The Auditor General for Scotland, Caroline Gardner, has reported to the Scottish Parliament on the financial sustainability of three colleges.
The following matters were reported in 2015/16 annual audits of Moray College, Lews Castle College and Edinburgh College, and are today highlighted in reports to the parliament:
- Weak financial planning and management arrangements at the college, which is forecasting a funding gap of £472,000 in 2016/17 and shortfalls until 2019.
- The need for the college to urgently agree a recovery plan with the Scottish Funding Council (SFC). It is also important that the University of Highlands and Islands (UHI), which manages the region, ensures that the college can deliver on its priorities within the resources available.
Lews Castle College
- Financial risks to the college from its declining performance against student activity targets, leaving it open to financial penalties and funding reductions.The college only achieved 80.5 per cent of its target for 2015/16.
- Delays in appointing board members, which had a significant impact on governance arrangements and committee meetings.
- While overall it has improved its performance in some areas, the college's financial position remains challenging and continued progress depends on a number of factors, including a curriculum review and savings from a voluntary severance scheme.
Moray College received 72 per cent of its 2015/16 income from the SFC. Lews Castle College receives 66 per cent of its £5.7 million income from the SFC, which also provides 75 per cent of Edinburgh College's annual income.
Caroline Gardner said:
"These colleges play an important role in their communities, delivering education for thousands of students every year and providing hundreds of jobs. They are also heavily reliant on public funding which can have major implications for how they manage their finances.
"Each college faces different issues but all need to take steps now to get on a firmer financial footing and strengthen their governance arrangements."