 Can I welcome members of the press and public to the 17th meeting of the Public Audit Committee in 2015? Can I first of all ask all those present to ensure that the electronic items are switched to flight mode so that they do not affect the work of the committee? Colleagues, can I refer you to agenda item number one, which is a decision in taking agenda item number one in private? The decision is that are we all agreed? Colleagues, can I move to agenda item number two, which is the section 22 report, the 2013-14 audit of Copebridge College? Can I welcome our first panel of witnesses? Can I have a large panel this morning? Firstly, can I welcome Pauline Docherty, Paul Gilliver, Thomas Keenan, Carol McCarthy, David Craig and Ralph Gunn, former members of the college remuneration committee? As we are extremely tight for time this morning, I would first of all move into questions. I just advise you that this will be a very difficult session to manage, given the numbers that we have here. I just clarify the way in which we should take this forward. If there is a particular statement made by a member of the previous remuneration board, perhaps we can continue and we will not need further interjections from other members in that respect. First of all, and this is for any member of the board to answer, but can I refer you to the meeting that took place in January 2013? I know that some of you may have not been in attendance for that meeting, but I understand that there was a difference of opinion at a further stage in terms of the minute of that meeting in October 2013. Can I just ask if any member wishes to refer to that? I will probably kick off. I was at the meeting in January 2013 and I was at the meeting in October 2013. My recollection of the meeting in January 2013 was that we talked in some detail about a severance package for the principal. We were considering getting into the measure. It was clear that we had to start thinking about voluntary severance schemes. At the time we were given information about what was happening in the sector, we were told that the Edinburgh scheme that was in place for the three colleges in Edinburgh was the scheme that was used by most of the sector. We were given some information about what other principles were leaving with the principles that were already left. My recollection of the meeting was that we agreed the principal's package and said that we would want to implement the Edinburgh scheme in the future. When we decided that it was appropriate to create a voluntary severance scheme that was applicable to all staff, we had a start and finish date. At that time, we had not seen the Edinburgh scheme that was not available to us at the meeting in January. I cannot remember exactly when it came out, but it was emailed out to us at some later point, somewhere between January and October. Just before Ms McAfhey, did you oppose the record of the minute in January 2013? Yes. Was there any other members of the remuneration committee that done likewise? I opposed the convener. You just confirmed the record then. I opposed the minute convener. That was the minute of the 28th of January meeting of the remuneration committee when it was put up for approval at the October meeting. I just ask that it is for reasons similar to Ms McAfhey's. My reason was that I wanted to see equal access to voluntary severance for all staff, and the introduction of an executive scheme would not permit that. You might have read the official report from our evidence session with Mr Doyle last week. Mr Doyle made it clear that, during that entire year, he took no involvement from Mr Doyle either in the remuneration committee or any discussions concerning his particular package. Can I clarify with the members of the remuneration committee whether there are any discussions with Mr Doyle concerning the severance package, either formally or informally? Would that be the same for all members of the committee? Could I put a caveat in there, which may help you? Following the January meeting, Mr Doyle received an offer. The offer would seem at this stage to have contravened the guidance in the Scottish Funding Council. Mr Doyle was the accounting officer for the college and, therefore, once he was aware of the details of any offer made to him, Mr Doyle should have come back to the board and indeed reported it to the funding council, as well as his responsibility under the memorandum. Mr Doyle was obviously in that position, but he was made clear to them that he did not have a future at the college. As part of that process, you had to consider, as a remuneration committee, how that would be taken forward. Can I say to you that the timeline is fairly important here? In January of 2013, the board agreed to go into a merger of the colleges in Lanarkshire. At that time, Mr Doyle had written a letter that I do not have in my possession, but I have seen it suggesting that that would potentially make him redundant as a principal. Given that it was a three-college merger, then there was every possibility that that may well occur. Following that, the chair had called a meeting. I had been in New Zealand at the time and I was phoned and he asked me about what the situation was in relation to the principal and the principal's concerns. I gave him advice to make sure that it is within the sector norm and complies with all guidance. That was advice that I had given him. In the January time, Mr Doyle was in a position where he potentially could apply for a post in New College Lanarkshire. The subsequent information that I have seen suggests that this happened some six months later. At that time, we were in a merger process. As far as I was aware, Mr Doyle had the ability to apply for a post. I just clarify that for the sake of everyone's clarity. There were no informal or formal discussions with Mr Doyle. He did not pass in the corridor and said that he heard that there was a possibility that I could be moved on. I am concerned about the proposed package. There was no discussion with him whatsoever. No members had any conversations with him in that respect. I will clarify the advice that was provided by, and I understand that Lawrence Hills attended the Mineration Committee meeting. Is that correct? In October 2013, he attended the board meeting. He attended the board meeting. Are you aware of the clear guidance that was given by the Scottish Funding Council that any package that has been proposed should be agreed by both the external and internal auditors, or should be at least brought to their attention? We discovered that there were guidelines, but only in October 2013. Scottish Funding Council guidelines? As the Mineration Committee members, we obviously have a very important role to play here as part of the colleges. Surely there should be guidelines out there of some kind as part of the process that none of the members ever think. It is our responsibility to at least ensure that that guidance has been placed before us. That is what we did. We asked about the norms in the sector. We got information about what was happening in other colleges. We were told that Edinburgh voluntary severance scheme was a good one. Who told you that? It was the chair who chaired the remuneration committee. That is what we were told at the remuneration committee and given information at the remuneration committee. What kind of information was it? It was about other colleges in the sector. Was that a paper? It was a piece of paper. It came to the remuneration committee about other colleges. We looked at norms in the sector and other colleges. We talked about value for money. We talked about making sure that there was a payback and a reasonable time scale. We asked those kinds of questions at the January remuneration committee. At the time when Lawrence Hills came along to the meeting, the board meeting, after the remuneration committee, where we had a much longer discussion about the minutes of that meeting and absolute clarity about what we approved and what we did not approve, I believed that Lawrence Hill was concerned about a senior management severance package that he was not happy with. We said that there is no senior management severance package. Everyone who is going to leave from the senior management team will leave under the new college Lanarkshire scheme. In terms of the information that is provided to you, it was all provided by the chair in the written form of a paper, but there was nothing that made it explicitly clear to you that the external and internal auditors should be made aware of any severance packages. We also made aware of the correspondence exchanges that take place via the Scottish Funding Council. Lawrence Hill exchanged a number of emails with Mr Doyle and other members of the college, including Mr Gray. Were you made aware of those exchanges where Mr Hills was making it explicitly clear what was expected of the college via the Scottish Funding Council? I was aware that there was correspondence from Lawrence Hill. The exact content of the correspondence was not made available to me, but there was a reason that I had a good reason to know that. The reason I had a good reason to know that was that both Mrs McCarthy and I were on the Merger Committee. We attended the Merger Committee in September 2013, and at the Merger Committee in 2013, the question of severance payments had arisen. Mrs McCarthy and I agreed to a scheme for 13 months pay for all staff members within Cobridge and the wider area. I had been a company to the meeting by a senior member of staff who was aware that there was a scheme that I did not know existed. I went back to the college and I had written a briefing note. It was taken by the board secretary and circulated to the board member, which I said that I wished a report to go on 23 October to the remuneration committee and indeed the board to deal with the issue of a 13-month severance. That was the issue to the board. A matter of four weeks later, in 5 February, I received a telephone call from Mr Maguire, who was the principal to designate the new college, and he brought to my attention the issue of due diligence. He said to me that there was a contingent liability in due diligence of a significant sum more than I would have anticipated. He immediately rang the alarm bells with me. On Saturday, I thought long and hard about it. I thought, what did I not know and what am I going to do about it? That was the thrust in the matter. I thought about it on Sunday and on seven minutes to one on Monday morning, I sent an email to Mrs McAfhey, saying that I was extremely worried that I had been misled in some way. I was very, very concerned that we had been misled and arranged to meet with the deputy principal on 7 October to find out what was going on, because the due diligence report told me that information coming from the college to the auditor had to be on some legal basis or factual basis, or it would not have been in due diligence. I met with the deputy principal and at that meeting I was shown a letter that was dated on or around 8 February. The letter of 8 February highlighted clearly that there had been an offer to senior managers. That offer, in my opinion, did not correspond with the Edinburgh information. It was a letter that essentially said, if you do not see a place of yourself in the new college, then you will get a 21-month pay-off, irrespective of length of service or anything. I was more than upset when I saw the letter. I took it up with a board chair because I was unaware of the contents. It had significant implications, particularly for the merger, because it was a wrecking ball for the merger. The 86 staff out of 1,000 could potentially have a severing scheme, and I would stress to you that it was not a severing scheme, because a severing scheme presupposes a number of things that folk have to apply and that have to be approved. It also has to be in the interests of the Mer's College. Following that, I understood that Mr Howells was pursuing the college. I was pursuing the college. I was absolutely incandescent that we should have been put in this position. As a part of the due diligence process, quite properly, trade union representatives were at the meeting. When they heard that senior staff in Colbridge College had a different severing scheme from them, it went absolutely ballistic. I cannot say I blame them. I am sitting there as a board member knowing that I had never seen this. I never approved it and never considered it to be a part of a severing scheme. It caused a good deal of problems. As I said, I spoke to the chair, I wrote to Paul and, irrespective of the involvement of Mr Howells in relation to the senior staff severing scheme, when it went to the remuneration committee, it was removed, but it had a number of impacts for the future. I cannot be more candid than I have been today. I appreciate that, Mr Keane. I just asked one final question. I understand that the director of finance made contact with Mr Doyle's payment to the back's payment to 25th. Did you give authority for that to be made to be processed? No, I think that it would be quite helpful for the background. Due diligence showed up three things. It showed up an amount of money, which I understood to the board had approved, which was at around two years. It also showed up a pension payment of £91,000, which I quite frankly did not understand. It also showed up a payment, which is essentially in lieu of notice. When I went to the remuneration committee, I spoke at length, particularly about the lieu of notice. There has been a lot of information put to this committee about who said what to when. The plain fact is that, when we went into the merger in January, potentially there was no place for either principle A or principle B. When we confirmed that we were going back into the merger in 6 August, there was clearly a principle designee that either had been appointed or was in the process of being appointed. The merger process went quite far down the line with new college Lanarkshire. Therefore, as soon as we agreed in 6 August to get into an extraordinary merger, Mr Doyle was effective. I think that it is a pretty clear question. I am asking you, did you arrange? So, effectively, I understand that the representation made to you, via the director of finance, is the succeeding chair. Just to clarify for the interview. I am sorry that we were sitting. In terms of you, you succeeded in the chair from Mr Gray. You hear the question first. Following that, there were representations in an email of what some form understand. I am not sure. Let's just clarify this. The representations made to yourself should this payment be made to Mr Doyle. At that point, you understand that you may have been concerned about some aspects of this. I am only asking the question, I am not asking you to qualify. Did you advise the director of finance that the payment should be made? Yes or no? That version of events is not quite right. I am sorry to labour. Did you arrange for the payment to me? No, I think that I need to qualify it to give it. I am sorry. Can you be assistive? I will not be enough to choose. How I knew that there was a problem was that an email went on 24 October from the funding council to the chair. I then received a copy of all the correspondence between the funding council, the former chair and Mr Doyle. My position, and this may be debated, was my position, and I think that I have got documentary evidence that would back that up, was that I was coming in the chair when they both left. I phoned the director of finance, and I certainly discussed with the director of finance the elements of his severance payment. The element of his severance payment that it gave me most concerned was the £91,000. Two days before it, I had been at a meeting where a board member approved