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FE college funding mismanagement hits the headlines again

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The Guardian this week reports that the National Audit Office and the Further Education Funding Council are carrying out a series of investigations into the relationship between Barnsley College Chief Executive David Eade and a number of companies he is said to have been involved with over the last ten years.

The companies are said to include a training company, Progress Training, which was set up by the Colleges Educational Trust, which in turn was set up by the Barnsley College Corporation, of which David Eade was chair. The paper says that no-one has been able to trace any clients of the training company other than Barnsley College itself, and that most of the work for the company appeared to have been done by college staff (who are not suspected of any wrongdoing) on secondment. The investigation is also looking into a possible £6 million funding over-claim from the Further Education Funding Council (FEFC), says the paper.

Barnsley College is not the first FE college to come under scrutiny because of alleged irregularities in the way finances have been organised. In April 1999 Halton College in Widnes, Cheshire, was asked to hand back £6.4 million to the FEFC after it was found the money had been wrongly claimed for by the college. Last May, Basildon College became the focus for the FEFC's attentions after a poor inspection report and what the Council termed "a deterioration of the college’s financial position". The College has since become the subject of allegations into bullying, which has seen the college principal suspended and later resign.

Concern over the way that finances are managed in cases like these (the FEFC's annual report for the year 1999-2000 found that although 49% of colleges were 'financially robust', 18% were 'financially weak') has led to plans for the FEFC to take audit arrangements for colleges directly under its control, an announcement which caused widespread concern among colleges towards the end of last year, who see it as an attack on their autonomy. With 3.4 billion allocated to 428 colleges, 53 higher education institutions and 223 external institutions in the year 1999-2000, and further funding being allocated, the government will be increasingly keen to see that funds are being properly used. The National Audit Office has made a series of recommendations as to how the management of college finances can be improved.

TrainingZONE says: It seems the Further Education Funding Council has had a difficult task in overseeing the financial arrangements of a large number of complex institutions with large sums of money to spend - although there's no excuse for situations such as that in Barnsley and at Halton. Although the National Audit Office praised the work the Council had done so far in tackling some of the problems - in part by identifying management development as one of the key factors - as the task passes to the incoming Learning and Skills Council in the next few months, it remains to be seen whether this work will be continued, or whether the incoming Council will have some ideas of its own about the financial management of colleges.

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