University denies allegation that staff 'ran a brothel'

Glasgow Caledonian University and Moray College are under investigation by the National Audit Office following allegations of a misuse of public funds.

An unnamed correspondent has alleged that a Romanian house rented to staff from Glasgow Caledonian's university company was run as a brothel. An NAO spokesman refused to comment on the allegations, but said its investigations were continuing, after which it would reply in full to the correspondent.

But the university has attacked the complaint as "ludicrous and exaggerated". A GCU spokesperson said the complainant had sent no substantiating evidence to the NAO, and the university did not know who the complainant was. But because public funds could have been put at risk, the NAO and GCU had been obliged to conduct a preliminary investigation to check that the complaint was without foundation.

"Our initial investigation has been completed and no evidence whatsoever has been found to support the sensationalist aspects of the complaint, in particular the allegations that the university's company was involved in some way in running a brothel,"

said the GCU spokesman.

The university has admitted "operational difficulties" in 1995 with a project to help Romania's economy become more entrepreneurial. But it said these were put right and the funders of the project subsequently extended it. The troubled university underwent an NAO investigation three years ago amid concerns focusing on principal Stan Mason, fired for gross misconduct and subsequently ruled to have been unfairly dismissed but guilty of wrongdoing.

Moray College staff have made a range of allegations to the NAO about principal Robert Chalmers, some of which are startlingly similar to those made about Professor Mason. They include nepotism, inappropriate use of college equipment and vehicles, and questionable overseas trips.

A college spokeswoman said the board of management had taken the "precautionary step" of suspending Dr Chalmers pending the outcome of disciplinary proceedings to be brought against him.

John Sizer, chief executive of the Scottish Further Education Funding Council, is carrying out an investigation at the college on behalf of the NAO. His report will go to the council's February meeting and then to the NAO.