a payment unanimously in the order of two years, accepted that the position in relation to the six months was a contractual and legal obligation. Therefore, on that basis, I did not insist that Mr Doyle's severance payment should be stopped. Thank you very much. I feel that I have read so much about you. You are almost like characters in a novel coming to life here today, but I am grateful for that. Last week, John Doyle in response to a question, I asked him and I quote, there were no voluntary service severance applications prior to 31 October. If there were no voluntary service applications prior to 31 October, why were you discussing Mr Doyle's voluntary service application presumably on 28 January? I can explain the situation and I can clarify a couple of things that will be very helpful. The committee considered Mr Doyle's request for a severance package. So he requested a severance package? He wrote to the chair and the chair held the meeting. Now, in terms of the number of severance packages before 31 October, the situation was that new college Lanarkshire had a scheme, which was open to all staff and it was based on 13 months pay. A number of co-bridge staff applied for it and a number of senior managers, in fact none of the senior managers applied for it at that time. Forgive me if I have got the figures wrong, but there are some like 30-odd staff applied and they were released as and when the business needs a new college Lanarkshire, with most of them going in 2015. The answer to the question, there was a voluntary severance scheme open for staff members in co-bridge as part of the merge process and there were a number of people applied, but there were no payments made as far as I am aware and this is to the best of my knowledge until 31 October. Only Mr Doyle before 31 October. Can you confirm that Mr Doyle applied for a voluntary service application scheme to be considered by the remuneration committee on 28 January? Were your deliberations on that day in response to Mr Doyle asking about voluntary severance? Did he apply? That day, the remuneration committee was focused on a letter that had come from the chair saying that his position was no longer tenable, that it was likely that he was going to have to leave within the near future and that we needed to talk about a severance package for the principal. At that meeting, we also said that if we are going into a merger, there is going to have to be a voluntary severance scheme for all the staff and that is when we talked about the Edinburgh scheme as well. John Gray, you agreed to a one-month salary for each year up to a maximum of 21 months. That was agreed on 28 January. You also agreed to extra three months' pay for successfully taking them through the merger, which two weeks later you opted out of, plus another six months. If Mr Doyle did not apply for voluntary service, was that brought to your committee by John Gray, the chairman of the board? Yes. The discussion about the severance package was two years that we discussed 21 months' pay plus three months' pay to take them into a merger, not about six months' notice at that stage in January. Did you agree in January that the principal would get 21 months' pay? Yes. Based on the information that we had on what other principles we were leaving within the sector and based on the Edinburgh scheme, 21 months' pay. Well, last week, the Scottish funding council confirmed that the guidance was issued, which we would have seen Mr Doyle get 12 months. The guidance was issued by them in January. Mr Gray and Mr Doyle both had that guidance, which would have been 12 months rather than 30 months' pay. What information were you given at that meeting or prior to that meeting to ensure that you had the Scottish funding council guidance? That is what we are really interested in. The Scottish funding council guidance, what information were you given in order to make that decision, which is the reason that you are all here today. What guidance were you given at the committee or before the committee that should have ensured that Mr Doyle's payments were kept within the funding council guidelines? I just say that Ralph Gunn and David Craig have both written evidence to the committee, which I am grateful for. I would particularly like to hear from them, because I think that my understanding is that you were not given that guidance from the funding council. We were not given funding council guidelines. We were told about the norms in the sector. We were given information on other colleges. We were told about the Edinburgh scheme, which was later posted out to us. We talked about the Scottish funding council. We asked what connection there was with the Scottish funding council. We were told that there had been meetings with Mark Bathill and someone else at the Scottish funding council. That is what we were told. We never had their guidelines in front of us. The fact is that we have to establish here that the Auditor General's report talks about information being withheld. The fact is that you came to a decision on the basis of the information that you had. The voluntary service decision that you came to was much more generous than it would have been had you had the guidance from the funding council. Do any of the members of the Immuneration Committee sitting here today feel that your information was withheld from you in order that you made a decision to have a more generous payment to Mr Doyle? Mr Staran, it seems to me that we had incomplete information. The minute records that the chair confirmed that he had spoken to Mark Bathill, the chief executive of the funding council, and that those discussions were in line with the funding council's guidance on severance arrangements for senior staff. Is it fair to say that if you had the Scottish funding council guidance that you are aware of now, you would not have agreed to give Mr Doyle 21 months plus an extra three and an extra six. Would you have kept within the Scottish funding council guidelines, had the chair or the principal of the college ensured that you were given that information? It is not possible to answer that just now, because the funding council guideline still talks about discretion and business cases and different things like that. It is almost impossible to answer that question with hindsight now. We thought that we made a reasonable decision based on the information that we had and based on the questions that we asked and the conversation that we had and the information that we had in front of us. I do not doubt that, but the Scottish funding council guidance is for 14-year service 12 months pay. You agreed to 21 months pay plus an extra three plus an extra six. It was much more generous than the funding council guidance, so would you not have had the funding council guidance? Would you not have said, okay, here is the basic guidance, which was 12 months instead of 30 months? That is the critical question that I want to ask today. Would you have made a different decision had that guidance been available? It is difficult to talk for everybody, but on a personal basis, if I had had guidance in front of me that said something markedly different from what we eventually decided, I would not have made the decision that we did make. I am speaking personally. The Auditor General talks about withholding information. Is that a fair assessment of the situation? With hindsight, yes, but at the time we did not know that there was anything like that. The information that we were given was more up to date in terms of the Edinburgh scheme had 2012 on it and the information that we had about the rest of the sector. Was it John Gray who put forward, who developed and put forward to you the severance terms for the principle that you agreed to on 28 January? Was that developed and put forward to you as a package by John Gray in agreement with the principle? Proposed by the chairman and agreed by the committee? I cannot answer that. Proposed by John Gray? Yes. So when he proposed it, did he say that he had been discussing it with the principle in advance? Not to my recollection. Was the information—was the decision that you made conveyed to the principle after your meeting? Obviously, yes. Does the answer to that? Because he got a letter offering him a severance deal. Well, honourable. So he got the letter right after the meeting? That would be consistent with the letter that went to the senior staff, which was honoured after the February. Can I just clarify a couple of things that you have all just described? Firstly, last week in evidence, John Doyle said that there was a college intranet and that he had, or his office, had made sure that the funding council guidance that Mary Scanlon is referring to was placed on the intranet. Were you made aware of that at the meeting on 28 January? We were not directed to the intranet. If Mr Doyle seriously thinks that, to advise committees appropriately, we should go to the college intranet, then, quite simply, that is nonsense, and I repeat that it is absolutely nonsense. If there is information that should be made within our aim to make— Obviously, you will understand from a committee point of view that we are just interested in the facts. The perspectives on all this, I understand, and you have laid that on the record, so we are grateful for that. Can I clarify, Mr Keenan? I think maybe, Mrs McArthur, you said this earlier on. I just want to get this absolutely right. You said that there was a letter from Mr Doyle, which we have not seen, asking to go and therefore asking the Renumeration Committee or the board to consider a voluntary package. Could you just clarify when that letter was written and when you saw it or if you saw it? It is a long time ago. I am almost sure that it was pre-remuneration committee in January, where that is what led to that remuneration committee in January, where the principal felt that his position was no longer tenable. It was a letter that he sent to the chair, John Gray. Did that letter get tabled at the Renumeration Committee? It was sent out beforehand. There was a note that was sent prior to the meeting, suggesting that the principal would no longer be looking at the future with new college Lanarkshire. Mr Craig, was that note from the chair? That was from the chair. It was sent to all of you as members of the committee. What did that note say? I do not have it in front of me. I am sorry, but I think it said that the principal had decided that his position was not tenable and that he had to go. He circulated the letter and a commentary. I hope that the attach does not come as a shock. For me, it was almost inevitable. The meeting of the remuneration committee followed that letter. That is very fair. Reading a minute of the 28th of January, would you now consider that that minute hardly does not even recognise that point? It seems to be quite important that you would have had a note from your chair in relation to the future of the principal, and that would have been, as a word, the main reason for the remuneration committee meeting on the 28th of January. The minutes do not even reflect the fact that that note exists. I know that it is two years ago and so on and so forth. I recollect that the chairman opened that meeting by saying, I call this meeting to discuss severance terms for the principal. That is all your recollection of how that went on. When you got into that discussion on the 28th of January about the terms, again, was it the chair of the committee, the chair of the board, who led that discussion? He proposed, Mr Gray proposed the terms that would apply to the principal. As you have clarified for Mr Scanlon, at no time were you given the very clear guidance from the funding council in relation to one year as opposed to two and so on and so forth. And during that meeting, were you told that the only way a college could pay for this, above the moneys that would be coming from the funding council, was from your own resources? You were told that. Did you ask for a business plan? Again, were you conscious that the funding council's advice, clear guidance, is that for any agreement, financial agreement, above that that's going to be funded by the funding council, there would need to be a business plan? We did not have the advice and we did not ask for a business plan. So when we move forward to the October meeting, again, and I was interested in Mr Kenan's advice about that earlier on, was the business plan presented at any time in relation to not just the principal's package but other packages as well that he was being asked to agree to? No, because we weren't going to ask to agree to any other packages in October. We had already agreed to create a voluntary severance scheme with new college Lanarkshire, so that was what was agreed. We weren't agreeing any other packages, then people have to apply to the voluntary severance scheme and that's when their cases are considered. Did you consider that it might have been appropriate to have had a business plan just to give you some context as to the financial liability that you might be entering into at that time? No, but we did talk about the financial aspects and the fact that we had reserves that covered the difference between what the funding council would pay and what the college was then paying. That's very fair. Was it suggested to us last week that those additional resources to be used for these packages would come from commercial income that the college generated? Was that, again, something that you were conscious of? I would not like to place emphasis on that. My view of commercial income was that it went into the common reserve, which was applied in the charitable objects of the college. I would not make the distinction. How would you assess the financial packages that were going to be paid for? Where was the money going to come from? The only package that was going to be paid for that we knew about, for which we had a defined liability, was the principal severance package. We did not have a defined liability for any other package. We did not have any other package that we knew about. As chairman of the finance committee, I would have wanted a costing of any other proposals. If the money to pay Mr Doyle's package did not come from the funding council, or it only came from the funding council up to a certain level, and it did not come from commercial income in any other way, it must have come from just college resources. It came from the common resources that the college used. The common resources that the college used would normally pay for things that would go on in classrooms to help students. Thank you very much for that. Can I just ask one final question about confidentiality clauses? Was there any discussion about confidentiality clauses at the Renumeration Committee in relation to the principal or any other members of staff signing such confidentiality clauses? No, I can indicate to you that, in relation to principal, absolutely not. In November 2015, I saw guidance from the new college Lanarkshire because the college solicitor had asked me the position in relation to the withdrawal of the severance scheme to the senior staff. I got a response back because the college solicitor was keen for a compromise agreement. However, a new college Lanarkshire is a matter of policy implemented, as I understand it, and I have a memo somewhere confirming that all the people that went went to compromise agreements. Mr Keenan, you said earlier on to the convener that you would raise some substantial concerns in, I think, September of 2013—correct me here if I got that wrong—in relation to what you then began to understand was potentially happening in relation to severance payments. You are obviously sitting with the memorandum that I sent to the funding council. I think that you should correct