COMMITTEE of PUBLIC ACCOUNTS díospóireacht -
Thursday, 16 Nov 2000

Vol. 2 No. 30

National University of Ireland, UCD, Financial Statements for 1997 and 1998.

Mr. J. Purcell(An tArd Reachtaire Cuntas agus Ciste) called and examined.

Dr. Art Cosgrove(President, University College Dublin) called and examined.

Acting Chairman

No. 6 on the agenda is the National University of Ireland, University College Dublin, financial statements for 1997 and 1998. I wish to inform witnesses that they do not enjoy absolute privilege. Since 2 August 1998, under section 10 of the Committees of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses) Act, 1997, certain rights to persons who are identified in the course of the committee's proceedings as listed are invoked.

The witnesses have been informed of those rights. Notwithstanding this provision in the legislation, I remind members of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside the House or an official either by name or in situations which would make him or her identifiable.

I welcome Dr. Art Cosgrove and I ask him to introduce his officials.

Dr. Cosgrove

I thank the Chairman. I am accompanied by our registrar, Dr. Caroline Hussey; our bursar, Mr. Éamon Ceannt, and our financial accountant, Mr. Donal Doolin.

Acting Chairman

Also present is Mr. Paddy McDonagh, Assistant Secretary General from the Department of Education and Science. I ask him to introduce his officials.

Mr. McDonagh

I am accompanied by Ms Mary McGarry, principal officer in the higher education section, and Mr. Pat Curtin, principal officer in the external staff relations section.

Acting Chairman

Mr. John Hayden is also present.

Mr. Hayden

I am chief executive of the Higher Education Authority and I am accompanied by Mr. Stuart Roche, management accountant.

Acting Chairman

All the witnesses are welcome. I ask the Comptroller and Auditor General, Mr. Purcell, to introduce the item andto deal first with the supplement to the audit report.

Mr. Purcell

The supplement to my audit report for the accounting year 1997-98 draws attention to a number of inter-related issues centred around additional payments to UCD academic staff, particularly in the faculty of commerce, during the years 1996 to 1998. My problem was not with payments for traditional extra work for things like examination correction and invigilation, but with payments for other activities which purported to be over and above the normal duties of academic staff in universities.

It has always been recognised that university staff need to keep up to date with developments in their specialist areas. One of the ways of doing this is to facilitate them in taking up work outside the college which is paid for by third parties. A maximum of 20% of their time is allowed for this purpose, but it must be work related and not interfere with their normal duties. I am not suggesting for one moment that academic staff should not have the opportunity to engage in work outside their normal duties. However, what I am saying effectively in the supplement to my report is that it must be authorised and monitored carefully to ensure that the discharge of their core responsibilities does not suffer and that the university or its students are not being short changed.

There were a number of internal examinations in the university which expressed disquiet in this regard, the first being in July 1998 when an internal audit of additional payments to academic staff found, among other things, that the university had not developed a policy or defined the activities which were outside normal duties and for which staff should receive additional pay. The lack of clarity over what constituted normal duties resulted in a situation where some staff were receiving additional pay for work that appeared to be part and parcel of what they had been appointed to do. To quote the internal auditor in that report, an appointment to the academic staff of a university would involve a year round commitment to teaching, research activities and participation in the life of the university.

Nearly half the additional payments were being made to a wholly owned subsidiary of the university, a company called AMP, or by parties with which it had contracted for the provision of UCD recognised courses, some of which were delivered overseas. An internal academic committee which looked into the matter expressed concern in its report in November 1998 at the fact that certain full-time staff of the university were being indirectly remunerated again for duties in connection with UCD awards.

The continuing unease prompted the commissioning of a further review by a firm of accountants, who were the auditors of the university at the time, in April 1999. In the ensuing report in November last year, they detailed the financial arrangements of the courses run by the subsidiary. In the matter of additional payments to faculty of commerce staff, they noted that some received amounts of the order of £50,000 per annum over and above their university pay in respect of work carried out on behalf of the subsidiary.

In response to my inquiries, the accounting officer made the point that the operation of the subsidiary was very successful in terms of the financial return it generated for the college and that it contributed positively to the international reputation of the college. He accepted that there were certain shortcomings in the arrangements, but felt that these had been largely addressed through the adoption in early 2000 of a new code of conduct for the operation of overseas courses. A new policy on the payment of remuneration to staff for additional duties was also agreed by the governing authority in early 2000 which should have the effect of considerably tightening up authorisation and control of these activities. They are listed on page three of the supplement to my report.

The subsidiary company ceased trading in September 1999. I understand it is in the process of being wound up. The business formally carried out through the subsidiary is now administered directly by the faculty of commerce. My information is that, for the most part, staff involved in the delivery of local and overseas courses are now paid additional remuneration in the form of allowances approved by the finance committee of the college and that UCD has applied for the necessary ministerial approvals.

In the past, monitoring and control of staff consultancy activity had been suspended by the college as procedures were considered ineffective and cumbersome. I referred to this in a general report on the education sector published in September 1997. In response to my inquiries, the accounting officer indicated that he would write to all staff to remind them of their obligations as set down in the internal procedures manual and requesting a detailed return of all consultancy activity undertaken by them. I understand this exercise was completed recently.

Section 5 of the supplement refers to a waiver of income scheme operated by the college whereby staff may waive receipt of remuneration for additional duties in favour of the gross amount being paid into a departmental fund which can be used by those staff to finance attendance at conferences, equipment purchases and other personal work related expenditure. Some £464,000 was waived in the 1997-98 academic year. The audit noted instances where payments from the fund were inadequately vouched, but the accounting officer assured me these were isolated cases. I was also anxious that the way the scheme operated had been cleared by the Revenue Commissioners as this was not apparent from the files.

This is a brief summary of the accountability issues as I see them. I will elaborate on them during the course of the meeting as required by the Chairman and members of the committee.

Acting Chairman

I ask Dr. Cosgrove to make his opening statement.

Dr. Cosgrove

As the Comptroller and Auditor General will recognise, the supplementary report is based almost entirely on information provided by the university in its internal inquiries into the issues he raises. In the context of the report, I mention two developments, the growth in demand for continuing education, or what is now popularly termed lifelong learning, and the increasing internationalisation of universities. This means that an institution like UCD must aspire to be a player on the world stage.

Since many of those who are interested in continuing education are in employment and cannot attend on a full-time basis, courses must be provided in a way that allows them to combine study with continuance in employment. Thus, we provide a bachelor of arts modular degree in the evening and courses for updating professional and business skills are offered on a part-time basis with evening or weekend involvement. Last week we had our first graduate in the bachelor of business studies degree in trade union studies, which is a joint venture with the Irish Congress of Trade Unions.

We have also expanded our role in international education, particularly in the faculties of medicine and commerce. Last May the Minister for Education and Science and the Secretary General of that Department attended the formal opening of our medical college in Penang in Malaysia. This is a joint venture between University College Dublin and the Royal College of Surgeons in Ireland under which medical students spend their first three years studying in Ireland and complete their medical training in the college in Penang. They then receive degrees from the National University of Ireland and licentiates from the Royal College of Surgeons.

The faculty of commerce also conducts a number of overseas programmes, mainly in Asia. In undertaking such ventures, we were following the example of many universities in the USA, Australia, New Zealand and the UK. These courses allowed staff to gain valuable experience abroad and established contacts in Asia beneficial to the university and to the country since they were in line with the Asia strategy adopted by the Government. In a speech last June on the occasion of the State visit of the Prime Minister of Singapore, the Taoiseach expressed his satisfaction that the education links between Ireland and Singapore were being maintained by our universities. It must also be stressed that the courses in medicine and commerce brought considerable revenue to the university.

A number of these courses at home and abroad have been provided through the subsidiary company which the Comptroller and Auditor General mentioned, Advanced Management Programmes UCD Limited or AMP Limited. As I understand it, the reason my predecessor adopted the vehicle of a subsidiary company in 1993 was to lessen the risk to the university should the venture prove unprofitable. However, AMP Limited has operated successfully, has made substantial surpluses and has given the taxpayer and the State great value for money.

Payments to staff have traditionally been made for additional work, such as examination correction and invigilation, the B.Ed. module degree, adult education programmes and courses under the aegis of the university industry programme. Academic staff also receive payment for the additional work undertaken for courses run by AMP Limited. It should be stressed that all payments made by AMP Limited were properly subjected to PAYE and PRSI, a fact confirmed by a recent Revenue audit.

As the volume of activity grew in AMP Limited, the finance committee of the university, under my chairmanship, sought a detailed review of its operations. As the Comptroller and Auditor General said, a report was commissioned from the auditors to the company, Chapman Flood Mazars, Chartered Accountants. The resulting report was discussed in detail with the Comptroller and Auditor General. Arising therefrom, it was decided to make all additional payments subject to the approval of the finance committee once it had been informed by the appropriate head of department that the payment was for work outside normal duties. In taking this approach, we were cognisant not only of that report but also of a recent European Commission report on increasing life long learning in European higher education. The latter report recommended that universities should lay down financial rules making clear what is included in the normal workload of staff and what rewards they should receive for additional work.

As regards overseas courses, a dean of international affairs was appointed to take responsibility for all such courses and a code of conduct to govern them, drawn up by him, was approved by the governing authority in March 2000.

It has been suggested that the involvement of the graduate business school in the faculty of commerce in these courses at home and abroad has done some damage to its reputation. However, all the evidence is to the contrary. In 1999, in the Financial Times survey of business schools worldwide, the graduate business school was ranked ninth in Europe for top business schools and first in the world for return on investment for MBA graduates. More recently, the faculty of commerce as a whole was given international accreditation by the European quality improvements system, EQIS, which is the quality assurance arm of the European Foundation for Management Development. It is the only faculty of commerce in Ireland to receive such an accolade.

In keeping with the trend for greater transparency in the business and commercial community in Ireland, the governance of higher education establishments is evolving and taking shape. The Universities Act, 1997, was a significant step forward in that evolution. I welcome the developments which have taken place to date and I look forward to continuing to work with the Higher Education Authority and the Comptroller and Auditor General to ensure that UCD plays its full part as this evolution continues.

