A report on audits carried out in third level institutions in Ireland has revealed DCU bailed out two if it’s loss making subsidiaries at a cost of €9.8 million.
Three of DCU’s subsidiaries, The DCU Ryan Academy for Entrepreneurship, UAC Management Ltd. and Invent DCU Ltd., accumulated substantial losses between 2007 and 2010. The report shows DCU bailed out two of it’s subsidiaries in September 2010 at a total cost of €9.8 million.
The DCU Ryan Academy for Entrepreneurship, situated in City West has been making a loss since it was established. In September 2010, DCU, in agreement with the governing body, repaired the Ryan Academy’s balance sheet by covering it’s losses of €2.4 million.
UAC Management Ltd, which manages the Helix, also had it’s balance sheet repaired by DCU, which covered the company’s losses of €7.4 million. DCU also made two contributions of €500,000 each in 2008 and 2009 to UAC, which it described as a ‘contribution to the arts’.
DCU is providing €100,000 a year for 19 years to Invent DCU, the innovation and enterprise centre on campus, after a shortfall in subscriptions. It was expected five patrons would donate €635,000 in return for shares to fund the centre. However, only two patrons subscribed, leaving a shortfall of €1.9 million.
The report states all contributions were funded from the profits of DCU subsidiary companies which were remitted to the university in previous years.
DCU owns DCU Commercial Ltd., which has 11 subsidiary companies ranging from property, accommodation, student services, entrepreneurship/business incubation and the arts. The creation of a DCU subsidiary must be approved by the governing body.
The results of all of DCU’s subsidiaries are consolidated into the annual financial statements of DCU. On 30th September 2010, the consolidated net worth of the DCU Commercial Ltd. subsidiaries was an estimated €65.8 million.
The report also shows several issues arose during an audit of Waterford Institute of Technology’s (WIT) financial statements, in relation to former President of WIT, Prof Kieran Byrne’s expenses and corporate credit card use.
The audit revealed the credit card was used to make donations and payments without the necessary approval, a policy of WIT.
Following the audit, the WIT governing body commissioned accountancy firm, Deloitte to review the costs of the Office of president. Their report showed a use of taxis instead of public transport was considered to be a possible breach of WIT’s transport policy, while travel expenses claimed without approval also raised questions.
A further report has been commissioned to look into the expenses in more detail and WIT will work with the Higher Education Authority (HEA) to ensure the breaches will not happen in the future and proper procedures are in place.
Trinity College faces the penalty of a reduced grant in 2012 after it promoted 27 members of academic staff in January 2011 despite being told by the HEA in July 2010 it was not permitted to do so under the framework.
The report also shows academic staff numbers in third level institutions reduced by 7.3% from 19,356 in December 2008 to 17,944 in December 2010. Meanwhile, the number of full time students increased by 10.5% over the same period, from 145,690 to 160,972.
The Comptroller and Auditor General special report, published last June, titled ‘Matters arising out of education audits’ was carried out for the Department of Education.
Aoife Mullen is our News Editor