it to read 7 October, and that is the date that I found out, which was the day of the due diligence. I accepted the letter that Mr Steven had sent and suggested September. Did you get a response directly to the funding council directly to you? To some parts of the correspondence, but not at all. But there was an exchange between you and the funding council after you gave them your concern and provided them with your concerns on 7 October? No, I will be very clear. I never went to the funding council. The funding council were at the meeting. The funding council were at the meeting in relation to due diligence, and it may be quite a tricky point to get, but I will do my best to get it across. The committee obviously had concerns. The committee saw a different contingent liability from what it expected, and I saw a different contingent liability for what I expected. What I expected was a contingent liability in relation to the college principle. What I saw was much more than that. That comes to the heart of the matter. It might be the heart of my immediate concern. When I read the guidance at a later stage, it became apparent to me that the college accounting officer should be informing the funding council if there is anything that is materially different from what was the norm. Mrs Scanlon indicated what the norm was. It really worried me because I was thinking, why does the funding council not know? The only reason it did not know was the weren't told. There was a parallel process. I was, as a born member, very concerned about the position of all the guys around this table, including myself, who have always acted in a very open, very diligent manner. Up until this situation arose, we would all say that there were no problems. Corporate governance was good, audit was good, people did their jobs and everything was good. I recognised in the 7th of October that there was a major issue irrespective of the funding council. I did not know exactly what they were doing, but I know what I did and I know what the board did at the remuneration committee. When they became aware of things, we didn't need to sit there as passive, as quite quiet folk. We overturned the senior severance agreement and we took the £91,000 back from this package. That is what we did. You can dress up how you like. We knew there was a problem and we were concerned. We tried to act, but we thought it was in the best interest of the college. Now, this was not an easy time. This was an extremely stressful time because when you wake up and you work with people and you are misled, you are not happy, mind. I totally understand that. You would assume, therefore, that following the discussion that you should have had on 7 October, that is why the SFC, the funding council, then wrote to the principal on 10 October seeking assurances about the arrangements? I would have expected nothing less, though I never had any of the correspondence. Can I ask at the beginning that there appears to be one or two appendices missing from the minutes of 4 November, if we could perhaps endeavour to get copies of those, because we don't know whether they are germane to the discussion? You know a bit of 4 November because I was sitting there, so just ask away. Fine. In that case, there was an appendix 2 that was in connection with the mergers in the college sector and background information that Martin McGuire, who was the principal of New College Lanarkshire, offered. These are detailed appendix 2, which we don't have. I tell you what's in it and then I'll provide them for you, because I think the auditor is sitting with him anyway. I was very concerned about what happened, extremely concerned, and I called the remuneration committee, and I was wanting to find out what actually happened in the sector and where could I have demonstrable information that would support anything that we were going to do. On the situation where the principal was leaving, the board had agreed to make the acting principal. It was evident that we needed some form of restructure to carry us through to reorganisation, and it was five months away. I wanted the board never to be in the position that it was in in October, and I knew that there would need to be some allowances made for people doing additional duties and additional works. I thought, how do you find out what's exactly happening in the very opaque world of the finances of colleges? The area that I decided was I would go and get the principal designate, because, after all, the principal designate was going to eventually take over at college. We had a very long discussion about what was the norm in the sector. He had previous experience, he had been in fife, he knew the sort of figures that an acting principal should get, and he was also from his knowledge. It is very difficult to get information on what happens in the college sector. He gave us specific figures. Were there further stress that Mr Maguire never approved it, what he did was give us advice, and we took in the main parties' advice, using our situation. That is a comprehensive fund for appendix 2. If you have got any others, I will be happy to answer them. I would move on to appendix 3, where you introduced a report. It was about the SFC, perhaps? It was. I was trying to advise board members of the absolute position with the SFC. It was a report that I had written myself, so I may not be as accurate as it could be. What was worrying me about it was, did the funding council have a legitimate concern and what would we have to do to make sure that we dealt with all the issues that were there? At the conclusion, part of the report says that they did have legitimate concerns. This is public money, and I was wanting to bring the rest of the board or the rest of the Immuneration Committee into a common position of understanding. It is not nice to have to write it, but that is what I did. I can just pursue one last appendix, which is a redraft of a letter prepared by Bigart Bailey. Yes, there was a letter. I had to write to the funding council and set out what the position was, and I was taking legal advice. I knew the requirement to write to the funding council. I had already written informally. I am setting out my view of what had happened. I thought that I needed a formal response. It was correspondence that was not addressed to me, but it was correspondence that the new chair picked up. I wrote to the funding council on or around 11 November, and I explained to the funding council what the situation was, and it was within the evidence contained within the Scottish funding council submission to itself. It is evidence that, last week, Mr Doyle referred to Bigart Bailey as an independent team being brought in to ensure that there was no conflict of interest. Were you aware that Bigart Bailey was being brought in and the circumstances in which they were being brought in? There was always a conflict of interest. A principal who is in the Immuneration is looking for a severance payment and their guidance is clearly in a conflict of interest. I had a conflict of interest in 28 January or thereafter. The absolute and precise reason that Bigart Bailey was brought in is for Mr Doyle's answer. I cannot speculate in the precise reason that he is giving his views. I have no information of everything that has been discussed with the remuneration committee in advance of Bigart Bailey being appointed. In the independence of Bigart Bailey? No. Having dealt with him, neither would I. Are you aware of the circular letter from the SFC on 20 January 2000 on sevens payments? I am now, yes. At the time that you were making decisions on this, were you aware of that letter? On 23 October. In October and also in January. The letter has been there since 2000. I was never specifically shown it and I never chose to go to the entranate because I didn't know what was on it. The Auditor General in her report makes quite a few comments that are very concerning. Among them about the college's not retaining sufficient evidence on sevens proposals and also salary enhancements, whether there was any value for money assessment, business cases, would you be able to comment on that? We will deal with the four. There were four individuals who applied for sevens arrangements. Of the four who applied for the sevens arrangements, I went to a panel for the senior staff. The panel consisted of the chair of New College Lanarkshire, the principal of New College Lanarkshire, the deputy chair or a member of Cymru, Mr McTavish, the regional chair and myself. On the basis of that, there was a meeting held to look at the sevens payments within New College Lanarkshire. It set out what the sums of money would be. For one of the individuals who applied for sevens at that time, it was deemed to be too expensive. She then reapplied. New College Lanarkshire had that information on those four. Was the committee involved in decisions such as one member of staff receiving a salary uplift of 19 per cent? That was, in evidence, the principal indicated last week to you and explained the reasons for 19 per cent upgrading in staff. However, it did not come before the remuneration committee. Would it normally have done? That is a moot point. That is a moot point. Do you believe that it should have in the normal course? In terms of enhancement to salary being agreed, remuneration committees would be called if there was a proposal to enhance a salary for a restructure, a change of duties etc. That would be discussed at various remuneration committees when it happened. That is what would happen generally. There would be a discussion about it, but it would not be minited normally if someone was getting an enhancement to salary for whatever reason. The relevant questions would be asked about why is the enhancement happening, is it a restructure, is it a change to duties, is it a change in structure, but it would not be minited, but it was discussed at various remuneration committees when it was I must say that I find it extraordinary that it would not be minited. Can you just clarify something if it is helpful? Remuneration committee dealt with senior staff, human resources committee dealt with other staff. But it was discussed at the remuneration committee? Yes, on the 4th of November. There was a reason for that. I will be very clear. On the 2nd of November of 2013, I was advised by the principle that there was letters that emanated from January of 2013, which had been exchanged between the principle and the individual concerned. There was also an acceptance by the individual, and this was a voluntary severance package to the tune of 18 months pay. This was brought to my attention on the 2nd of November. I then took it to the remuneration committee, where we were dealing with all the issues that had arisen. I then, in a letter to a new colleagues Lanarkshire, as this individual had not applied for voluntary severance, but I had a letter giving her a right to 18 months pay. I thought I would go through the proper process. I took it to the remuneration committee, I wrote to a new colleagues Lanarkshire, and I had written a report for the human resources committee setting out the circumstances of what had happened. Should that letter have been written unequivocally not, but that was written by the principle. Can I just clarify one other thing? I think that he made it very clear the circumstances in January, where the principle had applied for voluntary severance. In his evidence last week, Mr Doyle said that at a meeting of the 20th of August 2013, was the time that he realised that he would have to go. He said once to the effect that when you meet someone from the SFC and from the Scottish Government, you understand without anybody saying anything that that's it and yet that doesn't seem to fit in with what you're telling us. I'll give you the information that I have on the 20th of August. That will answer your question. In the 6th of August, an extraordinary board meeting, when asked by a member of staff what will happen to your principle, his answer was, I would like to have been part of a new colleagues Lanarkshire. I'll give you a copy of the minute, however, I will not be able to undertake that role. The day and hour in the 6th of August, when we agreed as a board that we were going to emerge, that was the day and the hour that Mr Doyle almost certainly had no job. Two issues that could have arisen for that could have been an alternative employment potentially offered to him or he could have at that time potentially rejected it. For all practical purposes, in the 6th of August, Mr Doyle was made a redundant, unlike in January, where he had a possibility of post. By the 6th of August, Mr Maguire was in post, so I can say and document that Mr Doyle was aware in the 6th of August. Everything else was a matter of timing. Thank you very much, convener, and good morning, everyone. There are obviously more issues that have come out of the evidence that you have been given here, and I thank you for it. You will realise that members of the committee are constraint in certain ways that we cannot mention certain names or certain correspondence that we have, but luckily there is some correspondence that we are not restrained to in that is the minutes of the remuneration committee. My concerns, and everyone else's concerns, is the fact that you had a remuneration committee in January 2013, and yet, through this whole major situation, there was no other meeting until October. I just want to ask a simple question, and I know that, Mr Cunningham, you have mentioned meetings in November meetings in February meetings in April meetings in August. I presume that there are board meetings and not the remuneration committee meetings. Members of the remuneration committee, were you not concerned that it not raise alarms that you had no meetings whatsoever between January and October, or did you have ad hoc meetings, did you have phone calls with an email sent? The only ones that we have are, as I say, January, then October, and then things really hot up when it becomes November is the next meeting. Did it raise alarm bells that nothing was being, no meetings were being held? It didn't raise alarm bells with me because I think it has to be seen in context with all of the activity with the merger. It seems to me that the merger management committee was extremely busy at that time, the other committees were busy, the college life went on, and I suppose we were waiting to be called. Certainly it was originally envisaged that the merger would take place on the 31st of July, I think. That then dragged on until the 31st of March 14. So no, I don't think I was all that worried about it. It was all going to take its own time. That's a gender consensus, even though, sorry, I see people nodding if anyone feels differently, please. I think one of the reasons that didn't happen was that the proposed merger in January didn't take place. Given that it didn't take place, there was no real need to revisit the situation until the situation changed again and the merger was back on. I completely take that on board and understand that. I just wanted to clarify that point. Mr Keenan, you mentioned the fact that you emailed Ms McCarthy during the times of when there were no meetings being held. Would that be normal practice to speak to each other that way? I think that people on the board did speak to each other, but to be specific, Mrs McCarthy and I, by 7 October, were aware that there was an issue in due diligence in the afternoon of Monday 7 October. We saw letters and we also then saw a minute of the 28th of January. That minute, Mrs McCarthy can tell you what her view of the minute is, was circulated to members of the remuneration committee that evening for approval. I'll leave Mrs McCarthy up to answer any other question. On 7 October, we