Acting Chairman

Thank you, Dr. Cosgrove. We now move to the examination by members. Our leading questioner is Deputy Rabbitte and he will be followed by Deputy Batt O'Keeffe.

Deputy Rabbitte

I welcome Dr. Cosgrove and his colleagues to the committee. Dr. Cosgrove said in his formal statement that his predecessor put this system in place in 1993. Is that correct?

Dr. Cosgrove

That is correct.

Deputy Rabbitte

What was the purpose of it?

Dr. Cosgrove

The purpose of it was to provide courses in business education which were outside the traditional courses in the university. They were geared specifically to meet the needs of the business community in Ireland and at short notice to provide courses for particular companies on a part-time and evening basis rather than a full-time basis. Most business schools have what they call an executive education arm. Most business schools worldwide tend to run courses for people who are currently engaged in business rather than those who are students of business.

Deputy Rabbitte

What was the position prior to 1993?

Dr. Cosgrove

Some courses were being run by the faculty of commerce, as I understand it. It ran one in conjunction with the ESB and in other instances. However, AMP Limited was set up as a vehicle to take account of all these activities and also to earn income for the university. At that stage we were being advised by the Higher Education Authority that we should maximise income from other sources.

Deputy Rabbitte

Was extra jurisdictional work being done at that time?

Dr. Cosgrove

Some courses had already taken place in other countries. It was decided the overseas programmes would fit easily under the aegis of AMP Limited. The decision was taken to place those courses in that box.

Deputy Rabbitte

Is the summary by the Comptroller and Auditor General about the outside countries which benefited from degrees accredited by UCD accurate?

Dr. Cosgrove

Yes.

Deputy Rabbitte

In the case of Kuala Lumpur, for example, the Comptroller and Auditor General's report says this course contract was dated 17 December 1996. When did UCD start accrediting degrees for Kuala Lumpur, for example?

Dr. Cosgrove

I am not sure when that happened for Kuala Lumpur. It was probably 1998. It was a small part of the activity because it was one of those instances where the numbers enrolled in the course were small compared to some of the other activities in either Hong Kong or Singapore.

Deputy Rabbitte

Perhaps Dr. Cosgrove could check that and come back to me because I know, as one does in this city, that it goes back to the late 1980s. Who made the arrangements, for example, with Asia Pacific Management?

Dr. Cosgrove

The board of AMP Limited.

Deputy Rabbitte

Who comprises the board of AMP Limited?

Dr. Cosgrove

The board was comprised at that stage of the chairman of the business school and the dean of the faculty of commerce. These people were in charge. There was an advisory board which included other members of the faculty of commerce.

Deputy Rabbitte

Who made the arrangements with the Institute of Bankers?

Dr. Cosgrove

I think that was done through the dean of the faculty of commerce at the time and the professor of banking.

Deputy Rabbitte

When was that done?

Dr. Cosgrove

That pre-dated 1993. My understanding is that it goes back some years, probably to the late 1980s.

Deputy Rabbitte

Were the person or persons who put together the arrangements with Asia Pacific Management and the Institute of Bankers authorised by the university to do so?

Dr. Cosgrove

Yes. My understanding is that AMP Limited was originally set up by my predecessor with a remit to conduct courses both overseas and at home. What surprised most people was the success the company had. Over the period of its existence it contributed approximately £1.7 million to the revenues of the university, which has now gone into the undergraduate school of commerce.

Deputy Rabbitte

I will come to the figures in a moment. I presume there is a minute somewhere in the academic council governing body or finance committee authorising whomsoever was acting in the name of the university to put these arrangements in place.

Dr. Cosgrove

The first minute is dated 1996 when I brought the activities of AMP to the attention of the finance committee. My understanding, before that, is that the officers at the time approved the activities of AMP.

Deputy Rabbitte

Yes, but if we go back to your predecessor's time, you say he put it in place in 1993. At that time, was there express authorisation by the appropriate authority within the college to do this?

Dr. Cosgrove

The courses offered would be approved through the registrar, through the academic council and by the National University of Ireland.

Deputy Rabbitte

Let me put the question to you in a different way then. Were the terms of the contract put in place known to the appropriate authorities within the university?

Dr. Cosgrove

In 1993, I had no evidence that the finance committee was informed of the terms of the contract.

Deputy Rabbitte

Or any other authority within the lot?

Dr. Cosgrove

Yes. At that stage the view was taken that the officers had power to set up the company. Once it was brought to my attention, I instigated the series of inquiries which the Comptroller and Auditor General has outlined.

Deputy Rabbitte

If the academic council had known, and been advised, about the notion of UCD offering B.Scs on a 15 month basis, would it have been concerned?

Dr. Cosgrove

The fact is that the academic council was aware of this. The use of the term "15 months" is somewhat misleading. Students who were enrolled in courses in Hong Kong and Singapore were, first of all, given an exemption from the first year, as indeed some students here would be if they came to us with diplomas from institutes of technology; they would obtain a waiver for the first year. In fact, therefore, they were doing a two year course. In Hong Kong and Singapore they do not take summer or Christmas breaks. If one takes what is happening at home, the courses comprise six semesters, two semesters in each year. If one waives the first year, one has four semesters which can easily be completed within 15 or 18 months by students who are prepared not to take any holidays.

Deputy Rabbitte

What do you mean? Do you think our students are more in need of holidays than students in the Far East?

Dr. Cosgrove

No, I think students in the Far East are far more industrious than our students. That is the secret to it.

Deputy Rabbitte

It would solve many of our space problems if we could put all our people through in 15 months.

Dr. Cosgrove

It would indeed.

Deputy C. Lenihan

John Henry Newman is still influencing the process here.

Dr. Cosgrove

Maybe. It is misleading to suggest that these were, somehow or other, compressed to an extent that was unacceptable.

Deputy Rabbitte

Why is it misleading? It is factual, is it not? They went through it in 15 months.

Dr. Cosgrove

It is factual, as it happens. They covered the same amount of ground, but they did it in a shorter time because, as the Deputy knows, in Hong Kong and Singapore they are anxious to accelerate the process.

Deputy Rabbitte

All right, we will come back to it. Can I come back to this board and this company, AMP? If you have the documents in front of you, I refer you to the Comptroller and Auditor General's supplemental report, for example, page 4. I gather that a firm of accountants was brought in to look at this company and its functioning. Is that right?

Dr. Cosgrove

That is right.

Deputy Rabbitte

When did you, as president, first learn about all of this?

Dr. Cosgrove

About the existence of AMP? I brought it to the finance committee in 1997 and asked for the first audit of the accounts. I was aware of its existence but I was not aware of the extent of the activities in which it was involved.

Deputy Rabbitte

And you were president?

Dr. Cosgrove

I was president.

Deputy Rabbitte

Were your colleague officers similarly ignorant of the extent?

Dr. Cosgrove

I am not sure about that. None of them——

Deputy Rabbitte

But how did it come to your attention?

Dr. Cosgrove

It came to my attention partly through an internal audit. We had had an internal audit in place since 1994. I subsequently established an internal audit committee which investigated some of the issues raised.

Deputy Rabbitte

Had there not been an internal audit committee in the college before you did that?

Dr. Cosgrove

We had an internal audit function but no internal audit committee. That was set up on my advice by the governing authority in October 1997, with two outside people on it.

Deputy Rabbitte

But UCD is a very big business now. You would be lecturing your students on the desirability of internal audits in places like financial institutions and others with which we are familiar, yet, you did not have one yourself. Is that what you are telling me?

Dr. Cosgrove

We were one of the first universities to set up an internal audit.

Deputy Rabbitte

You may have been, but are you telling me that there was not any in UCD before you set it up?

Dr. Cosgrove

There was no internal audit committee until I set it up in 1997. There was an internal audit function which dates back to 1994.

Deputy Rabbitte

The accountants then came in. Let me put to you, very briefly, what the Comptroller and Auditor General concluded in a low key report. The report drew attention to breaches of company law relating to the holding of annual general meetings and company registration requirements. Is that the factual position?

Dr. Cosgrove

That is the position. The note says these requirements were subsequently satisfied.

Deputy Rabbitte

And he found there was a failure to hold regular board meetings and record significant decisions?

Dr. Cosgrove

Yes.

Deputy Rabbitte

Is that a fact?

Dr. Cosgrove

Yes. These would have been described as technical breaches, as I understand it, although I am not an expert in company law.

Deputy Rabbitte

Technical breaches in that there was a failure to hold board meetings and record decisions?

Dr. Cosgrove

Yes; it was a small group, as I understand it.

Deputy Rabbitte

Handling millions of pounds?

Dr. Cosgrove

There was a——

Deputy Rabbitte

They did not hold board meetings or record decisions, yet, with the benefit of hindsight, you think that was a minor technical breach?

Dr. Cosgrove

The word used came from a letter I received from the Office of the Comptroller and Auditor General, which said that these would be considered as technical breaches. That is my memory of it.

Deputy Rabbitte

Is it also true that, as the Comptroller and Auditor General records, there was a lack of minutes recording staff remuneration and course direction payment arrangements?

Dr. Cosgrove

Yes.

Deputy Rabbitte

That is true. There were no minutes saying what staff were paid?

Dr. Cosgrove

There were not, no.

Deputy Rabbitte

A lack of liaison with the university authorities on contracts with third parties, which would culminate in university awards?

Dr. Cosgrove

Yes.

Deputy Rabbitte

Is it not extraordinary that contracts that culminate in university awards were not communicated to the university authorities?

Dr. Cosgrove

The relationship between the board and the university authorities was, I agree, unsatisfactory. Until I learned about it, I was unable to do something about it.

Deputy Rabbitte

Absolutely. I accept that, but I am just trying to tease it out. This is the faculty of commerce that produces our brightest and best in business, and we find that in a whole series of areas they were in breach of company law, until you discovered it. What is the Committee of Public Accounts to conclude from this?

Dr. Cosgrove

The real difficulty was that, in the initial phase, the company was set up somewhat at arm's length to the university, to avoid any risk. One of the penalties we paid for that distancing of the company from the university was a lack of control. We weighed one up against the other. That is the substance of the matter.

