Auditor General's report on Coatbridge College 2013/14 accounts

The Auditor General for Scotland, Caroline Gardner, has issued a report to the Scottish Parliament on matters raised in the audit of the 2013/14 accounts for Coatbridge College.

Coatbridge College was one of three colleges that merged to form New College Lanarkshire, as part of the wider college reform programme in Scotland. Whilst Coatbridge College's 2013/14 accounts were unqualified, today's report draws Parliament's attention to serious weaknesses in governance relating to severance arrangements for senior managers and one other member of staff.

These weaknesses included:

• failure to meet the standards expected of public bodies in the use of public money;
• a lack of transparency in the decision-making process for voluntary severance arrangements for the Principal, five members of the senior management team and a member of staff within the Principal's office. The total severance cost for the individuals concerned was £849,842;
• payments made that exceeded the terms of the college's severance scheme;
• the proposed severance scheme for senior staff offered terms that were significantly higher than the Scottish Funding Council's guidance and the schemes of the other colleges that merged to form New College Lanarkshire;
• failure to retain sufficient evidence (minutes and business cases) that severance proposals, and salary enhancements, had been subject to a value for money assessment;
• the absence of any evidence that the Remuneration Committee had access to the information and advice needed to fulfil its responsibilities;
• the Principal failing to take the steps needed to demonstrate that the inherent conflicts of interest were properly handled;

Thirty-three staff left Coatbridge College as part of the merger, at a total cost of £1.7 million, of which the Scottish Funding Council (SFC) contributed £1.3 million and the college contributed £397,945.

The report notes that the SFC had concerns about the severance terms for the Principal and senior management team and reinforced its guidance on several occasions. However, the college's Chair and Principal did not provide the Remuneration Committee with advice provided by the SFC.

The auditor also encountered difficulties in concluding the audit, due to delays in the college preparing the accounts, and difficulties in securing information on severance arrangements. This meant that the accounts missed the statutory deadline of 31 December 2014 for laying before the Parliament.