were going to a merger committee meeting with the other colleges. That is where the due diligence was going to be presented in terms of the financial diligence of Cote Bridge and into the merger. The phone call was because, for the first time, we saw in the due diligence a liability figure that did not make any sense to me. We had no liability, so we had no scheme for senior staff. That is why the phone call came, because we were going to a meeting that evening where our report was going to be presented, saying that we had a liability that we did not understand. I thank you for that information. The point that I am trying to get at is that it is normal practice, because you have got the January. You have got a board, you have got the merger. The remuneration committee is obviously the one at the end of the day who rubber stamps. I would take issue with rubber stamping. We were not a rubber stamp committee. I do not mean rubber stamp. That is probably just my word. You have responsibility for Severance pay. I wonder whether that was a normality of all the college sector. They are the different boards, but they do not tend to to meet in between their talk to each other. That is the point that I was trying to make in that respect. If I can just go back to what you mentioned about the 28th of January and the issues that arose during that particular time. Correct me if I am wrong, you mentioned that Mr Doyle had produced a letter for the 28th of January before the 28th of January remuneration committee saying that he was no longer seeking employment. Is that correct? Such a letter. I only recall the chairman saying that it was his intention to go. That is fine. That is the point that I wanted to make. Were you aware that Mr Doyle applied for a job in the principal of Ayrshire college unsuccessfully in January 2013? No. You were not given that information either. That is fine. We look at the remuneration committee 28th of January. You have the paper here that it mentions about, and it has been mentioned before. Mary Scanlon raised it about parts of the minutes saying that the Mark Bathurst chief funder funding council, there is a paragraph in here that says that he was aware of everything and agreed to it. The evidence that you gave to the answer to Mary Scanlon was that this was not what was said at the meeting. The part that I read out excluded the sentence he and I would certainly interpret that to me. Mr Bathurst confirmed that the funding council had no objections to the board's approach. I remember that the use of the word funding was not a problem. Can I read out the paragraph that is mentioned there? Obviously, there are questions in regards to whether this is an accurate minute or not. It may be an accurate minute, but from what we have heard it may have just said that the chair noted that traditional funding, sport funding, would be made available to the college as part of a major process. Therefore, the funding was not an issue at this time. The chair also confirmed that he has spoken to Mark Bathurst, chief executive of the funding council, and that those discussions were in line with what the funding council's guidance on severance arrangements for senior staff, and in particular any potential arrangements in respect of the principle. He confirmed that the funding council had no objections. To be an accurate minute, the only thing that I took exception to was the second-last paragraph, where it purported to record that the same model would be afforded to college senior staff. I just wanted to clarify that point. I think that it is an important point. We are trying to establish correct minutes of what was said and, if that was correct, advice from the funding council, which we can look at again. If we can just go on to the October meeting, I am bearing in mind that Mr Gray, the chair, has said that the principle was not going to re-establish his job, but it was not going to apply for his job. Then, on to the October meeting. All of a sudden, Mr Brown from Bigot Bailey appears. I know that it has been raised before. Did that raise any concerns? I am not going to read it all out. Certainly, Paul Brown was certainly very vocal at these meetings in, I think, he appeared in every centres. Never mind every paragraph. Did that raise concerns with yourself that all of a sudden we had Bigot Bailey here? I was concerned that there seemed to be an impetus to get the executive scheme through. It did not go through, and indeed he was substituted with the Lanarkshire scheme. I think that the fact that he was there was extremely comforting. It gave us the baseline that we were being properly advised. I mean, I know that Mr Brown advises the committee and you said that you were independent. You wouldn't question the independence of that. It does not believe that the funding council can successfully challenge the committee's decisions, so that gave you comfort and that respect. That was the advice in the evidence led by Mr Kemp when he took advice in 18 December. That is a legal point. I think that what we are really talking about is public money, but the advice that we were given from Mr Brown was clearly agreed with by DLA Piper according to the evidence led last week. It also confirms Mr Keanean and others that the £91,000 for the pension should not be included in the severance package. You mentioned in the minutes of this meeting of October that it was Mr MacArthur who asked that it was not clear when the principal's termination date was being reminded, sent a letter a way back in January to say that he wasn't seeking another job. He had not intended to leave until 1 April 2014. Can I ask, did Mr Gray or the principal speak to you specifically about that and give you that date? Yes. Regrettably, we were in and out of the merger. If the first merger had taken place in 1 August, the intention was that the principal should leave on 1 July unless he was successful. The new merger was taken place on 1 April 2014. Mr Doyle intended to work until the new merger. However, you will see from other correspondence that Mr Doyle did not have a job in the new structure. There were issues about how you improve the skills of the staff you have got and so on and so forth. How you bring staff at the time in a really difficult situation to merger through the process. From that, Mr Doyle left early. One of the things that I do not fully understand is the practice of having minutes waiting for six months for approval. In this instance, the fact that a letter was issued on your behalf to the principal on 8 February, as I understand it, saying that this was the severance package that he was going to be offered before you'd approved the minutes. Were you told that letter was going to be issued? No, so you weren't aware that a decision that you had indicated based on the Edinburgh model, which you thought was the correct model, that offer was going to be made. Did you feel when you got to the 23rd of October that that letter having been sent out on your behalf without your approval of the minutes, that that in some way committed you to go beyond the funding council, because by then, by the 23rd of October, you knew that there had been correspondence, even if you hadn't seen it, Mr Keenan, you knew that there was considerable concern about the conflict between the new Lanarkshire scheme and the South Lanarkshire Stroke Edinburgh scheme, which you'd previously gone on the basis of, although you never approved it as a severance scheme for the whole college. I think that you've just explained why I thought there was a lawyer at the meeting, why Bagot Bailey was in at the meeting, because we recognised those issues. Is that why you felt committed? I'm trying to understand why. You were given authority by Paul Brown to say that you as a committee, as an independent college, can do what you want, provided that you can justify it in terms of public accountability. However, the funding council was clearly very unhappy about your going beyond, and it would not involve them in providing you with the necessary funds. You had to make a decision effectively affecting hundreds of thousands of pounds of your reserves at that point. I'm just trying to understand why you took that decision, because you must have known that the funding council was going to be unhappy as when you were at Lanarkshire College, because they were going to get reserves that were reduced by that amount. Can I maybe explain? The funding council operates iconic pro-calls and guidelines. The funding council was very clear that their first port of call and their process are to the principal. Their second port of call is to the chair, and their third port of call is to the board. It would have been extremely helpful if, in this instance, they had a broken protocol and said that, given the degree of outrage that they are expressing, who is going to make this decision and how do we provide them with the information? They should have thrown protocol out of the window and gave us a letter, and then we would have understood and been in a position to make an absolute proper decision. Whatever decision we would have made is hypothetical, but it would have been really helpful if somebody had not suggested the way we get things through the intranet. When Mr Howells gave evidence, it may well have crossed his mind that he should have cut the process short and came to us with the guidance. Dr Simpson, I was not aware that the funding council guidelines at that time were so stringent. It was my understanding that the guidelines were exactly that, guidelines, and that the college had the discretion to spend over the guidelines. They would not receive reimbursement for it. The outrage from the funding council, I believe, was about a supposed severance scheme for senior staff. That is where we were absolutely clear that there is no separate scheme for senior staff. The senior staff are leaving under the new college Lanarkshire scheme. I believed that we would have satisfied the issues that had been raised by the funding council and that we had a clear audit trail of the decisions that were made running up to them. For both the senior staff and, eventually, for the 33 staff who left as a whole, you applied the new Lanarkshire scheme. That was what the funding council appeared to want. As far as the principal was concerned, the letter of commitment had already gone. The legal advice was that that was within your remit. You were committed to it, and there was nothing you could do about it at that point, even though the minutes actually had not been approved until the 23rd of October, right? The second thing that we could not look at was the contractual right of the principal. There were options, maybe in reflection and maybe even at the time. We had options. We could have asked the principal to go and garden leave. I did not think by that time after this process that that was a viable or tenable proposition for perhaps the evidence that I gave in the earlier on. Okay. That is fine. Thanks very much. Thank you. Thank you. Morning panel. When you become members of the remuneration committee, what advice or training are you provided with or where you are provided with? None. It was based on experience. Will we deem to be suitable? We all chair other sub-committees of the board. Is that the chairs of those sub-committees from the remuneration committee? So, when you become the chair of any board in the college, where you provide it with any particular training or any guidance in terms of particularly regarding legal matters? No. Again, that was based on experience and subjective suitability. The reason for posing that question is that, as this process has occurred and the likes of Bigot Bailey were brought in to the situation, they have been specifically legal advice that have been provided. I was just trying to establish if there was potentially any conflict of information provided or guidance provided to your committee as we are going through this particular situation. Can I follow the question, Mr McMillan? I am sorry. Are you suggesting, for example, that the legal advice that we received might have been in conflict with the communication within the committee? I am not suggesting anything. I am just imposing a question. Okay. I am just trying to clarify the situation and so on. Would you mind asking the question again, please? Sure. Okay. In terms of, I am trying to establish in terms of any information that you provided with when you became committee members, before this particular committee and also any other committee, and you indicated that there was no guidance or no assistance that was provided from that perspective. In terms of going through this scenario that we are discussing today, also you were provided with legal advice from Bigot Bailey, and I was just trying to establish if it was when you were provided with information as to whether that was consistent with information that you would have been provided with previously when you became members of this particular committee or going through any other situation looking at servants' payments. My understanding is that Bigot Bailey was there because it was an extraordinary set of circumstances and it was important that we reached the right, correctly informed decisions. Okay. When the discussion, in terms of your members, I am not sure of what the legal situation in this will be, but because it was that particular long time delay from the January meeting to October, and also in terms of the potential to have that merger then it did not happen, and then I was subsequently going back in, will you have had any discussions with members of either committees from other colleges, either officially or unofficially, just to establish what situations were happening or what was occurring elsewhere in order to try to inform yourselves of how to take things forward within CoverageCon. I attended a couple of merger conferences that focused on aspects of mergers. I was interviewed by a specialist in mergers who wanted to assess my state of knowledge on the subject, but I do not recall any meetings with colleges, other colleges. Have there been conferences with the College of Scotland and different things like that, but nothing specifically about remuneration, about mergers, about code of contact, about things like that? My experience was that on the 9th of September, Mrs McCarthy and I were asked to lead on the merger committee. When we went to the merger committee, it was on the table about a severance arrangement scheme, which we saw nothing wrong with whatsoever. We thought that it was right. It was the same scheme for all staff, excluding the principal. That was my experience of the situation. I have a question about the SFC guidelines. It has been clear from today that there is no point where you are directed to or had copies of the SFC guidelines. Did any of you contact the SFC for copies of the guidelines? On a personal basis, I did not know that there were guidelines, because if I had known there were guidelines, I would have had them. It is in my head as well. Is there something that is still going on? No, I was just going to say that I concur with my colleagues. I thank you very much. I thank you very much, convener, and good morning again. If I can take you back to January 23, you have spoken about the information that you received, and of course at some length about the information that you now know that you did not receive. Can I ask whether the information that you received came from the chairman and the chairman alone? The actual Edinburgh model was provided by the board secretary as part of the information that was requested by the chair to be presented to the January meeting. Perhaps my question is slightly wider. Was there anything else on the agenda that was not requested by the chair? I remember