Deputy Rabbitte

I am trying to understand this lack of risk. The Comptroller and Auditor General's report records, on page 16, responses from yourself, as Accounting Officer. You are informing him that the relevant student population in June 1997, in the case of AMP, was 3,372, and the associated fee income was £1.1 million. If I wanted to apply to do a B.Sc. in Singapore, how much would it cost me?

Dr. Cosgrove

I am not certain of the figure because we operated on a royalty basis. After all expenses were paid by the operating agency, we received a figure for each student. That is the situation.

Deputy Rabbitte

But this is an approved university course?

Dr. Cosgrove

It is an approved university course.

Deputy Rabbitte

Do you wish to consult any of your colleagues? Do any of your colleagues know how much it would cost if I was a student in Singapore and wanted to do a B.Sc. at UCD? How did they know? Was it advertised in local newspapers?

Dr. Cosgrove

Yes. The annual fee was about £5,000.

Deputy Rabbitte

About £5,000 from which you took a royalty. How much was the royalty? According to the Report of the Comptroller and Auditor General, the numbers in June 1997 were 3,372 and £1.1 million. If £1.1 million is divided by 3,372 it appears to result in approximately £326 per student. Would that be correct?

Dr. Cosgrove

That includes 2,300 with the Institute of Bankers in Ireland. They would be part-time students who would pay relatively little in fees.

Deputy Rabbitte

Who made the arrangement with the Institute of Bankers in Ireland?

Dr. Cosgrove

I think that was done by the professor of banking.

Deputy Rabbitte

When was it done?

Dr. Cosgrove

Around 1989-90.

Deputy Rabbitte

Were the terms of the contract approved by the college?

Dr. Cosgrove

I was not president at the time, so I am not aware if they were approved at the time, but they were subsequently approved by the AMP board.

Deputy Rabbitte

How was it determined what fees did and did not go through the AMP?

Dr. Cosgrove

I think this was determined by the nature of the course itself, whether it would be described as a traditional or non-traditional course. The real issue with AMP was that it should have a flexibility in the delivery of courses that would not be possible in traditional ways and that there should be a speed of response to demand, particularly from sections of the business community. Those courses came under the aegis of AMP. What surprised us was both the success of the company and the level of activity.

Deputy Rabbitte

There may have been an incentive for its spectacular success. We will reserve judgment on that for the moment. Take a sample of what UCD has to offer academically, say the MBA. I know people who have registered in the conventional way at UCD through the commerce faculty and who have paid fees to the bursar's office. Other colleagues are doing it through AMP. I am not sure I understand why some were allocated to AMP while others followed the normal enrolment procedures.

Dr. Cosgrove

Is there not a difference between those on a full-time and part-time basis?

Deputy Rabbitte

I do not know very much about this. I ask questions.

Dr. Cosgrove

A number of these courses given under AMP at home - I am not referring to the overseas courses - are provided in a way that involves evening or weekend commitments, both on the part of the students and staff involved.

Deputy Rabbitte

Subject to verification, you are telling the committee that you think the distinction is that full-time MBA students go through UCD proper while part-time go through AMP. Is that the position?

Dr. Cosgrove

AMP is now dissolved.

Deputy Rabbitte

We are engaged in a historical exercise here. We will look at the current procedures again.

Dr. Cosgrove

Going through AMP is part of a differentiation——

Deputy Rabbitte

I do not want you to commit yourself to an answer, but you might revert to the committee on that point because I cannot understand why certain courses go through AMP for Irish indigenous students while others do not. To understand the figures we must understand what has gone through AMP, because to get £326 per student represents a bad rate of return to the taxpayer.

Dr. Cosgrove

That is probably not an accurate figure if the figures involving the Institute of Bankers in Ireland are removed.

Deputy Rabbitte

I will revert to that and I may ask the Comptroller and Auditor General about it. Real students are involved, regardless of whether the Institute of Bankers in Ireland is removed. The Chairman of the committee recently pursued the Institute of Bankers in Ireland about the courses it provided. We did not hear about this contract. I did not have time to go over the record but perhaps you would tell the committee about it. What are the terms of your arrangements with the institute?

Dr. Cosgrove

As I understand it the course began in the 1980s with the then professor of banking. Its purpose was to provide a qualification to people who formerly would have done bankers' examinations. Some would have completed diplomas or certificates. The amount of direct contact with the campus would have been relatively limited.

Deputy Rabbitte

Did it lead to a degree?

Dr. Cosgrove

It led to the degree of Bachelor of Financial Services.

Deputy Rabbitte

Was it offered on a one and one basis?

Dr. Cosgrove

It was a credit accumulation system where students build up modules over a period of time until they reach——

Deputy Rabbitte

They could get a certificate, diploma or a degree?

Dr. Cosgrove

Yes.

Deputy Rabbitte

How much did they pay to do the degree course?

Dr. Cosgrove

Approximately £900 per student.

Deputy Rabbitte

Was that per annum?

Dr. Cosgrove

No, for the total.

Deputy Rabbitte

For three years at UCD?

Mr. Ceannt

It breaks down into three types of students - certificate, diploma and degree students. Certificate and diploma students would be on the campus for at most one week in the entire year, so their presence on the campus was very limited. Most of their study was done as distance study and in block release off campus. The arrangement between the university and the Institute of Bankers in Ireland was that the fees would be paid according to certain parameters. The expectation was that between 60 and 80 students would graduate every year and that we would be paid a composite fee for them. If you average that out——

Deputy Rabbitte

Of that number of students how many would have started on the certificate course?

Mr. Ceannt

Thousands could start but they effectively worked at a distance taking, if you like, a study pack approach. They did not begin to impact on——

Deputy Rabbitte

According to the president's report for the year 1993-94 - the report may have a later date - there were 4,000 students on that course. Is that correct?

Mr. Ceannt

Some 2,300 would be associated with the Institute of Bankers in Ireland, but we deliberately excluded those from our Higher Education Authority student returns because a student exposed to the college for just a number of days in the year does not equate to a full-time student. When the 2,300 students are calculated on the basis of what we term full-time equivalent students it equates to approximately 70 full-time equivalent students.

Deputy Rabbitte

They paid approximately £925 if they got a degree. Was it arranged that they only paid if they got a degree?

Mr. Ceannt

It was a joint arrangement between ourselves and the institute where, if the figures are averaged out, the institute paid us approximately £900 for every student who got a degree.

Deputy Rabbitte

If I was working in a bank and I wanted to get a certificate or diploma accredited by UCD I would not pay anything for it. Is that the position?

Mr. Ceannt

You would pay the institute, but our arrangement with the institute was that it paid us.

Deputy Rabbitte

I am interested in the public sector side of this. Our job is to try to account for money and so on. What was paid to UCD for those thousands of students who got a certificate or diploma, only a small number of whom went on to get a degree?

Mr. Ceannt

The contractual arrangement was between UCD and the Institute of Bankers in Ireland. We were paid through the institute.

Deputy Rabbitte

What were you paid for the diploma and certificate courses?

Mr. Ceannt

We were paid a composite fee for the total programme, which was calculated on the number of students who came out with a degree, so it is not possible to equate the fee directly with individual students. It was a composite fee with the Institute of Bankers in Ireland.

Deputy Rabbitte

We made a calculation based on the numbers of students involved and it was approximately £925 per student.

Mr. Ceannt

It works out at approximately £925 per student for those students who qualify with a degree.

Deputy Rabbitte

If the amount UCD received from the institute is divided by the number of graduates it is approximately £925 per——

Mr. Ceannt

Yes, if one divides the number of those who qualified with a degree it works out about £925. It is probably fair to state this arrangement is being re-negotiated. We are not happy with this arrangement.

Deputy Rabbitte

I thank Mr. Ceannt. I sincerely hope it is. It is a hell of an arrangement for the Institute of Bankers in Ireland.

Mr. Ceannt

I cannot comment on how satisfactory it is from the Institute of Bankers in Ireland's point of view but it was an arrangement which——

Deputy Rabbitte

Could I be an employee or a bank and obtain a degree in banking in UCD without qualifying for matriculation and meeting entry standards?

Dr. Cosgrove

We have mature student arrangements for a number of students, not only in the banking sector. Most of these students would be in mature years. There are special regulations governing matriculation of students in mature years.

Deputy Rabbitte

What does that mean in this case? If I had taken up employment in a bank and had not matriculated and so on could I, through the Institute of Bankers in Ireland get into UCD and obtain a degree without having the entry qualifications which apply to the sons and daughters of taxpayers throughout the country?

Dr. Cosgrove

Provided one is over 23, which is the same for all mature students, one qualifies on that basis.

Deputy Rabbitte

We have established that we get £925 per student from approximately 80 people. Is that correct?

Mr. Ceannt

It is between a range of 60 to 80 students but it is falling below that range now--.

Deputy Rabbitte

How does that make an impact on the 3,702 students at £1.1 million? Dr. Cosgrove informed the committee earlier that the £1.1 million, which breaks down to £326 per student, disguised the income from the Institute of Bankers in Ireland? However, the income from the institute does not amount to a hill of beans

Dr. Cosgrove

No, I was saying that, included among the number of students, the total of which is 3,372, were 2,300 related to courses run with the Institute of Bankers in Ireland. In other words, the amount of income coming from the bankers is negligible and if one divides the number of students left, which is 1,142, one would get a different average figure closer to £1,000 rather than £300.

Deputy Rabbitte

That is a different construction on it. What was the royalty?

Dr. Cosgrove

The royalty, as I understand it, was about £1,000 for overseas students that would be available to UCD after all expenses had been paid. That was the element of no risk involved. In doing this we were following the example of a number of universities in the United Kingdom and the agency we used in Hong Kong and Singapore, Asia Pacific Management, is also used by some universities in the UK, particularly by the University of Hull. The international programme at Hull was run by the new president of DCU, Ferdinand Von Prondzynski. He said when he was in that area he transferred the business to Asia Pacific Management because it was widely regarded at the most efficient agent in the region.

