Probe focuses on firms linked to institute's ex-boss
Companies provided services on WIT campus
EDUCATION Minister Ruairi Quinn's statutory inspection of the embattled Waterford Institute of Technology is centring on companies linked to its former president, the Sunday Independent can reveal.
"Specific issues relating to six private companies" linked to the former president, Professor Kieran Byrne, are being investigated by an ex-chairman of the Revenue Commissioners, Dermot Quigley. He is due to report back to Mr Quinn by the end of March.
Mr Quigley has already submitted his first interim update to Mr Quinn about the college's relationship with a number of private companies linked to the provision of services on campus including "student accommodation, recreational facilities and a retail outlet".
Outside consultants Arthur Cox and Grant Thornton have also been engaged to assist the college in its attempt to "regularise" its relationship with these companies.
According to documents seen by this newspaper, Prof Byrne – who was not reappointed in 2011 after his office was embroiled in scandal over lavish expenditure by his office – was a director in all of the private companies and "deemed to be chairman of the boards".
He resigned from each of the boards when he left office.
According to a special report by the Comptroller and Auditor General (C&AG), the controversy at WIT centres on the lack of State financial oversight or control over "six companies providing campus services to WIT and two other related companies".
Much of the focus is on WIT Diverse Campus Services (DCS Ltd), into which the profits of the other subsidiaries are fed at the end of each year.
The C&AG reported that DCS Ltd received €3.37m in "respect of student registration and bank concession fees" but that the "financial statements of DCS Ltd and its subsidiaries do not form part of the accounts of WIT and are not audited by me".
That company's last accounts relate to the year to June 2010, when it recorded a profit of €2.12m.
The C&AG added: "Cash balances held by DCS Ltd are not reflected in the institute's cash balances."
The C&AG also specifically mentioned that the current president of WIT, Dr Ruaidhri Neavyn, "did not accept a directorship of any of the companies following his appointment in May 2011".
Recent correspondence from the secretary-general of the Department of Education, Sean O Foghlu, to the Dail's Public Accounts Committee (PAC), reveals concern about the current position of these private companies.
Mr O Foghlu wrote: "WIT commissioned Grant Thornton and Arthur Cox to advise on options available for the regularisation of the relationship. As part of this process and as options to regularise the situation were being considered, specific issues relating to the financial position of the companies have arisen."
However, Mr O Foghlu called on the PAC to "await the outcome of the statutory inspection" before it considered the issues any further.
A spokesperson for WIT said: "WIT continues to co-operate with Mr Dermot Quigley's inspection but is not in a position to comment currently as his work is ongoing."
It has been learned that Dr Neavyn told the C&AG that WIT does not prepare accounts incorporating DCS Ltd as the company is "independent of the institute and not controlled by it".
Attempts to contact Prof Byrne this weekend were unsuccessful.
Several senior figures at the college this weekend insisted that there was "nothing sinister" about the nature of the investigation and that the college was working "flat out" to ensure that the accounts of the private companies were brought inside the remit of the institution.