from the minutes that I do not have a copy of them. I have the minutes here, but I do not have a copy of the agenda. Actually, I do not remember an agenda, but perhaps there is one. I am not really trying to fight about the protocols. It is more a matter of trying to establish where you have got your information from. The information would be furnished through the board papers and through information provided by the chair, and perhaps by reports from the chairs of other committees. If he was going to be presenting something, he would ask the executive in the college to provide him with the information that he needed. I am not trying to put words into your mouth, but I am getting the impression that the agenda and the materials for the agenda are essentially set by the chair. One of the accusations is that the information was withheld. I am trying to see who else might have withheld it if that were to be true. That is really what I am trying to cover off. I am just trying to see whether there is anybody else who did provide you with information, and you are not saying it. Could I then just pick up on the issue that I think Pauline Docherty commented on that some things probably would not be minited, and my colleague Colin Beattie was a bit surprised at that. Can I just ask about your expectations of things being minited? I mean, surely part of governance is about things being minited, but what the Auditor General pointed out was that things had not been minited. Does that concern you? Did that concern you? Committees were minited, so the HR committee, the finance committee, would all be minited. It was a remuneration committee that may not be minited. Those meetings could be called. I talk if there was an issue to be discussed in terms of remuneration issues, but sometimes they were not minited. Does that seem to you, in hindsight, to be maybe an omission? Are numbers with pound signs in front of them rather important? Yes. Does anybody else want to comment on the other minutes that you have been aware of? Were the remuneration committee minutes comprehensive enough? What did events apart from the events that I would not support? We had lots of internal audits and audit reports that confirmed that governance in the way that we operated was appropriate and good, so we had no reason to be concerned about minutes. I'm wondering then if I could take you to either of the remuneration committee meetings, which we're really talking about, and the issue of a business case, which is something that came up last week, something which I think we're familiar with in principle, which I still don't understand what the business case for paying somebody more than you have to to go away might be. Can you explain to me why there would have been a business case for exceeding any standard at any stage? The package was based on precedent. We weren't aware of the funding councils insistence on a business case at that point, and in October we received legal advice in support of the decision. I think that summarises our position. So you didn't see the need for any specific business case as long as you were sticking to established standards? Yes. Which I think to be fair is what I've heard you say. Yes. Yes. It's a fair summary. Right. So if I then go to the board meeting on October 23rd, and I am going to the board meeting, not to the remuneration committee meeting, where I understand you received advice from Bigot Bailey and I'm not doubting the independence of that advice, am I right in thinking that what I've heard is a suggestion that you were told that you were committed to the offer to the principle? Was it not suggested that that offer could be withdrawn? Did anybody question whether that offer could have been withdrawn? An offer can always be withdrawn in Scotland's law until it's accepted. I'm not a lawyer. No, it's all right, forgive me, but I'm just where we are. No, it's all right. I mean clearly somebody who wasn't at the meeting is not going to be able to. I'm simply interested to know what the members of the board who were there felt they were being advised and what their options really were. It was about making sure that there was no scheme for senior staff. Most of the debate at that meeting was about the senior staff and not about the principle and the information that we had about the principle in January in terms of the comparisons in the sector and what had happened in other colleges. It was still the latest information that we had. So at that meeting you were still working on the assumption that this was current guidance, but I thought that the funding council had come along a few hours beforehand and pointed out firmly that it wasn't. I think you need to put in context the situation. We had a very robust remuneration committee, which lasted a considerable minute in time, and much of the focus of this was relating to the senior staff's evidence scheme. Members were broadly aware that, for the reasons outlined by Mrs McCarthy, Mr Hulls came in at the meeting and he was not in a long time. He was in and he was out. It was not a play in civil meeting before it. I think that people were a bit afraid, a bit upset about what had happened. Mr Hulls came in and he gave a five-minute talk. At the end of the process, a five-minute talk, I probably didn't quite convey what he was trying to get across. I'm not knocking on for a go-back to my point. It would have been really helpful if we'd been sitting in the guidance. I'm just trying to tell you, as it was at that time, that my main focus was on the £91,000 and my secondary focus on whether Mr Doyle should get six months' evidence, of which we had very clear legal advice, and we did it. I think that that's somewhere where we were, if that's helpful. Just very brief questions from Mary Scanlon and Colin Beattie. It's just very brief for the record. Mr Doyle said last week that the auditor general's report was incomplete, inaccurate and vexatious. Do you agree with the contents and the accuracy of the auditor general's report or do you agree with Mr Doyle? We can't answer that. We don't know all of the facts in this situation. After you have concluded your work, having heard the very candid evidence that we've given, the very candid evidence, you will be in a better position in us to make a point to determine it. It's a question with great respect, Mrs Scanlon. It's not for us to answer. It's for you guys. Do you agree with the one paragraph 22 of the auditor general's report? It appears that the chair did not provide the remuneration committee with complete or accurate information about the advice provided by the SFC. Can you confirm that that's the case? Do you agree with that part? We did not have complete information, Mrs Scanlon. You did not have complete information. You agreed to give the principal an additional three months, as well as the 21 months and the six months. Three months on 28 January, because he had successfully taken Coatbridge through the merger process. Two weeks later Coatbridge was out of the merger. It's maybe an unfair question, but have you got any idea why Coatbridge opted out of the merger two weeks after it was agreed and rewarded to the principal? I think you heard the evidence from Mr Kemp who had said that there was specific frictions and there was potentially a lack of distrust. In a minute of the sixth of August, my colleague Mrs McCarthy's comments regarding the merger was the major fail because of leadership and culture. That perhaps accurately sums up what happened. That's a very tiny question. My understanding is that, with legal advice, the decisions of the remuneration committee were legally binding on the college. Have you any idea why Roger Mullin, from the Scottish Government, who was facilitating the process of merger, wrote an email to John Doyle on 18 August, asking to discuss various issues, including voluntary service? I have absolutely no idea. It was very clear to me that the poor decision effectively made Mr Doyle redundant. I have no idea. I have no opinion on the letter from Colin Beattie. Can you confirm that now the principal or the senior managers or any of the staff from the principal's office were present at meetings where the severance arrangements were being discussed? I can confirm that. Do you consider, in retrospect, that there was any conflict of interest in having the chair of the board, also as chair of the remuneration committee? That was guidance. That was allowable under the rules at that time. I suspect that that perhaps has changed, but that was what was a normal practice as we understand it in the sector. At what point did the external auditor sign off on the severance scheme? He would have presumably signed it off in the time in new college Lanarkshire. That is a presumption, but he will be able to answer that on the auditor himself. You were not aware of the external auditor being consulted at any point in the process? Not to the best of my knowledge. You are referring, I think, to a letter from Mr Lawrence Howells to John Gray shortly after the board meeting in late October 2013. The board and the remuneration committee were not aware of that letter. We have heard Mr Howells' presentation at the board meeting. Would it not have been good practice as a matter of course for the external auditors to be involved and to sign off? We can see the results in the audit statement, which is where they are concerned about governance, weaknesses and so on. Clearly, it might not have been a straightforward process for them to sign off. I think that the timescale is important. I am not sure whether it has been in your responsibility to take forward the audit and arrangements in the remuneration committee. It is just so that we can be clear about this line of questioning. Committee, convener, it would have been the board. The board was acquainted after the remuneration committee meeting. In terms of moving that forward, I suggest that we have auditors in the next session. Can we take it forward then? Very briefly, Stuart McMillan. I just wanted to ask Mr Kinan, you referred to the presentation that the chief executive of the funding council gave to the board on 23 October 2013. Did he make clear that the board should reconsider its position over the severance proposals for the principal? I do not think that he did. He was not linkage on the line at all. My final question is on the board members and other institutions. Karen McCarthy mentioned that you attended conferences and other folk will have been there. At those events, were the SFC representatives there and were issues of finance and remuneration highlighted by the order discussed or the guidelines that were indicated by the SFC? At those events, it is likely that representatives from the SFC might have been there. I cannot remember that. They are usually quite big events. However, there was never any meeting that I was at that was anything about remuneration or severance. I just wanted to ask if you were aware of the document that was issued in 2000, which is guidance on severance arrangements for senior staff and further education colleges. Were you aware of that specific document? No. No. That was issued in 2000 by the Scottish funding council. You advised that you thought that Bigot Bailey provided some very effective information and you have ensured that you were very well aware of that. However, did you not expect that Bigot Bailey provided that as a basis of a document that has been issued since 2000? From our understanding, Mr Doyle made it clear that Bigot Bailey was not just providing legal advice, but also providing HR advice as well. Would you not have expected Bigot Bailey to say that this is a document that has been issued since 2000? That is the norm in the sector. Would you not have expected them to provide this? The answer to your question of fact can be in favour of the fact that it was not presented. I cannot give you any other answer. What you say is that you feel that you are well informed as part of the process, best is formed as possible, by Bigot Bailey. However, would you not have expected an organisation with the expertise that they have to have at least used this as a reference point for how they should take forward these severance arrangements? Should you not have advised you that the Scottish funding council has arrangements? I do not actually expect you, as an immigration committee, to have accessed all this information. You have paid people to carry out the process of ensuring that the research is carried out and the information is put before you. Do you not think that you were kept in the dark by Bigot Bailey? It is not clear about those guidelines. We have never seen them. We were never told to look at them. If those guidelines existed, why would we be presented with schemes that were much more current than that, schemes dated 2012 and other information that were not in line with those? That is the basis of the approach that should be taken for severance arrangements. The Scottish funding council has confirmed that. Would you not have expected Bigot Bailey, who had the responsibility to take you forward in this process, to provide you with legal advice and HR advice? I am just asking you, as a committee, if you do not feel that you should have provided some of this. Martin is that committees, when they are making decisions, should have full information? I am asking a specific point because we are going to be questioning Bigot Bailey at a later stage. Do you not feel let down by Bigot Bailey on the basis that they have not provided this information because they are the individuals who have been tasked with the responsibility of researching the issue and providing the necessary information? I do not feel let down because I accepted the advice that they gave us. I understand that you accepted advice, but I am saying that I should not have provided the advice to you so that you could have been informed. Do you not feel let down? You have been placed in this position when you have taken the decision to spend large sums of public money. Do you not say at the end of this? We expect that Bigot Bailey, who has paid significant sums of public money to carry out that advice and ensure that you have the advice, you do not feel let down. I cannot answer your question. No, but do you feel let down? Sorry. I feel let down that the college principal and the coon officer never brought this to retention. I can be absolutely definite about that. But just to clarify in conclusion on my final question, Mr Doyle advises that Bigot Bailey was tasked and appointed to carry out the role of providing this information to you. I am only saying what Mr Doyle said, so do you not feel at that meeting when you are taking the important decision that you have a legal advisor before you, who has HR expertise? Surely they should have provided these documents to you. Does nobody feel let down by that? You have taken a significant decision. I was not at that particular meeting, but I find it difficult to be let down by something that has been provided to me that I did not know about. No, I do not understand your position. You have been provided with information, you are unpaid volunteers who are giving up your time to attend these meetings to do the good work at the college, but you have professional advisors who are there to advise you. It is their job to research this, and it is their job to use their expertise to do that. I am just asking you, did you not feel that you should have been provided with this information? I think that it is his job to tell us if we are doing something wrong, if we are acting against the rules. That is what his job was about, and that is what I believe his job was about. I thank you all for what has been an extended session, and I thank you all for your time. To make a statement, if