Deputy Rabbitte

Dr. Cosgrove thinks the agency was charging approximately £5,000 per student and he thinks UCD was getting approximately £1,000. We might have that checked to validate it when Dr. Cosgrove and his colleagues have an opportunity. Does Dr. Cosgrove think that was a reasonable contract for UCD?

Dr. Cosgrove

It was a reasonable contract because all the expenses were taken care of by Asia Pacific Management. The £1,000 was a clear profit to UCD.

Deputy Rabbitte

The Comptroller and Auditor General's report deals only with two years.

Dr. Cosgrove

Yes, today we are only dealing with two years but in the report there are references to the origins of some of these arrangements. I have no doubt some of the arrangements predated AMP. The Deputy mentioned Kuala Lumpur which goes right back to the 1980s. There were arrangements of direct provision in those days.

Deputy Rabbitte

Can Dr. Cosgrove furnish the committee with the student numbers which came through AMP going back to its origins, the fees charged for the course and the fees that accrued to UCD?

Dr. Cosgrove

Yes, there may be variations in this depending on which region one was in. I am giving the figure of £1,000 as a rough——

Deputy Rabbitte

I understand that perfectly, but it would be useful given that there are a number of locations, including Hong Kong, Singapore, Kuala Lumpur, Sri Lanka, Spain and so on, if the committee was provided with a spreadsheet outlining the number of students for particular years, how much money was charged and how much accrued to UCD.

Before I turn to salaries, I was intrigued by a reference to "nil fees" students? What were they before fees were abolished?

Dr. Cosgrove

They were students who would not be comprised within the Higher Education Authority student population. They were students for whom we would not receive any State money to support and, therefore, they were not recorded through the bursar's office. We have since rectified that and all fees now come through the bursar's office. The fees were accounted for through AMP if those are the ones the Deputy is talking about.

Deputy Rabbitte

Did the company furnish year end accounts to Dr. Cosgrove or the finance committee?

Dr. Cosgrove

Yes, from 1996 onwards.

Deputy Rabbitte

Is that since the audit committee was established?

Dr. Cosgrove

Before the audit committee was set up, they furnished accounts to the finance committee.

Deputy Rabbitte

Were they made available to the Comptroller and Auditor General?

Dr. Cosgrove

I think the Comptroller and Auditor General has seen the accounts that were available.

Deputy Rabbitte

But not before then?

Dr. Cosgrove

Yes.

Deputy Rabbitte

Page 2 of the Comptroller and Auditor General's report which covers 1996-97 and 1997-98 provides an outline of the atypical payments that are received. The note qualifying AMP states: "These fees were in respect of lecturing, course direction, examination correction and comprised payments by both AMP and by parties with which it had contracted". In addition to the normal UCD salary, were the staff paid for lecturing by AMP?

Dr. Cosgrove

Yes.

Deputy Rabbitte

However, they were also paid on occasion by third parties?

Dr. Cosgrove

Yes, the expenses for some of the travel, say, to Hong Kong, Singapore would have been paid directly by Asia Pacific Management and they would have been paid some lecturing fees as well by AMP.

Deputy Rabbitte

How much were they paid?

Mr. Ceannt

When we got Chapman Flood to come in and do the financial audit they contacted all the agents for us. The contractual relationship between the agents, UCD and other staff who carried out the courses on behalf of these agents were not with UCD. We had to ask them to provide us with whatever information they could on what UCD staff were paid by these agents. We got as full a breakdown as we thought we were able to get, breaking down who got paid what by the various agents but they were not paid by UCD directly so we cannot fully confirm their accuracy. We were assured that that breakdown of pay is correct

Deputy Rabbitte

Does the range mentioned by the Comptroller and Auditor General include all three factors? For example, does it include the persons who received £51,810 or £50,978 on top of their salaries? Is that inclusive of all three factors, or do we know that?

Mr. Ceannt

To the best of our knowledge we can say it does include all three. It would not include travelling expenses which some staff received. However, it includes all their payments, both for courses which AMP ran directly for UCD and courses which were run by agents on behalf of UCD.

Deputy Rabbitte

Dr. Cosgrove, what did that figure refer to at the time - a senior lecturer's salary compared with £51,810?

Dr. Cosgrove

The person who got £51,000 would have had a basic salary of £37,000 from UCD.

Deputy Rabbitte

Apart from anything else, does this not inspire great envy within the academic campus where people are so notorious for discussing and exchanging views on these kinds of issues?

Dr. Cosgrove

It did indeed. When the extent of individual payments became apparent there was cause for concern. This is in no way to claim that the individual involved did not work to achieve these payments. He worked almost every weekend and evenings. However, having looked at this issue and in light of these payments, the finance committee decided that, in future, any additional payments would be confined to a maximum of 20% of the individual's salary.

Deputy Rabbitte

What is the conventional salary?

Dr. Cosgrove

I think it was about £37,000 or £38,000 for the lecturer concerned.

Deputy Rabbitte

We know of payments of £51,810 on top of that. How many people in the commerce faculty were in receipt of moneys?

Dr. Cosgrove

I think the overall total is 72.

Deputy Rabbitte

Some of which would be quite negligible or small.

Dr. Cosgrove

Some of them would have been £200 or £300. Only about six would have been over £20,000.

Deputy Rabbitte

You have been very indulgent, Chairman, but there is an enormous amount of material which one would need more time to excavate. We may have to come back to this. I do not wish to be unfair to my colleagues. However, it is unusual to discover this within a university and perhaps Dr. Cosgrove would reassure the committee and tell us what has been done to stamp out this practice.

Dr. Cosgrove

We have an agreed code for additional remuneration which was approved by the governing authority. We also have a code for the conduct of overseas courses which was also agreed by the governing authority and which lays down regulations governing all overseas courses. On the other hand, and lest we be too negative, this was an initiative which brought in a great deal of revenue to the university. Like all initiatives there may initially be wrinkles which one did not see.

Deputy Rabbitte

I have to ask Dr. Cosgrove about this because it bowls me over. I do not understand where the great deal of revenue arose for the university.

Dr. Cosgrove

A sum of £1.7 million came in as a direct contribution from AMP.

Deputy Rabbitte

Over what period?

Dr. Cosgrove

Over the period of its existence between 1994 and 1999. Overheads were also paid by the company.

Deputy Rabbitte

That seems a relatively small fraction of the money which churned through AMP.

Dr. Cosgrove

I am not so sure it is if one takes it as a profit. That money is now being devoted towards the provision of new undergraduate facilities at UCD.

Deputy Rabbitte

I am sure it is being used prudently but how many students would pay £5,000 in any year?

Dr. Cosgrove

I would need to check that because there are variations.

Deputy Rabbitte

Dr. Cosgrove has agreed to furnish the figures but it seems that the royalty was derisory.

Dr. Cosgrove

The royalty must be based on a no risk. In other words, a number of English universities had got into trouble with their overseas programmes and had run up significant deficits. The reason for the arrangement we made was that all risks were taken by the company and not by the university. That is the origin of the AMP dimension. This was a new——

Deputy Rabbitte

Is anything similar going on in any other faculty in UCD?

Dr. Cosgrove

Medicine has an overseas college which is a joint venture with the Royal College of Surgeons and we would have a share in the Penang medical college in Malaysia. That was set up to cater for needs in Malaysia whereby they can send their students to Dublin for the first three years of a medical course - the pre-clinical phase - and then they can complete the degree in the environment in which they will subsequently work. That was one of the first overseas ventures.

Deputy Rabbitte

Normal accounting procedures applied in that case and all the rest?

Dr. Cosgrove

Yes.

Deputy Rabbitte

How could senior staff in the commerce faculty devote so much time to these extra-traditional activities and still attend to their first line duties at UCD?

Dr. Cosgrove

They claim that all their normal duties were carried out and I have no reason to disbelieve them. Much of this activity was taken up by short visits to places like Hong Kong and Singapore. They might only have gone out for a week or so, given some lectures and returned. The benefits of this were also seen in that it broadened the minds of those involved and gave them a greater understanding of what was happening in other parts of the world. As I mentioned in my statement, we were encouraged by the Department of Foreign Affairs and people in trade to continue these contacts because, at that stage, there was an Asia strategy in place.

I had a recommendation from one of the reports that we should abandon these courses. I took that very seriously until I weighed up the benefits and disadvantages. We should concentrate on the main issue which is whether these courses are a good idea. Should we be doing them? In April Mr. Hayden and I attended a meeting in Portugal of heads of European universities at which there was strong criticism of most universities in Europe for their failure to involve themselves in these activities and that they were leaving it all to universities in the US, Australia, New Zealand and the UK. Mr. Hayden can confirm this.

One should concentrate on the issue of whether it is a good idea to have overseas courses and whether it is a good idea to tailor business courses or courses in trade union studies to the needs of the market. One is then down to how this can best be done. However, to have stopped doing them would have seemed to be throwing the baby out with the bath water.

Deputy Rabbitte

I will allow my colleagues to ask questions. We are not going to deal with policy here. We have to consider whether it was a good idea to do all these good and worthy things in the manner in which they were done. It seems that the least one can say, whatever about broadening their minds, is that they certainly broadened their bank balances. We will have a look at it when Dr. Cosgrove sends in the documents.

Acting Chairman

It is obvious that we will be returning to this issue and I will recommend to the committee that we revisit it at a chosen time. It is not only a question of the good being done. There is also the question of accountability which is the primary issue for this committee. I will be asking Mr. Hayden and Mr. McDonagh for their observations later because, on the surface, this appears like a cosy arrangement to the public. You have given an excellent explanation of many aspects of the system but our job is to concentrate on accountability. That is why I allowed Deputy Rabbitte to go on a little longer than usual as it was important to put the picture together at the outset.

Deputy B. O’Keeffe

Deputy Rabbitte had a good chase but I wish to be more positive. I spent some time as a lecturer in a third level institution and we are trying to develop international contacts with other universities and interaction with industry. Effectively what has happened in this case is excellent in terms of spreading the international educational acknowledgement of Ireland as a seat of learning. We must welcome the money generated and the experiences which go with it.

