Report points the finger at London Met

KPMG blames institution for student-data inaccuracies and raises spectre of further Hefce action. Melanie Newman reports

August 6, 2009

Independent auditors advised funding chiefs to re-examine London Metropolitan University¹s student-data returns going back as far as 2002, raising the spectre that the troubled institution could have faced repaying even more than the £36.5 million it already must return.

The Higher Education Funding Council for England commissioned a “lessons-learnt” review from KPMG earlier this year after serious inaccuracies in London Met’s non-completion rate led to Hefce clawing back £36.5 million it had wrongly paid to the university between 2005-06 and 2007-08. London Met’s grant for 2008-09 was reduced by a further £15 million.

KPMG’s report concludes that Hefce should consider “whether it has a duty to gather any further evidence in respect of prior-years data at London Met, in order to identify if any further action should be taken, including the recovery of further funds as necessary”. But the Hefce board confirmed that it had decided not to re-open the student-data returns for 2002-03 and 2004-05.

Hefce identified problems with London Met’s student data as far back as 2003-04, but did not uncover the scale of non-completions until 2008, the report says.

A “high level of dispute and disagreement” between the funding council and the university hindered more rapid progress on identifying the problem, it adds.

London Met has maintained that no concerns were raised about student non-completions until 2007, despite two Hefce audits. The KPMG report says that data concerns were raised by these audits, and adds that the scale of the non-completions could not have been uncovered during those three-day inspections.

The KPMG report says: “The data audit and analyses processes identified concerns over… student-data returns from 2003-04. The audit and analysis work in respect of the 2005-06 data directly triggered the scale of the issue being uncovered in 2008.”

It adds: “The original audit and data processes at the council, while they did not identify the magnitude of the non-completion issues arising, did identify that the data was not of a satisfactory quality over an extended period. The council therefore persisted with its inquiries until the point it proved necessary to carry out… detailed work directly at the university.”

The report is not uncritical of Hefce, saying that the student data’s lack of credibility, identified by the early audits, “could have triggered earlier detailed action to clarify the issues of concern”.

If the Hefce auditors had extended their testing during those audits, “it is possible that the large scale of the non-completion issues may have been more clearly identified and pursued”, the report says.

KPMG notes the dispute between Hefce and London Met’s management over the definition of non-completion, but concludes: “The responsibility for the accuracy of data returns and ensuring that weakness in data are identified and rectified, as with all systems of control, lies with the institution and specifically the designated officer.”

In its response to the KPMG report, Hefce notes that it “may not be enough to satisfy all of Hefce’s stakeholders with an interest”

“We cannot expect this report to be considered the equivalent of an independent public enquiry as has been demanded from some LMU stakeholders,” Hefce said. KPMG also makes this point, saying explicitly in the report that “this review is not an independent public enquiry”.

To view detailed Hefce documents relating to this case, see:

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