it is at all possible, just a very brief statement. Very, very brief. This has been a difficult time for the board members. It has caused considerable anguish. This is my card that I continued on as new college Lanarkshire for a period of time so that there is no suggestion of things. When this arose, we stepped aside and declined to re-apply, because we think that this is an extremely important matter. We have given you all of the evidence, I hope, and we have been extremely frank and candid. I would say that it was a very difficult time, and particularly Paul and Carol worked really hard right through it. We did work best, and you may judge what you did. Can I put on behalf of the record the committee that we appreciate the candid approach that you have taken? I also thank all of you for your commitment to the college sector during the period that you gave it. I know that it is done on an unpaid basis, and you gave up your time to do that, so I thank all of you for doing that. Can we move the committee into a brief interval session? I am on again, colleagues. I am just reconvene. I now welcome our second panel of witnesses today, who are Aosta Gray, the audit partner at Wiley and Bissett, the former internal auditor at Cotebridge College, and Kathy Wiley, the partner at Henderson and Logie, former external auditor at Cotebridge College. I understand that Mr Gray has a short and brief opening statement to make. I hope that we are very brief, convener. It was just to say good morning, convener. Thank you for the opportunity to provide an opening statement. Wiley and Bissett are keen to be of assistance to the committee, and we will answer members' questions as fully as we can. We apologise in advance if there are questions that we are unable to answer because of the constraints of client confidentiality, data protection or our professional regulations. Wiley and Bissett were the internal auditors of Cotebridge College for the period ended 31 March 2014, and we are also appointed as internal auditors to new college literature, with effect from January 2014. We would be happy to outline their own remit of internal auditors if that would be helpful to the committee. Can we say that there will be questions that will hopefully raise some of those points? I understand that you may have a statement that would elaborate on some of that, but I think that you would be more helpful if members could raise questions. I would be happy to do that. If there are issues that you wish to ensure a part of that, then I am sure that members or you can elaborate on some of that to allow those areas to be covered. Would that be okay? Okay, so can I just open questions by firstly referring you to previous evidence sessions that were referred from both the Immuneration Committee, which you understand that you have just listened to, and also a previous session with Mr Doyle last week. Can you, Mr Wiley, as the internal auditor, confirm that you were aware of the compromise agreements that were signed by Mr Doyle, and did you approve them prior to that? I was aware of them as part of an exercise that was carried out for new college literature, in terms of looking at the severance arrangements. Okay, so part of the requirement that the Scottish Funding Council arrangements are that both the internal and external auditors are aware of that, aware of any arrangements that are reached with senior members of staff. So, specifically in relation to Mr Doyle, in terms of the internal audit, you are clarifying Mr Wiley that you were aware of these arrangements. Did you approve them? No, you asked to approve them. Perhaps if I explain a bit about the background, what happened was well and basic were the internal auditors of Coatbridge College up until the date that it came into new college literature. I am effectively working as the internal auditor now of new college literature, so I have prepared a report for new college literature through the audit needs assessment and internal audit plan for the year. That is the first time that I was aware of any compromise agreements. So in terms of, you have seen the process and you have heard some of the evidence that we have received, which clarified that the Renovation Committee approved the proposal for Mr Doyle, and all the Scottish Fund and the Council guidance requires both external and internal auditors are made aware of the arrangements that have been reached. At no time were you ever made aware of this arrangement? No, no time. In terms of looking back the way, as I say, looking at it from new college literature's point of view, we prepared the report, which affected the way Kathy looked at as part of her audit for the year. In essence, that was the first time that I was ever aware of any compromise agreements. So this is a significant sum of public money, and you have heard all the sums referred to both last week and this week, so this is a significant sum of public money. Would you not expect the director of finance to make you aware of the fact that this is a significant sum that has been paid into an employee's account via a back payment? Would you not expect the director of finance to make the finance from your point of view? Absolutely, yes. And he did not make any contact with you to advise you on this? No, no. So this significant sum of public money, and did you, after the sum had been placed into Mr Dahl's account and the arrangement had been reached, did you ever contact the college after to say that you have been aware of this sum? The only time that Willing Bissett is a firm that was aware of anything was when the internal audit work was being carried out for new college literature. So when was that? Effectively, Willing Bissett was appointed in January 2014, and then what happened was the audit needs assessment was drawn up for the year and approved by the audit committee in March 2014, and then in April 2014, work was commenced to look at what had happened within the Severance Schemes. At that stage, that is why I am saying about the compromise agreement. We were trying to get information for our report, and obviously we couldn't get information from certain individuals because of compromise agreements that had been signed. Prior to that period, Willing Bissett did not know anything about that. Who would you expect to provide that information to? First of all, in your previous experience, so you have got significant experience in this area over many years, I can see that from your paragraph of details. Have you ever come across a situation like this, where significant sums of public money have been spent? Who would you expect to make you aware of that? Who would the director of finance do that? Who would you expect to do that? You would automatically assume that it would come out from the senior management team, which would include the director of finance and the principal. So, did you highlight that in your internal report then, when you created it in 2014? Did you say that you were concerned that the fact that you weren't made aware of these aspects when you signed it off? Effectively, what happened was that it wasn't looked at until we looked at it under new college of literature, when we were doing the internal audit for new college of literature. Prior to that, Willing Bissett wasn't aware of the fact that the scheme was anywhere in the offering at all? I suppose that the point that I am asking is that you have created a report to take it, so you have obviously had to, the documentation has had to be put together to say that this is my report of the internal audit. Did you highlight your concerns that you weren't made aware of these compromise agreements? We effectively had a report that was prepared, as I say, under new college of literature. So, when you look at the report itself, it was produced and I can run you through if it would be helpful. If there's any specific areas that relate to Mr Doyle, if you've highlighted anything, so is there anything specific to that or to the compromise agreements? What happened if I can briefly run you through just exactly what happened in terms of the report that was carried out? In essence, what happened was, as I say, it was in January 2014 that an audit needs assessment was drawn up with new college of literature. Myself and a colleague met with the financial person at new college of literature. As part of the audit plan for the year and the audit needs assessment as part of the internal audit plan, it was agreed that the severance would be looked at across the three different colleges, so in other words, Cumbernauld College. Who was the auditor for Coatbridge College then, prior to your arrival? It was William Bissett, but it was one of my colleagues. So you're speaking on behalf of your colleagues today? Yes, essentially. What I'm saying is that, effectively, what happened was that we were engaged by new college of literature and, as part of the process of the internal audit for the year, we prepared our report. In essence, it was effective with what happened in January 2014. We met with the finance director and then the audit needs assessment was approved by the audit committee in March. Initially, the fieldwork began at each of the different locations in terms of Cumbernauld, Mullerwell and Coatbridge. It was only at that point that William Bissett became aware of the issues at Coatbridge College. There is a report that has been produced, which, at the moment, new college of literature, they don't want to release because, obviously, confidentiality, etc. Can I just clarify, Mr Wellie? The question that I'm asking now is, you've carried out the internal audit report. I take it that part of your responsibility would be to highlight issues concerning the processes that have been followed, so you weren't made aware of the fact that that money had been placed in somebody's account, Mr Wellie, in that case. You're saying that you would have expected to be made aware of that. Have you highlighted that anywhere in your report that you're concerned about that? Well, as I said, we're just going back to the process that's gone through, because it's quite unitary to understand. What's happened is that the report's been prepared under new college literature, and, in effectively, we've issued a report that hasn't been released, but I'm just trying to give you the timeline there. There are points that I can tell you, which have been given authority by the college to mention today, so I can tell you that they were reported. As I said, there was a process that was gone through. You understand the question that I'm asking here, which I think is pretty clear. Obviously, somebody has a payment that's been made to a staff member, a senior staff member, the principal, and the point that I'm making here is that you would have expected to have been made to be informed of that. We know that the external auditor has said that she's concerned about that, because that's in the Auditor General's report, but I'm asking in terms of your internal report, did you record anywhere that you were concerned about the fact that this was done without you being made aware of it or your company being made aware of it? Yes or no? I think that it's quite a clear question, but did you record it anywhere and then maybe you can elaborate on it? I think that the report that was prepared had conclusions that I can run over just now. Just paraphrase something for me or just tell me something. Did you yes or no record this? Did you contact the college and say why was I not made aware of this? You've paid out to Mr Doyle on 25 October, and nobody's advised me as an internal auditor. Did you raise any of that concern? What happened was that we took our report to a certain point and we've said that in the report, and effectively what happened was that after that it was passed over to an external audit and they followed it up with the funding council on the points that were raised in our report, which eventually most of them have come out to the Auditor General's report. Can I just ask if the external auditor wants to elaborate on that? I think that all I would want to say is that although I was aware that there had been payments made to the principal and that there was a scheme in place for other staff, I knew that I needed to look at that as part of my audit, but we had agreed that the internal auditors would undertake some work first and then we would get involved. That is normal practice that an external audit would not duplicate the work that the other does, and we are all aware that there is guidance that means that we need to look at the severance payments that exceed £50,000. It's sometimes done in advance of the arrangement being agreed, and it's sometimes done retrospectively, but it's always done before the audit is signed off. Can I just ask finally both of you, in terms of the Scottish Fund and Council's guidance, is that the external and internal auditors should be made aware of those arrangements? You are both aware of that guidance, aren't you, to get its part of your responsibilities? Can you clarify that you were made aware of those arrangements? I wasn't made specifically aware of them, and I certainly wasn't made aware of them in terms of... Can you say specifically what you mean by that? I was aware that the principal had left in October and I knew that he would have had a package at that point, and I knew that I would need to look at his severance payment, but I wasn't made specifically aware of it until after the event. After the payment had been made? Once I saw the guidance from the funding council, I was concerned because I had not been made aware specifically as they had asked for it to be done. That was post the payment being made to Mr Gray? That you became aware? How did you become aware? I was aware towards the end of 2013 that the principal had left the college. I knew at that point that there would have been a package. I didn't become aware of the specifics of that until I saw the internal audit report later in 2014. Yes, I'm confirming that I didn't know anything about the payment until I came here today. So you didn't know about it, that's your payment? I didn't know all the detail of it because, as I said, we took our report to a certain stage and then it was passed across text in an audit. Can I ask the £400,000 difference between the £1.3 million and the £1.7 million? We heard from Mr Doyle and Mr Gray last week that this money came from commercial activity. Can one or other review internal, external confirm that the additional payments to Mr Doyle and others came from commercial activity? The easier for me to answer that one, although I don't think I can answer it as specifically as you would want me to. It's true that there was commercial income within Coatbridge College, but it's very difficult to distinguish that income from the other income that would have come from public funds. In some respects that's because some of what might be termed commercial income, which had not come from the funding council, would still have come from public funds in that it might have been paid by local authorities or Skills Development Scotland or from SAS, etc. But you also need to consider that whether you can identify income, the expenditure that is recorded within the college accounts doesn't distinguish between the expenditure that has taken place to deliver publicly funded activity and commercial activity. Without a great deal of work, it would be very difficult to determine if there had been surplus that had been created that you could then attribute towards that payment. It's really a bit of a red herring that we were told last week, I'm sure that you've read the official report, that the £400,000 didn't really come from staff and didn't come from students and front-line education and training. It was from