Between 1994 and 1998, £1.7 million was generated in profits by this company. It retained £0.4 million but subsequently paid it back to the university. That money has been well spent in the interim. The positive aspects of the campus company have been very fortuitous for education in Ireland, for business contacts abroad and the development of those contacts. Deputy Rabbitte had responsibility for science and technology as a Minister of State and I would have thought he would have been very well aware of this issue.

However, a number of questions arise from this report. What is the overall take in terms of research and development in UCD at present? What kind of money are we talking about?

Dr. Cosgrove

Is the Deputy referring to the overall take for individual staff members?

Deputy B. O’Keeffe

No, overall.

Dr. Cosgrove

From its funded research the university would take in about £15 million.

Deputy B. O’Keeffe

Not an insignificant sum. As I understand it, that does not take from the overall budget received through the HEA.

Dr. Cosgrove

We certainly hope not.

Deputy B. O’Keeffe

So the funding generated from consultancy and research and development is put back into the operation of the college.

Dr. Cosgrove

Yes.

Deputy B. O’Keeffe

What is the level of pupil contact for lecturers? Would it be 14 hours per week? Is there a research and development element to it? What is the overall figure?

Dr. Cosgrove

I suspect it would vary from department to department. In some of the laboratory departments there would be more hours for the students and more hours for supervision by staff. I would not like to give the Deputy an average figure as it would probably be wrong. There are differences in the number of lectures, small classes and laboratory sessions which are given within each faculty. It is usually left to the head of the department to monitor the number of hours worked by each member. These would include normal lecturing and tutorial hours, but also hours when the lecturers would be available for student contact, either in their offices or in laboratories.

Deputy B. O’Keeffe

In the context of lecturers travelling abroad and lecturing outside the campus on company business, were replacement lecturers in place when these people were missing off campus? Were the part-time lecturers paid directly by the campus company? Did it fall as a debt for the campus company?

Dr. Cosgrove

Some of the money generated by AMP's activities was used to employ other lecturers - an extra lecturer in some departments. One can conduct this activity in two ways. If one is doing evening and weekend work, one could employ new people to do it but that would cost quite a bit. It was decided it was better to leverage off current staff for two reasons, namely, it is not as expensive and one does not want courses to be seen to be delivered by grade two lecturers. In other words, if a course is being given in the evening or at the weekend, it makes it much more credible if the people giving it are those who lecture during the day, rather than setting up a special team who only do the weekend or evening lectures. There was no specific replacement. As I understand it, arrangements were made that if someone was absent his or her teaching would be taken by some other member of staff during that absence.

Deputy B. O’Keeffe

Is Dr. Cosgrove quite satisfied that happened?

Dr. Cosgrove

I have to believe the heads of departments and deans when they tell me this is happening.

Deputy B. O’Keeffe

Is there any relationship between the role of a head of department as a director of these overseas consultancy operations and his or her role as head of a department? In other words, is the same figurehead involved as head of this company and head of the department or has the initiative been taken by someone else within the department?

Dr. Cosgrove

It is not necessarily the same. Most of it is under the general direction of the dean of the faculty who would be in charge. Heads of departments might be directors of programmes or they may have people in their departments who are directors of programmes. It is up to them to certify, and this is the new arrangement, that any work they undertake is in addition to their normal duties. In other words, in light of the events we have been through, the new policy clearly states that people will not be paid for additional work unless it is certified by the head of department, or in the case of a head of department, by the dean, that they are performing all their normal duties. Only in those circumstances will they qualify for additional remuneration.

As I pointed out in the European report on lifelong learning, this is a Europe-wide problem. If one wishes staff to engage in non-traditional posts, particularly outside normal hours in the evening or at weekends, there must be some system of remuneration to encourage them. If we are serious about lifelong learning and we do not want to take people out of the work force, we should face up to this and recognise that payments must be made as an incentive.

Deputy B. O’Keeffe

I accept that and it is happening on every third level campus. Where did the Higher Education Authority see its role in terms of monitoring and approving MBAs, diplomas or degrees? Was the Higher Education Authority satisfied with the content and context of the courses offered? Was there any stage at which it felt there could be greater interaction between the university and the HEA?

Mr. Hayden

Up to 1997 the authority certainly considered that any new courses introduced by universities should be discussed with it in advance. The question did not arise as to the award to be made as that has always been a matter for the university.

The question did arise as to any resources which might fall to be met out of the State grant or any additional resources in respect of a new course, or if there would be an undue increase in numbers in an area which one would not wish for. For example, new courses in law in the 1980s and 1990s were looked at very closely.

Colleges told us when they were introducing new courses. UCD told us that is was proposing to introduce certificate and diploma courses involving the Institute of Bankers. It was made clear that demands on the facilities of the college were minimal. I can recall from discussions with the registrar that the course involved only three weeks on campus out of the total three or four years. The rest of the course was taken at a distance through notes and correspondence. The Higher Education Authority did not fund that kind of activity as it was seen as a kind of adult education course which was not fundable from the third level grant. However, once we were satisfied it would have no implications for the funding of the college and might yield a profit for the college, we were satisfied it could go ahead with that type of course.

The same applies to any kind of earnings. I was not aware of many of these arrangements but we knew courses were being provided for students abroad. The college always put those in through the registrar's department at the time. Once we were satisfied there was no financial implication for the college, either for its grant or its overheads, we were happy to see this happen.

There is a history of support from Government for this kind of commercial development of education. There are also educational benefits for the institutions involved. We were satisfied they did not have implications for the State grants for which we were responsible.

Deputy B. O’Keeffe

And had no significance for the numbers coming through the system?

Mr. Hayden

No, as the president said, the numbers on these courses, or on the extra-mural courses, do not enter into the funding formulae we use for deciding the grant.

Deputy B. O’Keeffe

Having put in place all the positives can I ask the Comptroller if these third level institutions are encouraging the development of campus companies? It may be appropriate at this stage to look at the situation whereby regulations and controls would be put in place on a national basis. If, for instance, UCD generates £15 million per annum on consultancies, UCD generates in the region of £13 million. The CID in Cork generates approximately £8 million or £9 million per year. This is now big business. Is the Comptroller and Auditor General satisfied that we need a national system of regulation and control which would impinge on all third level institutions involved in what I would regard as a very progressive venture for such institutions?

Mr. Purcell

As I said in my opening remarks, I have no problem with what the universities are doing in relation to overseas courses, courses relating to business and getting involved in consultancies. These are matters of policy and one can see their merits. I was taking issue with the way in which the policy was implemented. As far back as 1997, a report on the education sector generally made it clear that standard rules for the conduct of extra curricular activity, whether by way of lecturing, consultancy or research and so on, should be controlled, not in a negative sense but by way of a framework which would facilitate the orderly development of aspects such as business and overseas. Clearly that was not happening and it should take place across the board. UCC was an exemplar in this regard. It seems the university threw up its hands, so to speak, because the issue was too cumbersome to control. There were certain rules in relation to the establishment of the salary scales for academic staff in universities which talked about 20% of time. That factor was taken into account in determining the salaries of academic staff. Regard was not had to whether this aspect was being adhered to.

Early this year procedures were implemented in UCD. I have seen the directions and, in due course, my officers will examine to what extent these are being complied with. We are talking here about what was a total lack of control. We are not questioning the validity of the policies, to which we would all subscribe.

Deputy B. O’Keeffe

I accept that. However, the kernel of the problem is that significant funds are being generated by third level institutions. I am asking the Comptroller and Auditor General if it is now timely to set national guidelines in terms of campus developments and their controls so that this will not come totally within the remit of each university or institute of technology, that there would be a scheme by which they would have to abide and that everyone would be responsible in a co-ordinated fashion throughout the country?

Mr. Purcell

I do not think anyone could take issue with the sentiments expressed by the Deputy. However, one must have regard to the different nature of campus companies. Some of them are at arm's length from the university to cut down on risk and so on. In some instances campus companies deliver catering services to the universities and in other instances they are being used as vehicles for tax and other purposes to develop accommodation and residences for students and so on. When we talk about campus companies we must be clear about the different nature of these companies. It would be an advance if there was much more clarity in relation to them. When we get to that stage, it would be appropriate to set up a framework. I agree with the thrust of what the Deputy is saying.

Deputy C. Lenihan

Like Deputy O'Keeffe, I am tempted to accentuate the positive aspects in that the university is involved in generating revenue. This means academics getting out of their ivory tower and into the real world of industry. Trading in the international community would give the stuffy image of academia a good reputation.

I am intrigued at the promotion and ranking of MBAs in world terms as being the USA, UK, Switzerland and France, or what is the order?

Dr. Cosgrove

It depends on the criteria. The Financial Times ranked the UCD school ninth in Europe and ninth in the world outside the USA, but first in the world for value for money.

Deputy C. Lenihan

For the participants?

Dr. Cosgrove

Yes.

Deputy C. Lenihan

Over how many years was that ranking achieved?

Dr. Cosgrove

That was achieved last year.

Deputy C. Lenihan

How long has the programme been in place?

Dr. Cosgrove

The programme has not been in existence for long. The business school only took off approximately 12 years ago.

Deputy C. Lenihan

Within 12 years we have got to No. 1, which is pretty good.

There is a considerable element of import substitution involved here. When I worked in industry I was sent on a course to INSEAD, which cost in the region of £8,000. Can you give any indication of the element of import substitution involved? When I was doing my business course, very few good courses were being run in Ireland.

Dr. Cosgrove

That is true. We are now in a position where our reputation is growing and is being recognised internationally. Many of the business community are anxious to make use of the facilities at the graduate business school. It was suggested to me that we should try to mount a distance learning course in conjunction with an American partner and have worldwide availability. The reputation of the school is growing. The fact that it was given accreditation by the European EQUIS group and, given the fact that it is the only faculty of commerce in Ireland to achieve such accreditation, is another endorsement of it.

Deputy C. Lenihan

You suggested earlier that there would be a 20% limit on what they can earn over salary. That is a bit harsh because if one is good at lecturing and fees are available to be collected, charged and profit to be made——

Dr. Cosgrove

I see the Deputy's point.

