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Whistleblower lifts lid on £40,000 left out of art college expenses report

Britain’s oldest art college is facing serious questions over an alleged attempt to cover up the expenses of its principal and a senior colleague.

Officials at the Edinburgh College of Art initially informed the Sunday Herald that principal Ian Howard and another employee had racked up around £10,000 on corporate credit cards.

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But following the intervention of a whistleblower, who insisted the figures provided were “false”, the college has confirmed the bill for the pair was closer to £50,000.

An MSP has now called for a proposed merger between the college and Edinburgh University to be halted while an audit is conducted into the revelations.

The college’s merger with its larger neighbour is partly being driven by the college’s financial problems.

Due diligence carried out as part of the proposed restructuring uncovered £9 million of debts, while the college has also had to receive a £1.6m advance from the Scottish Funding Council to keep it afloat.

In March, the Sunday Herald asked the college to supply a breakdown of all costs incurred by its senior management team on corporate credit cards since 2007.

Ian Howard, who has been principal since 2001 and is also treasurer of the Royal Scottish Academy and a trustee of the National Galleries Of Scotland, was shown to have spent £5,570 on his college card over three financial years.

However, after the Sunday Herald was urged to ask the college to recheck the figures, that total was revised to £15,736, which formed the lion’s share of a total expenses bill of £18,973.

The new figure included £13,236 in travel and accommodation, up from the college’s first estimate of £3,354.

The college’s initial information also suggested Michael Wood, at that point the college secretary, was responsible for £3,993 of credit card spending over the same period. But that figure has since been revised to £32,217, part of an overall expenses bill of £53,193.

The college initially told this newspaper Wood had run up £2,212 of travel and accommodation expenses on his card, but the figure has now grown to £19,883. The college had at first also suggested Wood’s hospitality costs were £1,781, the bill to the taxpayer was actually £12,334.

The differences emerged after a college insider contacted the Sunday Herald about the veracity of the initial figures, which were revealed under Freedom of Information legislation.

The source said: “The figures you were given in respect of expenses were false. They bear no resemblance to what happened.” The whistleblower urged this newspaper to resubmit questions about the expenses claimed by Howard and Wood.

A college spokeswoman said of the revised figures: “The information provided this month shows some discrepancies from the details sent to you on April 6.”

As an explanation, she said: “Some of the difference is attributable to full-year, rather than part-year, figures now being available.

“It would appear expenses that were or were expected to be recovered from consequent income generation were omitted, although we are unable to verify this since the individual responsible for the compilation of the data is no longer in the college’s employment.”

The spokeswoman confirmed the “individual” referred to in the statement was Michael Wood, who left the college last month ‘‘for family reasons’’.

These revelations pile further pressure on an institution that is unlikely to survive in its current form.

The due diligence documents disclosed Edinburgh College of Art breached several covenants of an £11.5m banking loan for the purchase of a new building.

In a potentially illegal move, the college also borrowed £1.5m from its student scholarship fund, the Andrew Grant Bequest.

It was also revealed that a history of neglect in maintaining college buildings has left it facing a bill of £44.1m for upkeep and necessary improvements over 10 years. The entire estate was last year estimated to be worth only £37.3m. This month the college announced it needed to shed staff to make £1m of savings by January.

Asked whether the college believed an attempt was made to cover up the credit card expenditure incurred by the principal and Michael Wood, a college spokesman said: “Over the past 18 months, the college -- with the full involvement of the chairman of the board of governors and chairs of key governors’ committees, the principal and others -- has taken steps to put in place much more robust policies and procedures to strengthen management and financial capacity.”

Lothians MSP Margo MacDonald said: “Given that the status of the college is about to change on account of its financial problems, these revelations show further checks are required within Edinburgh College of Art before any merger goes ahead. There also needs to be a thorough review of the college’s Freedom Of Information procedures.”

David Belsey, national officer for Further and Higher Education at teaching union the EIS, said: “The difficulty of obtaining the correct expenses, which required two FoI requests and only came about after a whistleblower acted … raises questions about governance and the level of scrutiny at the college over the use of public money.”

  Former governor paid £300,000 in consultancy fees...without tenders

 

A former governor of Edinburgh College of Art was paid more than £500 a day in consultancy fees to produce a pamphlet twice a year and organise social drinks for alumni, according to figures released under Freedom of Information laws.

Betty Davies served for 12 years as a governor of the college before stepping down in 2001. She was handed work worth nearly £300,000 of public money over the next eight years.

None of the contracts were put out to public tender, according to Davies.

“It was not unusual for me to be asked to take on operational responsibilities,” she said. “One expected that. I didn’t even need to canvass them. The college came to me.”

At one point Davies’s company, PerForm Communications, was given £200,000 for 393 days’ work between October 2005 and November 2009, equivalent of £508 a day.

Work that her company was commissioned to carry out included:

   Producing 10 issues of the college’s alumni magazine Decades, which had an average nine pages per issue Developing the alumni database  Organising drinks functions in the UK and New York and arranging events for the college’s centenary in 2007.

 

Davies was also paid £25,000 in October 2003 to design ceremonial silk robes for governors and senior staff at graduation. PerForm also received £49,227 between November 2003 and September 2005 for unspecified work.

Davies said the fees and expenses were “passed” by the then college secretary Michael Wood after being “signed off” by principal Ian Howard.

Her work with the college came to an end last December. “I was rather grieved about it,” she said. “It was a terrible thing to happen, having poured heart and soul into it.”

Davies had previously worked as a consultant for Royal Bank of Scotland, Bank of Scotland and the Dunfermline Building Society.

She had served on the board of Edinburgh College of Art since 1989 until her term ended in 2001. She denied that receiving £300,000 from the college without a tender process smacked of cronyism.

“I never viewed it as such,” she said. “I am a professional working woman. They had other consultants to do things. I’ve always been above board with these matters. I’ve tried to do things as honourably and honestly as I could.”

Glasgow Anniesland MSP Bill Butler said: “The use of consultants in the public sector needs close investigation and scrutiny. Consultants should be used sparingly, and only after a proper tendering process.”

A college spokeswoman said: “The college employs very few consultants. The payments to PerForm include fees and items of expenditure incurred in organising alumni events.”

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