commercial activity, therefore implying that it really didn't matter. It would seem that that is quite untrue and it would seem that that's quite misleading. Is that fair? I think that it is a bit misleading. There is definitely commercial income within the college, but how much of it would have been attributed to that payment is impossible to say, and it certainly wasn't included in any evidence that I had seen around the contemplation of that package being awarded. My second question, and I'm aware that you've been sitting through the previous evidence session, the concealment of material facts, the withholding of information, not being provided with the Scottish funding council guidance, the remuneration committee made their decisions fairly and squarely on the information that they had, and I do not blame them for that. How would you describe the concealment of material facts in terms of looking at a major decision involving public funds? Well, it shouldn't happen. I think that it's something that the people involved should have known that that information should be given. I'm asking you the question because our research unit in the Parliament uses the term fraud to describe the concealment of material facts. It's usually used to describe the act of depriving a person of something by deceit, which may involve the misuse of funds or other resources fraud, as we all know, as a criminal offence. Do you agree that information was withheld, information was concealed from the remuneration committee that led to them making a much more generous severance payment to Mr Doyle than they would otherwise have made had they had the full information? I agree that the information was withheld from the remuneration committee, but, as I concluded in my own report, it's not for me to say whether they would have still made the same decision or if they would have made another decision if they had that information available. I'll leave it there just now. Can I firstly ask about the internal audit process in the context that, during 2013, it was obviously understood that there was an emergency process going on in Lanarkshire? Would the internal audit to your firm, sir, have been in regular contact with the principal and the director of finance as the accountable officer of the college through that course of that year? They would, in a normal course of events, be meeting on a reasonably regular basis, mostly with the director of finance. Would that be monthly? Maybe not quite as much as that, but they would be attending while, if it was a natural position, they would be sending a senior member of staff to the audit committee. That happened during 2013, where the audit committee of the college met on a regular basis and your firm would have been represented at those meetings. Yes, and the same in the new college as well. Given that there was an emergency process going on during 2013 and severance was clearly going to be an issue that came up, because some staff would not have gone and left the sector altogether. At no time was the severance—was there any discussions about the severance? No, there weren't any in terms of—we were never ever asked to look at the severance arrangements. And the director of finance, all the principal, never raised that issue with your colleague, whichever one of your colleagues was taking those audit papers? The only thing was that after there was an informal meeting—it wasn't a formalised meeting—which took place on 28 January. Specifically, that was the first time that William Bisset was ever made aware of the fact that there were potential severance arrangements. 28 January, which year? 28 October 2013. But it was mentioned in passing that the college was taking legal advice from Bigot Bailey in relation to severance agreements, and that they might ask us to look at it, but there was nothing ever asked to be done about that. You probably had a sale of that again for the record, both the date and what exactly was discussed at that meeting, because that's very important. Specifically, the first time that William Bisset was ever made aware of any severance that was being talked about was at an informal meeting on 28 October 2013, with the principal and the director of finance of Cope Ridge College. It was mentioned in passing that the college was taking legal advice from Bigot Bailey in relation to severance arrangements, and that they might ask us to look at it, but they never did. So, Mr Doyle, I presume, volunteered the information that severance payments were being considered. Yes, but it was just an in-passing comment that was made, but prior to that, William Bisset had never been asked anything about severance, and we were never asked to look at the severance arrangements that were in place at this time. I understand that. You've said that very clearly on the record. It didn't occur to your partner, whichever one of your colleagues was dealing with this, to possibly ask the question, given that the college merger process was in play? I think that at the time, obviously, what would have been said was that if you need advice, then we can help with that. The onus was on the college principal and the director of finance to come to you under the guidance that the Scottish funding council, which I'm sure you entirely familiar with, states, and they never did that. And they never did that, no. Okay. I wonder if I could ask the external auditor. The auditor general's report, Mrs Wiley, makes quickly how difficult your job was in turn of gaining information from the college as to what had happened. Would you like to elaborate on that for the committee? Yes. By the time I was involved in looking at this, obviously, internal audit had undertaken their work, and I knew that I was waiting for the report to come, and it was delayed in being provided to me in September 2014, when I was trying to complete the audit of Coatbridge College. I had spoken with members of the new college Lanarkshire senior management team and also with the internal auditors to try and get access to the report, because I couldn't conclude my work without undertaking the work that I needed to. And at that point, the information was given to me in the middle of September. What information is that? Well, I was provided with the report that Wiley and Bizot had produced around the severance payments in Coatbridge College. Did that inform detail all of the payments and to whom they had been made? Yes, that included all the information about the timelines of when. Did that report say and mention the funding council advice and therefore that the payments that had been made were considerably in excess of that? I think it did. I can't remember if it specifically mentioned the funding council advice, but certainly as a result of receiving that report, I then tried to get more information from the college because I needed to understand it more fully in order to consider what impact it had on my audit opinion. At that point, it was very difficult because we were now into new college Lanarkshire dealing with the ex-Coatbridge information. The people there found it very difficult to access information from Coatbridge College and it was incomplete information that was available to be provided to me. Was information with health from you knowingly? I don't believe that information was knowingly with health from me at that point in terms of new college Lanarkshire providing as much as they could when I started to ask questions. I think that there are points earlier in the process where some of the senior management team at Coatbridge College could have spoken to me about things that they didn't speak to me about. Yes, they didn't volunteer the information. Mr Doll said on record last week that he had destroyed papers. Were you aware of papers that would have been helpful to your enquire that you weren't given access to because, by definition, they didn't exist any longer? One of the things that I had asked for was the papers that had been presented to the remuneration committees in order to see the business cases that should have been because that's one of the things that I should have looked at and those papers were not able to be found. I don't know whether that's because they never existed or because they had been destroyed. You asked the question obviously, did a business case exist for what answer did you get from well? Well, no one could find one. Were you made aware, you would have heard the earlier evidence this morning from Mr Keenan, were you made aware of the letter that Mr Doll had written to Mr Gray in January of 2013 prior to the remuneration committee taking place on the 28 January, which, as we understand it, intimated his desire to leave Colbridge College? No, I first heard of that this morning when it was discussed, but I was aware of the letter that had gone to Mr Doll in January following the remuneration committee making the offer to him and his acceptance of that in January 2013. What would cause you to qualify accounts? Was this not a material issue that would have subsequently led you to do that? It is a material issue and that's why in the end there was an emphasis of matter paragraph included within my opinion. The scale of offences shall we say, how important is that compared just that? Let me put it this way, our accounts as a country get qualified all the time by the European Commission because they claim we do lots of things wrong. You weren't qualifying as accounts in the way in which I'd understand accounts to be qualified. I didn't qualify the accounts because the transactions as they had occurred were properly reflected within the figures. The process that had been followed whilst it was flawed in the end and it was a difficult decision that was discussed at length between me and some of my colleagues within Henderson Loggy and also with some of the technical people at Audit Scotland, in the end my view and that was agreed with was that the remuneration committee had made a decision that the college was entitled to make albeit that they had made it within complete information and that was a different issue and that was when I then came to the conclusion that the issue was a governance issue and that was one of the things that delayed the finalisation of the audit and the signing of the accounts for Coatbridge College for the final period because I felt it was a governance issue and I felt that it needed to be reflected either within the governance statement that the college themselves would produce as part of the accounts in which case they had made everything open and transparent and all I needed to do was put an emphasis of matter paragraph into my opinion but if they had declined to include that information about the governance failures in the actual accounts I would have needed to refer to that within my opinion to draw that information out so that it was made public. Okay, two final questions if I may. Firstly, the report that Mr Gray mentioned that has yet to be placed in the public domain can you understand why it's not been put from an accounting perspective can you understand why it's not been yet placed in the public domain? I mean basically the reason it's not been is because New College of Lanarkshire essentially wanted to make sure you know that this was Coatbridge's problem rather than New College of Lanarkshire so that they were trying to do that but also because there were compromise agreements that weren't sure what could be released and we said in the report that they would need to take your opinion before releasing it as well and also there was sensitive information in there some of which you know whether it could be released because of data protection etc okay so that was effective but they have given me permission today to say what the main points we are in in the report have made that clear to the convener. And finally, Cathy, well I just wonder if I could ask did you seek when you were seeking to gain an understanding of what had actually happened did you seek to speak to Mr Gray and to Mr Doyle and were you able to contact them? I did not seek to speak to either of them but I did speak to Mr Keenan. Yeah you didn't feel it was necessary to speak to those two gentlemen? No because you would not normally speak to people who have who are no longer part of an organisation because the evidence trail that should be left in terms of audit trail should be adequate to provide any information that is required. Could I just ask briefly the boundary between internal and external audit at Coatbridge College? If I answer it from the external perspective the external auditors are appointed by the auditor general to audit the financial statements and to put the opinion on the annual accounts of the body but there is also a wider remit in terms of governance and performance that is covered by the code of audit practice that the auditor general and Audit Scotland produce for auditors guidance and internal audit are employed by the college to undertake reviews of any areas that they feel that there is risk that they would like assurance on but perhaps I would like to say a bit more about the role of internal audits to provide independent assurance that an organisation's risk management governance and internal control processes are operating effectively. While we have a number of appointments where we provide what is an outsourced internal audit service so in the context that you are talking about for Coatbridge and New College Lanarkshire we are directed by the audit committee of the organisation to look at various areas over the period of our contract but the audit plan is directed by the audit committee of the organisation so it is weird effectively providing a set number of internal audit days in a year. It is not like a multinational company who has their own internal audit function in-house where they are all the time so it is quite different. We heard this morning that there had been previous voluntary service schemes and 2012 comes to my mind. Who would normally, internal or external audit, have signed off on those in the past? No one would particularly sign off on the schemes although we would have looked at them to see that they were reasonable and it can either be internal audit that looks at them first or external audit that looks at them first. Usually we both get involved and over the course of the various colleges that I have been involved with that has been done either way just to seek what was best in terms of what was required at each college. It has worked in different ways. Kathy and I have been involved with other colleges where it is actually the reverse roles where she has been the internal auditor and I have been the external auditor. The bottom line is that no matter what happens with any severance arrangement the external auditors would always have to look at it because the external auditors are the ones who have to sign off on the accounts so if there are any packages that are being paid to senior employees that are included within the accounts then the external auditors would have to look at them. The internal auditors may be asked to look at them and I think that probably Kathy and I have both had occasions in the past where we have been consulted on the packages that are being paid by other colleges. It depends on circumstances. Some colleges will come to you before anything happens to run things by you if they do not think that they know themselves. The college could have come to either internal or external audit to run the process past them. Were you aware that the SFC had recommended that the college run it past the external auditors, as they said? Did you become aware of that later? I think that the SFC guidance actually says that the internal and external auditors should be effectively. When did you become aware that the SFC had