€4.5m UCC spend ‘non-compliant’

University College Cork paid nearly €4.5m to 39 suppliers for goods and services in one year without going through proper procurement, new accounts have revealed.

More than €3.9m relating to 34 suppliers was declared by the university itself, according to its financial statements for the year up to September 30, 2016. However, a further €532,000 worth of goods and services supplied by five suppliers was found to be non-compliant with public procurement guidelines in an audit by the office of the Comptroller and Auditor General (C&AG).

The audit examined procurement in relation to 17 suppliers, including the five in receipt of the highest payments from UCC, worth over €14m. Another 12 suppliers with payments totalling €3.3m were chosen at random for the C&AG audit.

UCC said the spend from the 34 suppliers, which it had declared itself, was mainly related to fees paid to recruitment agencies and from IT suppliers. While it plans to tender for recruitment services from this year, it said that existing infrastructure and software necessitated the continued use of the IT suppliers.

“The university is committed to continuously reducing this non-compliant spend in compliance with national and EU procurement guidelines,” said UCC’s statement of governance and internal control.

UCC honorary treasurer Dermot O’Mahoney reported a gross €14.5m surplus for the year to end-September 2016 but after depreciation, interest, tax and other deductions, the surplus was reduced to just over €500,000.

The earnings include the €1.659m initial payment to UCC for part of its 12.6% shareholding in technology firm InfiniLED which was sold to virtual technology firm Oculus. Another €850,000-plus held in escrow from the €20m sale is being distributed this year.

The deal also led to 166 past and present staff at Tyndall National Institute, where InfiniLED’s technology was developed, sharing €565,000 of the additional €974,000 paid to UCC for royalties and intellectual property.

Research income at UCC grew by €5.8m (6.5%) to €94.5m during 2015/2016, just over two-thirds of which came from exchequer sources, primarily through Science Foundation Ireland.

“This outcome is due to the diligence and dedication of large numbers of academic staff who, as principal investigators, generate this income,” said Mr O’Mahony. “Such income is now earned on a seriously competitive basis.”

Most of an €8.9m increase in fee income came from more non-EU students and other non-state sources.

Despite increasing student intake, the main state grant fell by €1m to €43.3m, down from a 2009 peak of €94m.

The financial statements were published this week, three months after being signed off by governing body chairwoman Catherine Day and Patrick O’Shea, who became UCC president 13 months ago.

Mr O’Mahoney wrote that, despite growing research income and other successes, there are still financial concerns for the university.

“The failure nationally to agree a model and an appropriate level of funding for the university sector continues to threaten long-term sustainability,” he said.

“A new sustainable funding model for the sector is now urgently required to enable UCC play its role in supporting the economic, cultural and social development of the region and of Irish society.”

The Government has yet to act on any of the options put forward in the 2016 Cassells report on higher education funding to help meet an estimated €600m shortfall facing the sector annually by 2020. It is more thant 18 months since Education Minister Richard Bruton asked the all-party Oireachtas Education Committee to agree a consensus approach.

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