Deputy C. Lenihan

There is a staff retention issue here because I presume many people lecturing in business faculties have much larger temptations outside of academia. Is there any way you can move that upwards? I am not in the Pat Rabbitte energy department when it comes to people earning money if they have worked hard for it.

Dr. Cosgrove

First, the 20% is unfair in the sense of the higher the income, the more it will amount to. A professor getting 20% is earning more than a lecturer getting 20%.

Deputy C. Lenihan

This is out for a younger more enthusiastic academic.

Dr. Cosgrove

The 20% is incurred on the amount of salary earned from courses in UCD. It does not take from the fact that there is still available to people a percentage of their time which they can spend outside on consultancies.

Deputy C. Lenihan

In external consultancy work?

Dr. Cosgrove

Your general point is correct. If the best people do not come to the universities there is not much use having them. We must recognise the reality of the incentives outside. It is difficult to get staff to remain in faculties such as commerce and, to a lesser extent, engineering. We must balance that against the requirements for control which the Comptroller and Auditor General has pointed out. It is a balancing act. On the one hand there is the public pay issue and on the other there is the issue of incentives for people to come to work in universities and to stay there. I am not saying there is an easy solution to this question, but it is a balancing act.

Deputy C. Lenihan

I presume the person who earned £50,000 on top of the £37,000 did a fair amount of work for that.

Dr. Cosgrove

I would have thought he was literally working day and night.

Deputy C. Lenihan

So it was a younger person who wanted to make a name for himself and earn a few quid. I am curious about the academic profile of the commerce department and the academics delivering the external programmes. How many of those would be involved in the private sector irrespective of their lecturing duties?

Dr. Cosgrove

Some would and some would not. Many are in demand.

Deputy C. Lenihan

Taking the benchmark of board membership, how many are involved?

Dr. Cosgrove

Many would be involved in a number of boards and would signify such. Much of this would not be paid board membership. A number would be consultants to particular companies or whatever. There is no doubt that there are opportunities outside. Let me put it this way, I am a medieval historian. People do not come rapping on my door saying a medieval historian is required on this or that body. A graduate of the faculty of commerce - I have two sons who are graduates - is more likely to be approached with outside offers and told that his expertise might be a help in a particular business. This is a big issue. University salaries are common across all faculties. This has been established by unions etc. In a market position the medieval historian, unfortunately, does not command as much as the graduate in commerce. We must face that reality too.

Deputy C. Lenihan

Oddly enough I would be critical of the academic set up here. There has not been enough involvement by the commerce and business faculties in actual board membership. In the United States one sees a very strong cross-pollination between the two. I would like to see more of this. If you have any figures relating to board membership and consultancies by members of the commerce department, I would be interested .

Dr. Cosgrove

I will certainly try. I will send them to the committee rather than to one Deputy. Is that what I should do?

Deputy C. Lenihan

That is fair enough.

Deputy Rabbitte

As long as they do not conduct the board meetings like these guys do. That would be a marvellous idea.

Deputy C. Lenihan

In relation to courses which pay £1,000 in royalty, is that pure profit?

Dr. Cosgrove

Yes, it is pure profit.

Deputy C. Lenihan

Are lecturing fees outside this completely? It was an effective 20% profit?

Dr. Cosgrove

Yes. It was a 20% profit and at no risk. That was the situation. That is why it was not quite such a bad deal as it might seem.

Deputy C. Lenihan

The royalty fee was up-front before a single student was enrolled. Is that right?

Dr. Cosgrove

There were various contracts involved. The figure of £1,000 should be taken as indicative.

Deputy C. Lenihan

It was done on enrolment. Once you were in, the money went straight back into the UCD bank account.

Dr. Cosgrove

Yes.

Deputy C. Lenihan

That is very interesting. What was the sequence of events? Was it set up in 1994?

Dr. Cosgrove

AMP was set up in 1993 and formally incorporated in January 1994.

Deputy C. Lenihan

Was it to be at arm's length to allow it to be more flexible in the launch phase? It was then claimed that there was no lever of control as it became more successful. It is now back——

Dr. Cosgrove

The company is now dormant and in the process of being wound up. There are now much different arrangements. We learned lessons from the experience. I stress that this was an initiative taken only by UCD. No other university was getting into this area. I can understand, perhaps, why. We should not let the initiative go unrecorded and unpraised. It was a very good initiative. If we have learned something from it, we should develop the initiative. My own view is that some of the other universities - this has been suggested to me by one head - might get together with us on this and do something on a joint basis with regard to offering courses overseas. We are way behind the rest of the world on this, certainly the United States, Australia, New Zealand and the United Kingdom. This is something from which the Government, the country and the universities might benefit.

Deputy Cooper-Flynn

I am delighted at the way in which the latter part of this debate has proceeded. It has brought some balance into the topic. It is important that the wrong impression should not be given outside that we are not trying to promote and encourage this type of activity and to recognise the benefits in academic terms and in terms of the image of the university.

The company was set up in 1994. Why are we only discussing it at this stage? Dr. Cosgrove mentioned in his original comments that UCD provided all the information for the Comptroller and Auditor General. Was all the information provided by UCD or was there another source? Perhaps this question should be directed to the Comptroller and Auditor General.

Mr. Purcell

We had already had a general concern in this area. This is expressed in a report on the education sector laid before the House early in 1998. I signed that report in September 1997. I do not see where else we would get the information if we did not get it from the people we were auditing and I fail to see the relevance. We did some digging ourselves but had to extract the information at times. Let me leave it like that.

Deputy Cooper-Flynn

I was just wondering what prompted the paragraph. Why the timing?

Mr. Purcell

It was not the easiest extraction of information we have had.

Deputy Cooper-Flynn

I was curious about the timing aspect, given that the company was set up in 1994. Why did it take so long for it to be discussed at a meeting?

Mr. Purcell

Over the last few years - I have mentioned this at previous meetings - we have been in discussion with the universities and the Higher Education Authority about harmonising the accounts and bringing the accounts of universities up to what I would regard as a satisfactory standard. In the context of these discussions I was anxious that the ancillary activities of wholly owned subsidiaries and subsidiaries not incorporated as companies be reflected in the new form of accounts for universities. All these things were happening at the same time. The discussions go back to the time when I was first appointed as Comptroller and Auditor General. I could be said to have a bee in my bonnet about this issue.

Deputy Cooper-Flynn

That is fair enough.

Dr. Cosgrove

We share that concern. We have been to the forefront in arguing for consolidated accounts.

Deputy Cooper-Flynn

When the Comptroller and Auditor General says this was a painful extraction of information, is he saying he did not receive co-operation when he sought the information?

Mr. Purcell

A university is a very big place. Sometimes it is not as easy to get information as it would be in a Government Department, for example, whose officials would be more familiar with the activities of the Comptroller and Auditor General and his staff. It is necessary to look at the way in which the audits of unversities are carried out. The governing bodies of universities have an audit carried out on their behalf by commercial firms. Under the Universities Act, 1908, the statutory auditor of NUI and its constituent colleges, as they were at the time, is the Comptroller and Auditor General. In order that we would not duplicate the work already carried out by the external auditor to the governing body we are selective with regard to what we examine. We have full access to the external commercial auditor's papers. In the past the external auditors' papers - I am going back ten or 15 years - were invariably taken as satisfying the requirement. In more recent times - I am talking about the last seven to eight years in particular - there has been a recognition on our's and everyone's part that the needs of public accountability require that more be done. We tend to do more now in universities than we did hitherto. It has taken time for the penny to drop, not particularly in UCD but generally in the university sector. It has been a learning process all round.

Dr. Cosgrove

Most of the information contained in the Comptroller and Auditor General's supplementary report is derived from reports commissioned by me, the finance committee or the internal audit committee in UCD. I regret any difficulty in extracting information. In some instances we were sensitive to certain indiviuals concerned. That was our only concern. If there was any reluctance, that was the main reason for it. All the accounts of AMP have had a formal Revenue audit and been cleared.

Deputy Cooper-Flynn

We also welcome the fact that UCD has set up the audit committee. That is an important point. In his report, the Comptroller and Auditor General highlights the academic reputation which might suffer on foot of the association with some of the ventures. In your opinion, has there been any adverse effect as a result of this company being in operation, either on the image of the university or the performance of the academic staff?

Dr. Cosgrove

I cannot see any, because the unit costs for commerce post graduate taught courses are lower than the average of those of other universities. The international recognition of the business school and the faculty of commerce suggests that the opposite is the case and that the reputations of the faculty and business school have been advanced.

Deputy Cooper-Flynn

That is welcome news. The Comptroller and Auditor General referred to unforeseen liabilities which might arise for UCD as a consequence of its participation. It is stated in the reply that no unforeseen liabilities have occurred to date. Are you happy that UCD was not at risk at any time under the structures put in place?

Dr. Cosgrove

I am happier with the new arrangements. One of the reasons my predecessor took this route in 1993 was precisely to avoid any risk of liability occurring if a course was not run because the cost outweighed the fees. We were not ever at great risk in this regard. The measures I took subsequently were clearly designed to minimise any future risk involving these courses. I am pretty confident on this issue.

Deputy Cooper-Flynn

We are discussing this matter because of the success of the company and its operations. If the reverse was true we would not discuss it.

On lecturers' contracts, is it the case that a lecturer can do as much private consultancy work as he wants? Is there any limit on this?

Dr. Cosgrove

As the Comptroller and Auditor General said, private consultancy work is dealt with in the Devlin Report which dates back to 1983. It sets a limit of 20% of time or, in medical terms, two sessions of private work. My permission must also be obtained. I have written to all members of staff asking about the private work they are undertaking as I have to formally authorise it.

Acting Chairman

How is it that these people earned more from this work in 1996-97 than they did from their ordinary salaries? Where does the 20% come into this?

Dr. Cosgrove

We should not confuse 20% of time, which is what Devlin was talking about, with the policy adopted by the governing authority, which is that extra income should not exceed 20% of normal income.

Acting Chairman

I will come back to this point later.

Deputy Durkan

When did Dr. Cosgrove first become aware of the practices in relation to courses available overseas and the AMP arrangement?

