Members of the Public Accounts Committee have described as "scandalous" the provision of €100 million to the National College of Art and Design (NCAD) at a time when its accounting practices were found to be unfit for purpose.
The committee met to discuss a special report by the Comptroller and Auditor General (C&AG) on accountability and governance at the college.
In the eight-year period to the end of 2013, the college received €104 million in funding from the Higher Education Authority (HEA) despite significant delays in the college producing accounts.
The report identified delays of 39 months and 27 months respectively for the 2008/09 and 2009/10 financial periods.
Responding to questions by Fine Gael’s Patrick O’Donovan the C&AG Séamus McCarthy said accounting practices in NCAD were “not fit for purpose”.
Mr O’Donovan said the HEA had put €100 million of taxpayers’ money “in limbo” by continuing to fund a college “which couldn’t provide a certified set of accounts”, describing the situation as an “absolute scandal”.
Labour’s Robert Dowds, said he was “gobsmacked” by the revelations which, he described as “probably one of the most scandalous situations (the committee has) been presented with”.
The chief executive of the Higher Education Authority, Tom Boland, said the weaknesses identified in the report, although specific to the NCAD, showed there was a need for constant vigilance to ensure accountability processes.
However, he said it was “unfair” to extrapolate “a picture of complete failure of accountability in the higher education sector” because of the issues which had arisen at NCAD.
“I do not have an anxiety that there is widespread or indeed any significant abuse of governance procedures,” Mr Boland said, adding that it was “overwhelmingly a very compliant system with appropriate process”.
Mr Boland said, in future, bodies receiving funding from the HEA would be penalised where serious accounting or governance issues were identified.
“If an institution was found to be in serious breach of governance requirements and was considered to have made inadequate efforts to correct such breaches, funding could be withheld and indeed will be withheld in the future,” he said.
Mr Boland added that the HEA was considering whether it should exercise a formal audit function, either generally or on a “spot-check” basis in future.
Later in the meeting the secretary general Department of Education and Skills, Sean Ó Foghlú said he was "very concerned" about two other institutions, Limerick Institute of Technology and St Angela's College, which he said had not reviewed their system of financial control in the last accounting period.
However he said these institutions did not have “the range of issues” identified at NCAD.
The director of NCAD Professor Declan McGonagle told the committee the failures in compliance identified in the report had been acknowledged and accepted by the college. However, he said, while the report painted an accurate picture of the situation at the time of its writing, “a whole raft of measures” had been implemented to address the failings identified.
Mr McGonagle added that the college would be completely up-to-date with its accounts audits by summer of 2015.
