Financial oversight deficits found in NCAD

Severe financial oversight deficits at the National College of Art & Design have been highlighted in its latest accounts — that are already more than three years old.

NCAD’s financial statements for the year to the end of September 2014 show that it had an accumulated deficit of €1.4m, more than half of which was incurred in the year examined, when it had more than 2,000 students.

In an accompanying report, State spending watchdog, Comptroller & Auditor General Seamus McCarthy said the college’s statement on internal financial control systems disclosed a number of governance issues for the period concerned, which include “failures in relation to the fixed asset register, procurement, documentation of procedures, recording of risks and the internal audit function”.

The delays in producing its financial reports saw NCAD singled out for criticism, along with NUI Galway, in a report in July by the Dáil Public Accounts Committee on financial governance in the higher education sector.

It said that the delay is “a major failure of corporate governance” that needs to be immediately regularised.

The same criticism was levelled at NUI Galway, which subsequently published its 2014-2015 accounts two months ago.

The PAC held hearings in 2015 on a report by the C&AG which criticised the board of NCAD for allowing a situation to develop where its legal financial reporting obligations were not being met.

Mr McCarthy’s report on the year to September 2014 report says he believes NCAD’s accounting records were inadequate, meaning it could not correctly record and explain transactions.

They were insufficient to enable the college’s financial position to be determined “with reasonable accuracy” at any time, or to allow financial statements to be properly audited.

A new board was appointed in mid-2015, with University College Dublin management professor, Niamh Brennan, in place as chairwoman since then.

The 2013-2014 financial control statement, signed off by then acting-director, Bernard Hanratty, on July 25 last, says the board found it would take some time to remedy the considerable financial control deficiencies.

Auditors appointed in 2015 found in a review of bank and cash management, payroll controls and claims for travel and subsistence in place at the end of September 2014, that there was “overall, limited assurance that the systems within NCAD can be relied upon to support the overall achievements and objectives.”

Management also acknowledge in the report that national procurement guidelines were not consistently complied with during the year in question, and that “an unacceptably high volume of expenditure on goods and services took place outside of the purchase order system during this period, which has now been corrected”.

The NCAD report said work is continuing to implement changes needed to eliminate financial flaws.

The management acknowledge in the report that there were no written procedures for confidential disclosures, avoidance of conflicts of interest, related party transactions, procurement, fraud, credit cards, travel and subsistence, IT, banking or processing of journal entries.

“Written policies were drafted for all these areas in 2015 and 2016, and are in the process of being finalised and implemented,” wrote Mr Hanratty, who was acting director up to August.


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