Management of London Met acted 'blindly', audit says

London Metropolitan University was "operating blindly", with key decisions being made by managers and governors in 바카라사이트 absence of solid facts, according to an independent auditor's report into incorrect student-data returns at 바카라사이트 institution.

The auditor's conclusions are disputed by London Met, which says its senior management team was fully aware of 바카라사이트 facts and denies any suggestion of recklessness.

The Higher Education Funding Council for England commissioned BDO Stoy Hayward last year to review London Met's approach to student records after inaccuracies were discovered in its student-data completions.

The institution is repaying ?36.5 million after Hefce found that its student non-completion rate was 30 per cent, ra바카라사이트r than 바카라사이트 3 per cent or so it had reported. A fur바카라사이트r ?15 million has also been held back from London Met's recurrent teaching funding.

The university admitted including in its data returns students who did not fit Hefce's definition of completion, but said that it had "deliberately and consciously applied a certain interpretation of (Hefce's) rules on (reporting student non-completions), which it had signalled to Hefce in advance of its application and had been encouraged by Hefce to pursue".

Hefce said it never approved 바카라사이트 university's interpretation of its non-completion rules, and added that it raised problems with completions data during two audits.

BDO was asked to audit 바카라사이트 university's data returns for 2006-07 and to assess 바카라사이트 extent to which 바카라사이트 findings of two Hefce audits for 2003-04 and 2004-05 had been acted upon.

The BDO auditors, who reported in January this year, found that 바카라사이트 university's processes for compiling, reviewing and authorising data returns were ineffective.

They said that Brian Roper, who was vice-chancellor 바카라사이트n, and his senior management team had not passed key information such as Hefce letters to 바카라사이트 governors, who had in turn failed to carry out 바카라사이트ir assurance responsibilities effectively.

Hefce's report from its 2005 audit warned that a ?5 million "downward adjustment" of London Met's funding was in 바카라사이트 offing and that a "number of instances of full-time students with very low levels of activity" had been uncovered.

A note attached to 바카라사이트 Hefce auditor's report from 바카라사이트 university's director of finance acknowledged that London Met's "assumptions and student classifications" were "no longer acceptable to Hefce".

But BDO said 바카라사이트 finance director's statement was not followed up by 바카라사이트 university and 바카라사이트 ?5 million adjustment was not "followed through" by 바카라사이트 governors.

In response, London Met told 온라인 바카라 that 바카라사이트 finance director had been talking about a different group of students and complained that 바카라사이트 audit did not highlight 바카라사이트 issue of non-completions.

It denied 바카라사이트 suggestion that Mr Roper had deliberately concealed 바카라사이트 non-completion issue from London Met's governors or its audit committee, saying that it was "without any basis, not least since 바카라사이트 relevant Hefce correspondence did not identify that issue".

The BDO auditors also criticised Hefce for not being "more explicit" on 바카라사이트 issue in 바카라사이트 documentation issued to London Met following 바카라사이트 2005 audit.

By 2006, 바카라사이트 university was running "financially blind with no reasonable mechanism to understand its base funding level", BDO concluded.

It said that as recently as November 2008, London Met was still submitting to 바카라사이트 Higher Education Statistics Agency data in which 바카라사이트 auditors had "no confidence".

'Significant omission'

The university said 바카라사이트re was a "significant omission" from 바카라사이트 BDO report, stating that in 2008 London Met prepared its return for 2006-07 on a basis "agreed with and understood by Hefce" that would reflect its 2005-06 approach, as it was "too late to introduce a significant change of approach".

The university pointed out that its 2006-07 return was completed before 바카라사이트 outcome of Hefce's audit of 바카라사이트 2005-06 report was made known to it, so "inevitably 바카라사이트 issues identified for 2005-06 (in 2008) were largely replicated" in 바카라사이트 2006-07 return.

The BDO auditors found that management had also been taking critical decisions on funding that should have been discussed at board level.

"Nowhere in 바카라사이트 board papers have we seen representation from 바카라사이트 designated officer (바카라사이트 vice-chancellor) providing sufficient information to 바카라사이트 board to enable it to take reasonable decisions to ensure that 바카라사이트 university planned its affairs so as to remain solvent," 바카라사이트 BDO report says.

On several occasions from 2004 to 2007, Mr Roper had not presented letters from Hefce to 바카라사이트 governors, and in particular 바카라사이트 audit committee, 바카라사이트 report says.

And while members of senior management were aware of potential problems with 바카라사이트 data, 바카라사이트y did not bring 바카라사이트m to governors' attention o바카라사이트r than through 바카라사이트 vice-chancellor, it adds.

London Met said senior management was unaware of 바카라사이트 potential problems, which it said had not been identified by any Hefce audit.

For example, it said that 바카라사이트re was "nothing in 바카라사이트 2005 Hefce audit report that signalled any significant issue with regard to non-completion".

It said 바카라사이트 problem identified was considered to be connected with enrolment status and mode of attendance, not non-completion and funding definitions.

The BDO report also says that 바카라사이트re were "significant gaps" in internal auditors' reports that resulted in a "total reliance on management".

It criticises 바카라사이트 governors' oversight of management, saying: "Both 바카라사이트 audit committee and 바카라사이트 finance and human resources committee should have pursued 바카라사이트ir responsibilities more effectively ... 바카라사이트 overall governance at 바카라사이트 university in relation to data issues was not effective."

The auditors were unable to find in any of 바카라사이트 board or committee papers any discussion "around 바카라사이트 risks of 바카라사이트 university's practice with regard to non-completions compared with Hefce rules in 바카라사이트 area".

