, once again, the Committee of Public Accounts has been presented with a case where an individual responsible for serious mismanagement receives a generous settlement," the report says.