Dr. Cosgrove

I became aware of it around 1996. I was aware that the courses were in existence but I was not aware of the basis on which they were run. I did not become aware until quite late, of the size of some of the individual payments.

Deputy Durkan

Were you aware of the scale of the operation?

Dr. Cosgrove

We had audits from 1996-97 onwards but they were bulk audits, in other words, the fees to individuals were not specified. The first time I asked for fully audited accounts to be produced for the Committee of Public Accounts was in late 1997, which is when I became fully apprised of the situation.

Deputy Durkan

Would it have been unusual in the ordinary day to day running of the university to ask for audited accounts?

Dr. Cosgrove

The question which arose was whether AMP was conducting what might be considered an ancillary or non-core activity or whether it was conducting what is regarded as mainstream academic activities. I did not think it came under ancillary activities, even though it claimed to be a company at arm's length from UCD and that, therefore, we should bring it much more closely in under the university's academic wing. It was in that context that I requested audited accounts in 1997.

Deputy Durkan

Did the Universities Act, 1997, bring it into focus?

Dr. Cosgrove

It brought it into focus for me because it made explicit my position as accounting officer with full responsibility for the university. I was conscious of this in the aftermath of the Act.

Deputy Durkan

Section 25 of the 1997 Act provides for the payment to the employees of universities of such remuneration, fees, allowances and expenses as are approved by the Minister for Education and Science. It also provides that in cases where a university departs from the levels of remuneration, fees, allowances and expenses approved by the Minister it may only do so in accordance with the framework agreed between the university and the Higher Education Authority.

Dr. Cosgrove

An interim framework has been put in place but it is of fairly limited application. The Higher Education Authority takes the view that the framework should cover unusual remuneration for an individual. It argues that the question of fees, allowances, etc. is covered under section 24 which states there should be paid by universities to employees such remuneration, fees and allowances approved by the Minister subject to subsection (5), the framework section, and that the university should be paid fees and allowances, approved from time to time by the Minister for Education with the consent of the Minister for Finance.

Deputy Durkan

Section 24 does not come into it at this stage as it is subject to section 25. Does the Higher Education Authority agree that this section was included in the universities Act for a purpose?

Mr. Hayden

Yes, it is the framework section.

Deputy Durkan

Did the Higher Education Authority make specific recommendations when the legislation was being drafted?

Mr. Hayden

There was much consultation during the drafting of the legislation in regard to the rates of pay, etc. Since the 1970s this was a matter for discussion between the university and the Department, with the authority acting as an intermediary. That arrangement still exists.

There was also the issue of statutory staff in the university. They were subject to statutes which were laid before the Dáil and they had to sit there for a certain time before they came into force.

Deputy Durkan

Was the Higher Education Authority aware of the practices, referred to in the Comptroller and Auditor General's report, in this university or other universities? If so, did the Higher Education Authority make its imprimatur on the 1997 Act?

Mr. Hayden

Since the 1970s, the Higher Education Authority has had discussions with universities and colleges regarding the levels of pay, number of permanent staff, etc. Obviously the people involved would have seen how things were changing, not just in universities but in other organisations.

Deputy Durkan

Is it accurate to say the Higher Education Authority was aware of the practices which had been established and were evolving at that stage?

Mr. Hayden

In case I am misunderstood, I wish to make it clear that we were not aware of the extent of AMP's operations. We could not be comfortable with the level of payments to staff. We could see the merit in it, but clearly it is not our responsibility. Under the Act all remuneration, pay, fees, expenses, etc., have to be approved by the Minister for Education and Science and the Minister for Finance. That exercise, which is both exhaustive and exhausting, is nearly finished. The Departments will make up their minds on it shortly. That is the cornerstone of desirable control from the State's point of view. The Higher Education Authority would see merit in the action taken by UCD since the extent of the operations of AMP became known to the president and the officers. The HEA, as I stated in writing to the Comptroller and Auditor General, would not have liked this kind of operation to have been phased out because of the problem with AMP.

The Higher Education Authority is glad that the internal audit of UCD played an important part and I am sure the Comptroller and Auditor General's staff is also. We emphasised the importance of internal audits to the colleges but even before we did so, the larger colleges had set up a very important internal audit structure with outside involvement, whether it is an audit company or members of the governing body. We are working with the committee of heads of Irish universities because this is an important development for the whole system. We have commissioned a distinguished accountant, the former president of the Association of Accountants in Ireland, to conduct a study of what principles should apply to controls and internal audit structures and to recommend appropriate arrangements. This is important not only for a body such as the Higher Education Authority but also for the Department of Education and Science and other interested parties. What verification should there be? What means is there to ensure that internal audit procedures are applied without going into the nitty-gritty of how an institution is operating but so that you are certain the procedures laid down are being acted upon? We intend, together with the committee of heads of Irish universities and Dr. Cosgrove, to have a report on that by the end of March, which we would be delighted to discuss with the committee.

Deputy Durkan

When did you first become aware of the activities of AMP?

Mr. Hayden

I became aware of them when the Comptroller and Auditor General's office contacted us in this regard in 1998. It was soon after their investigations had started. I may have been aware of them some weeks before that.

Deputy Durkan

Arising from what?

Mr. Hayden

Perhaps arising from contact with UCD. I genuinely cannot remember. I had no reason to believe the extent of this until we had extensive discussions with the Comptroller and Auditor General's office on a number of occasions after that.

Deputy Durkan

Were you aware of the scale or degree of activity prior to 1998? In reply to an earlier question you stated you were aware of the existence of some such arrangements. You had no difficulty provided there was "no financial implication" for the institution concerned. Is that accurate?

Mr. Hayden

That was in the context of the arrangements with the Institute of Bankers. At the end of the 1980s the college wrote to us saying it was working out an arrangement with the Institute of Bankers but that it had no implications for the grant which we provided. Large numbers of students would be facilitated in this way who otherwise would not have had a chance of receiving a qualification. I was not aware that this was dealt with, at any stage, through a subsidiary company of the university.

Deputy Durkan

I am a little concerned about the implications of that reply. It may have been given in a different context from that which I believed it to be but you said "no financial implication for the college". Could that be taken by a college, not necessarily this third level institution, as receiving an imprimatur to proceed in a particular fashion provided it did not involve any financial liability for the institution?

Mr. Hayden

All these matters - the functions of a university, its aims and objectives - must be read taking into account the Universities Act. No one could say a university is being given carte blanche in that regard.

Deputy Durkan

Surely the role of the Higher Education Authority would go beyond ensuring there was no financial liability either for the institution concerned or for the State?

Mr. Hayden

We have a number of functions. The grant which we are paid through the Department of Education and Science is for specified purposes, perhaps general purposes but certainly for the purposes of higher education and we must ensure as far as we can that it is used for those purposes. At the same time, the emphasis has always been on the courses provided by the colleges in the normal way by attendance either full or part time at the campus of the university. That has been the emphasis for many years. We would see our grants being used for that purpose.

Deputy Durkan

How does the Department of Education and Science feel about the existence of an arrangement or arrangements that might or might not be approved but could be seen to be operating with the approval of the Higher Education Authority and ultimately the Department?

Mr. McDonagh

The Department would be concerned to ensure that any activities engaged in are in conformity with the requirements of the Act and, particularly, if sanction is required it must be sought. In a general context, weaknesses have been identified in this regard but an important comfort to be derived from this report is that there is an internal audit system in operation in the institution which appears to have been robust enough to identify to the management of the institution that these activities were taking place and it brought to the attention of management the fact that certain action needed to be taken.

Deputy Durkan

I accept they were found in this case but how long were they in operation before the internal audit discovered them?

Mr. McDonagh

It will always be the position that an internal audit will not immediately identify weaknesses in every area. Part of an internal audit unit's operation would be to draw up a programme of internal audit visits. Generally those programmes would be drawn up in what are seen as major risk and minor risk areas. It may well have been that it has identified a number of areas in its programme. It is the same in the case of the Comptroller and Auditor General. He might not necessarily identify a weakness in a Department in the year in which it occurred. It may be several years after it has happened that it is discovered as part of a rolling audit programme. However, we can take comfort from the fact that there is an internal audit system in place that has identified this.

On the general issue of third level institutions being engaged in activities such as this, the Government's policy is quite positive as regards third level institutions being involved in commercial activities and traded services in education. That is underpinned by the fact that there is an international education board Ireland, which is grant-aided by the Department of Education and Science, to encourage and help this kind of activity. There are definite benefits for Ireland, not only monetary, but in terms of profile reputation. I suspect and there may be evidence to show that in the context of industrial development and the attraction of foreign companies this activity can help reputation.

The only caveats I have in this regard, which are generally shared by those looking at financial controls, are that the activity should not have an adverse impact on the duties of the staff involved to the university's core programme and the students themselves - in other words, they should not be engaging in the activity to the extent that it impacts severely on their performance in their core educational functions in relation to the institution's activities; and that there should be no cross-subsidisation of activities from core funding. We expect all direct and indirect costs to be met and that there will not be cross-subsidisation from core funding for, let us say, the running of the home programmes.

In this context, reverting to the idea of campus companies, Deputy O'Keeffe raised a pertinent issue on which I have had discussions with the HEA. We need to conduct a study of issues relating to campus companies with a view, more or less, to identifying the activities being engaged in; the difficulties, if any, in relation to these activities, having regard to the issues of transparency and accountability; the framework we need to put in place, and the code of good practice, if any, needed to inform the activities of all the institutions engaging in this activity. We will probably engage consultants or undertake a study of our own in collaboration with the universities and other third level institutions. What we have seen here today only underpins the need for us to do this.

Deputy Durkan

Were you aware of these practices prior to their disclosure in the internal audit?

Mr. McDonagh

No. I was not aware of them, even from the internal audit. The protocol is that internal audit reports are made available to the Comptroller and Auditor General. Generally, they are not made available to outside management control authorities. The rationale behind this is that the internal audit function could be, let us say, weakened if an internal auditor was of the view that his or her reports would be made available outside the institution, other than to the Comptroller and Auditor General. In general, therefore, it is not the protocol to make them available to outside authorities.

