Tuesday 25 April 2017

DIT forced into range of cuts after it lost €718K in prepaid fees to online library

SWETS collects academic journals from around the world and offers universities access at a fee Photo: Depositphotos
SWETS collects academic journals from around the world and offers universities access at a fee Photo: Depositphotos

Katherine Donnelly and Chai Brady

DIT lost about €718,000 after a UK-based library subscription service, called SWETS, which it had prepaid, went into administration in 2014.

DIT told the Irish Independent that the losses forced a range of cost-cutting measures, but that it did not impact on student services.

SWETS collects academic journals from around the world and offers universities access at a fee.

Fianna Fáil education spokesman Thomas Byrne said with no bailout to DIT in order to protect other academic services from the cuts, the savings must have "sweated other programmes across the college".

DIT, like other Irish higher education colleges, signed up to SWETS UK through a centralised procurement service within the sector.

The Higher Education Authority (HEA) investigated the DIT loss in 2015 and a spokesperson said the HEA acknowledged that the loss was unfortunate and outside of its control as the company went into administration.

According to the HEA, other Irish colleges that had used SWETS lost varying amounts of money depending on the option taken to prepay, but DIT lost by far the most significant sum.

DIT now adheres to tighter procurement guidelines and, on the advice of the HEA, protects itself against exposure in the case of all large-scale contracts by insuring against default.

However, while it insures against potential loss, it also adds significantly to DIT's costs.

The following year the university paid €763,000 to a new supplier.

Problem

President of DIT Professor Brian Norton said that institutions across the world were affected, with the University of Durham in England losing "well over €1m".

"This was an international problem; this was a major international supplier to this sector and they simply had no assets left to recover. No one received money back at the end of the day," he said.

The Public Accounts Committee also questioned Waterford Institute of Technology president Professor William Donnelly, who misinformed a 2015 committee about his relationship to the company Feedhenry.

He had been a director in the IT company for a year starting in 2010 but said he had forgotten at the time of questioning, adding that he was there in relation to a "totally different issue".

The company was set up in WIT by Prof Donnelly and a research group, and used WIT's IP address.

Sinn Féin TD David Cullinane questioned Prof Donnelly about the profits he personally made from shares in Feedhenry, which came to €1.3m when the company was sold for €64m. WIT was awarded about €1m after the sale.

Prof Donnelly defended the processes behind the creation of the company within WIT, saying any conflict of interest was properly managed.

He called on the HEA to appoint an international expert to independently "carry out a complete review of all interactions around Feedhenry in the period it was spun-out to the time that it was sold".

Irish Independent

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