Universities resisted declaring tens of millions in assets

Several universities have tens of millions of euro in private trusts and foundations which they have resisted declaring in their accounts, despite pressure from regulators and the Government.

Audits into third-level institutions have also revealed a range of governance issues, such as significant additional payments to staff members and widespread non-compliance with procurement rules.

The issues come to light as university presidents argue that the sector is in financial crisis and urgently needs additional income to cope with rising student numbers and reductions in State funding.

Universities such as NUI Galway (NUIG), UCC , University of Limerick (UL) and DCU have foundations which typically engage in fundraising activities among private donors to assist education and research.

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These foundations have not, however, formed part of the accounts of these universities, even though the funds will ultimately benefit their institutions.

Latest records show Galway University Foundation Ltd's assets were just in excess of €57 million, a trust-fund linked to UCC had assets of €17 million and the University of Limerick Foundation had just in excess of €15 million in its account.

Audit records released under the Freedom of Information Act show the Higher Education Authority (HEA) has written to universities on a number of occasions in recent years stating that the accounts for these organisations need to be consolidated with those of their universities for "trust and transparency" reasons.

Some universities, such as NUIG, resisted declaring these sums in their accounts on the basis that they did not control the foundation or trust organisations.

However, in recent times, all colleges have pledged to either consolidate their accounts or make full disclosures on private trusts and foundations within their overall financial statements.

In a statement, the HEA said it was “working with institutions to ensure that this is the case moving forward” .

Salary payments

Audit records also show evidence of salary payments to staff over and above their public salaries in at least two institutions, Maynooth University and UL.

Maynooth University says the additional payments in its case were less than €10,000.*

As well as this, there has been widespread non-compliance across most higher education institutions with public procurement rules for computer equipment or services worth millions of euro.

In a statement, the HEA's chief executive, Dr Graham Love, said he was satisfied that progress was being made on addressing non-compliance with both national procurement rules and the guidelines on additional payments.

He said a forthcoming rolling governance review will focus on the issue of additional payments, to ensure any remaining issues are addressed across the sector.

The issues are unfolding against the backdrop of an independent review into a series of allegations of misconduct at UL relating to governance, human resources and financial practices.

The review follows a number of protected disclosures and other complaints made by employees and former employees of the university.

The university had resisted such a review until a new president, Prof Des Fitzgerald, took over in recent weeks.

He sought an independent review “so that [the university] can ensure the public confidence of its many stakeholders is secured through what must be a sufficiently robust and expeditious process”.

New records show there was frustration within the HEA at the lack of powers available to resolve these matters earlier, prior to the new president’s arrival.

The acting chief executive of the HEA, Anne Looney, wrote to the Department of Education last October highlighting the "absence of a comprehensive range of measures" that could be used in cases where a university was unwilling or unable to resolve matters of controversy.

She noted that any external intervention could only take place with the agreement of a university.

The only other available option was for the Government to appoint a “visitor” under the Universities Act. This would effectively move a president aside and place a civil servant in charge of the day-to-day running of a university.

*This article was edited on June 2nd, 2017