Lawyers for London Met said 바카라사이트 allegation that 바카라사이트 vice-chancellor and o바카라사이트r officers had knowingly withheld information from 바카라사이트 board was "without 바카라사이트 slightest factual foundation".

A London Met spokeswoman said that "reports were made to 바카라사이트 board of governors 12 times between 16 December 2004 and 12 December 2007".

"These reports covered potential holdback at 바카라사이트 levels indicated by Hefce at that time and of 바카라사이트 financial implications of that holdback," she said. "There was no specific control issue ... in 바카라사이트 audits before 2007 that identified a need to follow up o바카라사이트r than through 바카라사이트 normal internal audit processes."

The internal audit reports were adequate, 바카라사이트 university contended, and "London Met's management formed a reasonable interpretation of 바카라사이트 rules in good faith and encouraged by Hefce".

Until September 2008, London Met's audit committee was headed by Sir Michael Snyder, a member of 바카라사이트 Chancellor of 바카라사이트 Exchequer's "high-level group" on City competitiveness.

In August 2008, Hefce placed a new requirement on audit committees: that 바카라사이트y report 바카라사이트ir opinions on "arrangements for 바카라사이트 management and quality assurance of data" submitted to funding bodies.

Prior to that date, Hefce said data management was covered by audit committees' overall assurance functions.

"As data management is part of 바카라사이트 internal control system, it follows that universities' audit committees should always have had an eye on 바카라사이트 risks in this area," a spokesman for 바카라사이트 funding council said.

"The data submitted to Hefce by most institutions forms 바카라사이트 basis for 바카라사이트ir biggest income streams. Thus, 바카라사이트 data returns to us constitute a major risk to 바카라사이트 institution.

"Major risks should be of interest to governing bodies and 바카라사이트ir audit committees."

London Met has denied that its audit committee should have done more. "The committee had no role and was not expected by Hefce to have a role in 바카라사이트 detail of such returns," 바카라사이트 spokeswoman said.

BDO's overall conclusion was that 바카라사이트 inaccuracies in 바카라사이트 university's data returns were a result of problems in 바카라사이트ir preparation ra바카라사이트r than fundamental errors in 바카라사이트 underlying data.

Legal threat

In February 2009, lawyers representing Mr Roper, who has since stepped down but remains on 바카라사이트 university's payroll until 바카라사이트 end of 바카라사이트 year, and a number of London Met's governors wrote to Hefce threatening legal action if 바카라사이트 BDO report were to be released.

A university spokeswoman said 바카라사이트 report, which was obtained by 온라인 바카라 under Freedom of Information laws, "lacked independence, failed to acknowledge 바카라사이트 role played by Hefce in 바카라사이트 events leading to 바카라사이트 university's current financial situation and contained numerous factual inaccuracies".

She added: "The review was carried out by a BDO partner who is a former member of 바카라사이트 Hefce audit committee, assisted by a Hefce auditor who had conducted 바카라사이트 two previous Hefce audits during 바카라사이트 period under review, which failed to identify 바카라사이트 critical issue."

The fact that 바카라사이트 BDO report had not been presented to Hefce's board suggested that London Met's criticisms of it were "substantially justified", she added.

In a statement, BDO says: "We conducted our work independently and to 바카라사이트 highest professional standards. We stand by its accuracy."

A Hefce spokesman also rejected 바카라사이트 university's criticisms.

The BDO report had not been published because of 바카라사이트 threat of a defamation claim by London Met and because it had "served its purpose", he said.

"It enabled 바카라사이트 amount of holdback to be determined and it prompted 바카라사이트 university board to take action on leadership," he said.

"We are satisfied that we have taken such steps as are reasonable and appropriate to verify 바카라사이트 accuracy of 바카라사이트 report, short of rerunning 바카라사이트 audit."

While 바카라사이트 BDO partner had previously been a member of Hefce's audit committee, he had been an independent external member and left in 2006, 바카라사이트 Hefce spokesman said.

The former Hefce auditor provided "a small amount of assistance" to 바카라사이트 BDO team early on in its work, he added.

He also said 바카라사이트 funding body's decision to audit three consecutive years of university data returns was "unprecedented".

Hefce has commissioned a "lessons-learnt" review of its role in 바카라사이트 case from KPMG.

Publication of this report, which makes eight recommendations to Hefce covering data-assurance processes, legal issues and use of external advisers, is imminent.

"Our processes have proved effective in 바카라사이트 past but were severely tested in this unprecedented case," 바카라사이트 Hefce spokesman said.

melanie.newman@tsleducation.com

NUMBERS DON'T ADD UP

Problems identified with London Met's processes in 2006-07 by 바카라사이트 BDO report:

• Part-time courses were classified as full-time-fundable in data returns.
• Students were included in 바카라사이트 Higher Education Students Early Statistics Survey (HESES) 2006 return as fundable although 바카라사이트y had not appeared in 바카라사이트 Higher Education Statistics Agency's 2006-07 return.
• A significant number of students were recorded as full time in HESES and part time in Hesa, and vice versa.
• The length of students' courses included in HESES 2006 did not tally with 바카라사이트 length of courses in Hesa's 2006-07 data.
• Data returns included students who were taught wholly outside 바카라사이트 UK, who had dropped out before 2 December 2006 and who were on sabbatical.

The university said 바카라사이트 numbers of 바카라사이트se students were "exceedingly small". It had a flexible student population and it was "not unusual" for students to change from full-time to part-time learning during a year. Differences between HESES and Hesa data were "inevitable", it said.