Deputy Durkan

I agree with the Comptroller and Auditor General and others that what the Comptroller and Auditor General described as extra mural activity is necessary, useful and beneficial. I also note your references to the need for control and regulation. The Comptroller and Auditor General said that while a framework contemplated by section 25 of the Universities Act is under discussion between all the universities and the HEA, it has not been agreed. Are you aware of this? Why has it not been agreed?

Mr. McDonagh

It is my understanding that an interim framework, which is fairly limited in scope, has now been agreed.

Deputy Durkan

Why would it be limited in scope?

Mr. McDonagh

It is a framework for departure from——

Acting Chairman

The Deputy should give Mr. McDonagh an opportunity to answer the question.

Deputy Durkan

I accept that and I do not want to delay the meeting——

Acting Chairman

I am only asking the Deputy to allow Mr. McDonagh to answer the question.

Deputy Durkan

It is difficult to get to the answer to the question, particularly if the reply is very long. I am not being derogatory; it just makes it difficult for the questioner, and I know that Mr. McDonagh would not want to do that.

Mr. McDonagh

No. A framework has been agreed which allows departures from the provisions of the section dealing with the sanction of the Minister for Finance in very clearly defined circumstances relating to university pay. Effectively, it allows a university to recruit, let us say, high flying academics who otherwise would not be attracted to it. I do not think there will be a problem in making it available to the committee. I have a copy with me. It is very clearly defined and applies in very limited circumstances. It is also very important in the context of watching for any spin-off in terms of relativities and knock-on effects for public service pay to which it has regard.

A second framework is being considered in respect of which work is ongoing in collating information. It relates to pay arrangements in corporations or campus companies. It is my understanding that it is intended to develop a framework for these also.

Deputy Durkan

The Department of Education and Science and, ultimately, the Minister have a function in the approval of the payment of fees additional to those ordinarily applicable in a university setting. Is that true?

Mr. McDonagh

The Minister has a function in the sanctioning of pay, allowances etc., but not in relation to the framework, which is a matter solely between the Higher Education Authority and the universities.

Deputy Durkan

Will the Higher Education Authority come in again on the framework?

Mr. Heyden

As Mr. McDonagh said, a framework has been agreed which allows departures from levels of remuneration etc. for university staff for work in the university. This is seen as an exceptional measure for exceptional people whom Mr. McDonagh described as academic high fliers. It is not seen as a way of making up for the difficulties in the market for academic staff generally.

In regard to corporations, that is, companies and so on, we are working with the universities. We want to see which corporations are involved to assess the implications which might arise from any framework. The framework contemplated by the Act has not yet been agreed.

In regard to the framework which allows departures from normal levels of remuneration, whatever is approved must be contractual in nature. A person cannot join the permanent staff of a university under this framework, he or she must do so under contract. Existing staff may also come under the framework, but only under contract. While we realise that in certain ways this may not be seen as satisfactory, there is a review clause. This is the first such framework to be brought forward since the enactment of the legislation in 1997.

Deputy Durkan

The Comptroller and Auditor General stated:

The Higher Education Authority has informed me that the framework has been drafted after consultation between the universities and the authority. It is currently being considered by the universities, six of whom have agreed to it while a favourable response is expected shortly from the seventh.

Why were negotiations not conducted between all the universities at the same time? One presumes that——

Deputy Rabbitte

It is a bit like Florida.

Deputy Durkan

Hand counts.

Deputy Rabbitte

The recount.

Mr. Heyden

They are very much seven autonomous institutions, which combine very well on the conference of heads of Irish universities, but, with the HEA, each of them must agree to the framework. The legal interpretation we have received is that if one of them does not agree to it, it cannot be brought into operation.

Deputy Durkan

I do not want to delay the meeting, but there are many other questions that I would like to pursue. However, it is obvious that I will not have an opportunity to do so today.

Acting Chairman

We will return to this issue. Let me place this examination in context. What we are examining is a supplement to the report of the Comptroller and Auditor General dealing with Advanced Management Programmes UCD Limited. We are not checking the output of the university. Our driving factor is accountability and value for money. There might have been a suggestion, not from the left but from the right, that our questions contained an element of begrudgery. It is our job to examine, and to take the report of the Comptroller and Auditor General as our guide. It is not begrudgery. There were obvious weaknesses in this company, which ceased trading in 1999, but the questions asked were legitimate, and things have changed.

It is important to emphasise that nobody here is questioning the benefit on the teaching side of the work that was carried out. Nor are we trying to decide policy. It has been suggested, again by our own side of the House that we might have been doing that. We are not.

In the medical field, there is the common contract for consultants. That is accepted, even though it might have weaknesses. There have been attempts to change that. However, there is no similar mechanism for the education field. We are told that people should earn only 20% over their salaries for private work, but in at least one or two instances, maybe six or seven in the years 1997 and 1998, they exceeded their salary and earned 120% or very near it, according to the figures we were given. It is important that we question that and that there should be no repetition because of the possible knock-on effect for personnel in other areas. It is important that we spell out these issues. It is not an attack on UCD. Its high status in the business world generally is a matter of record and that is not being questioned. However, our job is to question the methodology and financial aspects of the work being done. We have done that fairly.

Of primary importance is that the system has changed. I suggest that the Comptroller and Auditor General's examination and his recommendations may have helped to achieve that. I presume Dr. Cosgrave would have wished to have it on a better footing, and he responded very speedily. We are dealing with fact not fiction, and we are dealing with this supplement which is very important.

That is not to say people are against the concept of the campus company. As has been said by others, it is up to the Higher Education Authority and the Department of Education and Science to get that side of it right. However, there are questions, some of which have been answered. We may not have been too happy with some of the answers, but there is more information to come and I will be asking the Comptroller and Auditor General to come back to the committee on this. We will be considering the HEA's report, which is due in March. I suggest to my colleagues that we should revisit this in April when all of the information is available.

Deputy Rabbitte, in particular, requested various facts and figures concerning work that was done abroad. When we have these we can make an enlightened judgment on what did or did not happen. There were areas with which we were not happy. That somebody was working every weekend and every night is not conducive to good teaching. I do not care what anybody says. We would try to discourage excessive overtime in any industry because people cannot deliver after a certain number of hours. That is the basic policy driving trade union requests for salaries and everything else. It is not good enough to say somebody earned £50,000 because they were willing to work every weekend. Something has to suffer. It is ludicrous to suggest that that is okay if somebody is young, ambitious and willing. It is not good for the State. We cannot prove it would adversely affect the return for money spent by the Department, but I suspect it would. We are entitled to question that without being accused of begrudgery. That is our job.

Questions were asked. Deputy Rabbitte got a longer run than usual time-wise for the specific reason that this was a complex situation with aspects that had to be tied into the big picture. The people who put the questions have left, but that was the reason for extending the opening series of questions.

I will be proposing to my colleagues that we revisit this in April, on a suitable date after the Higher Education Authority has delivered its recommendations. I was going to ask Mr. McDonagh if he was happy with the salaries aspect, but Deputy Durkan anticipated those questions and has dealt with that.

Mr. Purcell

The Chairman summed up very succinctly. The basis for some of my concerns related to the academic side. I refer to the academic reputation of the college, of the research output of the college. Some questions about that were raised by a high level academic committee which was asked to look into this within the college. I have no particular knowledge of these matters. However, when I see an eminent committee produce a report which sees this as a problem I feel it my duty in the scheme of things to put those concerns to the President as accounting officer. He has responded fully to that.

In regard to the point made by Deputy Durkan and addressed by the Higher Education Authority and the Department with regard to the framework, I would make the point - and it is in the subtext here - that there would be no point in having strict controls on basic pay and none on additional remuneration earned by an employee in the course of that employment. That is the point I am trying to make. I am not trying to split hairs as to whether a framework should cover a particular situation. One can get lawyers to tell one thing or another in regard to whether it should or not. However, I take a common sense approach to these matters and that would have been the basis for my concern in that area.

Acting Chairman

Have you any comment on the general account?

Mr. Purcell

No. The emphasis was on the supplement, the accounts for the two academic years ending September 1997-98. There is a clear audit report on them. I refer to the comprehensiveness of the fixed asset register. That is being done. The affluxion of time has helped in that regard, and UCD is taking that matter seriously.

Deputy Rabbitte

I support the Chair's suggestion that we would come back to this in April and thank him for pointing out to everyone concerned that this committee is about accountability and value for money. Nobody questioned the virtue of promoting Ireland's academic reputation abroad, but that is not our business. This is not a policy committee. This is to measure whether we got value for money. I do not wish to comment further than that.

I would make one final point on the academic reputation. Dr. Cosgrove assures us in good faith that the devotion of so much energy, time and travel to the functions of AMP did not impact on the teaching hours or academic reputation of UCD on the basis that he was assured by the heads of the departments concerned that this was the case. However, the heads of the departments concerned seem to be the people who were involved in putting AMP together in the first place. I would like time to think about the significance of that.

Deputy C. Lenihan

Since some of the Members who were being positive about this development are now absent, let me say that despite the managerial failures which were identified by UCD, we regard the return of £1.7 million on the programme as spectacular in terms of the money spent. It must be remembered that there was a zero investment at the beginning of this. Certainly it is a spectacular return by any yardstick given that there was no investment cost for the college. If you do not get value for money profits are what normally count.

Deputy Rabbitte

What do you think it cost the taxpayer to follow the commerce department of UCD?

Deputy C. Lenihan

I am not getting into a debate with Deputy Rabbitte.

Acting Chairman

Most certainly not. Members can have a chat over lunch on that one.

Deputy C. Lenihan

The accounting fact should be put on the record that there was an investment return of £1.7 million——

Acting Chairman

It should be put on the record that this committee has in the past, in its examination of the higher institutes of education, encouraged the aspects of research and development to gain finances and has made it clear it supports the concept of taking in money. We are questioning the mechanism here and I have already put that on record as "no" and it has been changed.

I thank Dr. Cosgrove and his staff, Mr. McDonagh and his staff and Mr. Hayden and his staff for their attendance and their clear answers and their agreement to supply any material that might be outstanding.

The committee adjourned at 1.22 p.m.