A Forth Valley College (FVC) project saw £76,000 of public funding paid into non-college bank accounts, prompting a police investigation, an audit has found.
A review of the institution’s 2022-23 accounts by Scotland’s auditor general has revealed the details of the Fuel Change project’s “series of failings”.
FVC says it has made significant progress in “strengthening the processes for college-run projects”.
Fuel Change, which started in 2020, is described as “an apprenticeship challenge aimed at solving climate-related issues”.
Between 2020 and 2023, it received over £1 million of public cash – £811,000 from the Scottish Funding Council, £100,000 from Skills Development Scotland, and £126,000 via other public sector grants.
The audit found that staff involved in the Fuel Change project knowingly did not follow the college’s financial protocol.
In September 2022, it was agreed that ownership of Fuel Change would be handed over to its project director, Jennifer Tempany, and consultant David Reid of Paradigm Futures Ltd.
At the time, Ms Tempany was the college’s director of strategic partnerships and regional economy.
The transfer would officially remove FVC from the arrangement. However, this change was delayed.
Then, in November 2022, it came to light that contracts had not been properly drawn up for project spending totalling more than £900,000.
A supplier had also been appointed without competition.
Internal investigation prompted call to police
During April 2023, the college raised concerns over invoicing arrangements that involved £76,000 of funding bypassing FVC and being deposited into accounts overseen by Ms Tempany and Mr Reid.
FVC began an internal investigation and consequently reported the matter to Police Scotland.
The police said it was “clear there was a mismanagement of funds but
no way to prove any criminal intent.”
Ms Tempany was suspended and later dismissed, while the college “cut ties” with Mr Reid.
Ms Tempany took FVC’s management board to an employment tribunal last year, claiming unfair dismissal, but the judge ruled in the college’s favour.
According to the audit report, the pair “continue to run the project under a different name and within a new entity.”
College ‘did not manage finances properly’
Stephen Boyle, auditor general for Scotland, said: “Forth Valley College did not oversee and manage the finances of the Fuel Change project properly, and this led to significant failings.
“The college has since taken action to minimise the risk of these failings happening again.”
He continued: “There are lessons to be learned for other colleges and public bodies, who need to make sure they can manage the risks associated with involving external bodies in projects.”
Abhishek Agarwal, chair of Forth Valley College’s board of management, said: “The college is aware of the Audit Scotland S22 Report and has worked closely with Audit Scotland in terms of the content of the report.
“The Audit Scotland report also recognised the significant progress we have made in strengthening the processes for college-run projects.
“These improvements are designed to minimise the risk of similar issues arising in future, and we remain fully committed to regularly reviewing these arrangements to ensure they remain robust and fit for purpose.
“The external auditor’s Annual Report for 2022-23 also concluded that – with the exception of the stand-alone net zero project – the College has effective arrangements in place for financial planning, governance, and performance management.
“For clarity, the stand-alone project is no longer connected to the College and has been operating as a separate entity since June 2023.”
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