concerns about the severance payment arrangements? Personally, I was not aware until we carried out the report of the new college Lanarkshire. When we were doing the report, which in essence is the basis for what is ended up in the auditor general's report, that was effectively when we became aware of it. The first record that I can find of me recording that was in September 2014. That was a year later. Do you find it strange that the college did not run it past you, given the size of it? It is not unusual for them not to run things past us before the event, but in other cases where we have come and looked at them after the event, there has been business cases and other evidence to support the action that has been taken. In the past, audit has referred to the governance arrangements at the college as being robust. Suddenly, in this report, we have governance problems. There was no hint previously that there was any difficulties with governance, that there were issues around the processes that were following, and if not, what happened here? I think that the thing is going back to Coatbridge College. While in this it has been looking at the systems over the years and there have not been issues in other areas, I think that the problem here is specific to the severance package, because while in this it has obviously looked at other areas during the year and they are all as normal. The governance processes around the other areas that we have looked at are all fine, and the last time we looked at corporate governance, it was fine. I think that some of the committee members today have said that they feel that the processes are okay. I think that it appears to me that it is specific to the problem that you have here in terms of the severance packages. This particular severance package? Yes. Thank you very much, chair. As for a small point of clarification, I was not quite sure what you meant by when you answered Tavish Scott. You said that you received information in a chat with someone in relation to 28 January 2013 or 28 October 2013. You mentioned January 1, and then you said October 1. Is it an important point to clarify? Sorry, that was when you were first made aware? Yes. Yes. No, it was 28 October 2013. That is an important point, because that is when Bigot and Bailey were brought into the equation previous to that in January. You were informed then, and it was just by a chat. A number of the questions that I was going to ask have already been answered, but I just want to ask you, is this an unusual case in respect of Coatbridge College? Would you be expected to be presented with the business cases more timidly? Would you be expected to see the minutes of any remuneration committee and board meeting committees? Is this an unusual case in this particular aspect? Coatbridge College, what has happened? I think that if you look at colleges in general and if you looked at it here, each college had gone through the new College of Architecture voluntary severance scheme. You would have looked at that and said that that looks a reasonable scheme, and you do not need to worry about things. I think that if you are deviating from the new College of Architecture scheme, then if you apply that across the sector, then I think that you have to have robust business cases in behind why you would deviate from the scheme. I think that the other thing is that if you are in any doubt about whether you are deviating or not, then you should be asking them to an external auditor. The thing that I did not know before the process started with the Public Audit Committee was in terms of funding council letters, because we had never been aware of them. At the time when our report was produced, we were not aware of them, but it surprises me that, given that it says in there that the internal and external auditors should be consulted, they have not been. That was another point that I was going to make. There have been a number of mergers of colleges that are not so fine, and that seems to be a case of one particular one that has not been so great. For future advice, would it be that the funding council should look to the internal and external auditors and meet with them before anything happens? What I find truly quite astonishing is the fact that the external audit in September 2014, before you looked at it, Mr Doyle's salary was already in the bank in October 2013, and the fact that you were the auditor, but that Coatbridge was not audited temesli, as far as I can see. What would you say would be the best way to look at any future issues in regard to what is happening at Coatbridge at the moment? I think that the thing is that, with the benefit of hindsight, you look at the position in what could have been done. I think that what you should be looking to going forward is to make sure that there is clear advice and that everybody knows where the advice is and that all parties that are likely to be involved are involved in whatever paper would be put out. In other words, because at the moment if you look at the guidance, the guidance is not written and sent to the auditors, so the internal and external auditors are not necessarily aware of it, other than because it is sent to the colleges and the principles of the colleges. I think that clear guidance goes to the internal and external auditors as well as the colleges would be good. That is a very well made point. As Ms Wiley, in your job as an auditor particularly for colleges and Mr Gray, although that is a very good point to raise, would you not be expected to be aware of the Scottish Funding Council's guidance when you are looking at auditing? Yes, we would be aware of their guidance and we would either receive that from the college themselves or we might receive it from We Keep an Eye on the Funding Council's website where that guidance is published. Audit Scotland also provides guidance to the auditors, which would summarise the information that is available from not just the Funding Council but anywhere else that is relevant to the audit that we are undertaking. It is also important to recognise that external audit does occur after a year-end has been completed and therefore it is not unusual for us to be looking at transactions after they have taken place. Just one small final point. I completely understand that you cannot audit something until it is completed, but internal audit, should it not be more closely involved, particularly when there is this type of situation about rumination? I am not blaming anywhere, I am just saying would it not be the proper process if you are internally auditing something that you should be there? Again, it goes back to what I said earlier on when we were defining the role of internal audit. Essentially, we are almost consultants to the audit committee, so to some degree we are relying on the college making us aware of potential issues. In this case, if it had been a normal severance scheme that you were coming across, potentially they would not need to highlight that because, in essence, there is nothing wrong with the scheme. Next, auditors will be looking at it in due course anyway. Having said that, where you have got this situation, where you have got a scheme that is unusual, then probably it should have been flagged up. Well, definitely it should have been flagged up. Thank you. Just very briefly, it is about the Audit Committee because we talked about remuneration committee in the board, but your relationship is with the Audit Committee mainly. Did you get any minutes of the Audit Committee in the course of the period between January 2013 and the informal meeting on 28 October 2013, and did those minutes indicate that there were severance schemes being considered by the remuneration committee? While we did not attend all of the Audit Committees, we did receive the minutes of all of the Audit Committees. I have to say that, up until the issue was identified with the late production of the remuneration committee minutes, there had never been an issue in terms of receiving minutes late or not receiving information when we thought that we would be expecting to receive it. So, were there specifically any meetings of the Audit Committee in the period between January 2013 and the end of October 2013 that you attended, either of you? I think there was one in June that year, but I need to check. Well, maybe you backed us on that because it was really interesting to know and to confirm that the Audit Committee did not discuss any matters of severance during that period between January and October. Clearly, it is not just the remuneration committee that has had a problem. The Audit Committee appeared to have had a problem. I can confirm that none of the Audit Committees that I was at discussed severance in that period. Although that would be unusual, I mean the severance arrangements that the remuneration committee had approved and on which a letter had been issued on the 8th of February to the principal outlining extraordinary severance terms did not come to the Audit Committee while you were there, either of you. I mean, I would need to confirm, but there were Audit Committees held on 4 October 2013, 6 February 2014 and 7 March 2014, all of which, while in viss attended. Before 4 October, I would need to come back to you, and I haven't got the details at the moment. That would be interesting to know, chair. Thank you. Thank you, Cambian. It's just a couple of quick questions in terms of clarification. In terms of this particular situation, your colleague will have been aware of the SFC guidelines. Is that correct? The questioner? Yes, as far as my where, yes. In terms of the normal process that you would go through as an organisation, you will acquire what you would hope to be all of the information, and when you're going through it and you're putting together your report, if you encountered any potential discrepancies or if you had any questions over some of the information that's being provided, or if you saw that there's potential some gaps, would you go back to the relevant committee or committees or organisations individuals just to ask for further clarification before you end up producing a report? In normal terms, you would, in this case, with the report that we produced, which went across to external audit, because of compromise, agreements, etc. You couldn't get access to someone individuals, which is quite unusual, so we could only take our report to a certain point, and after that, Kathy, because she had the additional responsibilities and respect of the external audit, had to explore the information further than Wylan Bysic could within our report. Although having said that, Tom Keenan, who was on the remuneration committee, he was very helpful to us to allow us to produce a report that would be helpful to the external auditors. You've both been good enough to mention business cases, and I think that Kathy Wiley suggested that you would normally expect to see a business case in the records. I'm wondering whether you could tell me what kinds of things would actually be in a business case, because none of our witnesses has yet managed to produce even a heading. You would expect to see some rationale for why the person would be leaving and why there would be the need to be paying some kind of voluntary severance. If there was an enhanced payment that was being proposed, you would expect to see some kind of costing of that to explain how long it would take to pay back the cost of that in terms of how long it would be before the money would have been recooked. Right. If I understood that correctly, you would be looking for some numbers to work out what the cost would be. I guess what I'm still concerned about is that I have no understand what the benefit might be against which you would be offsetting that cost. Sometimes there are situations where it is helpful to move, in this case, in terms of talking about mergers. It's helpful to move things forward if some of the people who are not going to be involved long-term leave earlier to allow things to move forward. That might be an argument that would be used in a business case for someone to leave early or be given an enhanced package. Would that need to exceed payment in lieu of notice? No, payment in lieu of notice is one of the things that the funding guidance says should only be used in exceptional cases. If there is an exceptional case, the circumstances giving rise to that exceptional case should be documented. So that somebody receiving a severance enhancement for leaving early would be, in your view, getting less than payment in lieu of notice? They might receive more than the statutory minimum that is required in a severance position, but they might also receive payment in lieu of notice if the point at which that was agreed did not require them to serve the notice period that they were contractually entitled to. Okay, if I get to the very specifics of Mr Doyle then, who, as I understand it, was contractually entitled to six months notice, which I think is relatively unusual and probably not a statutory mimic, then could you give me any rationale from your collective experience as to why anybody might feel entitled or required to pay in more than six months lieu of notice and the other payments that were known to be relevant at the time to them, if not perhaps to the remuneration committee? Okay, sorry, I ended that sooner than you were expecting. We're looking at a package that seems to have been six months in lieu of notice and ignoring the pension actually more than what was then regarded as the lonexer scheme. Could you give me any justification, given that we're talking about large sums anyway, why there should have been an enhancement to that in the context? I'm just trying to find a way of rationalising this. You didn't have to, but could you give me a clue as to how we might? I think in terms of this particular decision, the original decision was taken back in January 2013 and then that was reiterated in October and I think it's difficult with hindsight to be able to understand why it was reiterated in October, but I think that there was legal advice around contractual obligations in terms of the paperwork that had already been signed at that point. Thanks me to the other point because you had previously said that you thought that the offer which had been made sometime earlier in February as a result of the January meeting had been accepted by Mr Dawley and I think that you were the only person who suggested that, which doesn't make it wrong. Presumably that referred to some offer which would have been relevant had Mr Dawley been living in July. Yes, but that offer also said that the leaving date was negotiable. So there is somewhere an offer document which I don't think anybody's yet seen by which the remuneration committee might have felt they were contractually bound in October? Yes. Could you offer any suggestion as to why that's not been mentioned until this moment? I'm not sure. I think that some of the specific detail has not been mentioned because the Auditor General's report has dealt with things at a higher level. Questions from Mary Scanlon, then I'll be shooting them all. Yes. Prior to January 2013, were the remuneration committee minutes published on a regular basis? Remuneration committees don't meet regularly, they only meet when they need to meet. That's one of the difficulties that we had in terms of not realising that we hadn't been given the minutes. We have the scheduled board meetings and audit committee and other meetings, and we know which minutes we should expect, but remuneration committee minutes, we usually ask for these at the end because we won't know when they have necessarily taken place. Nine months to publish the minutes, would that be unusual? Yes. Second point, did you check the severance payments to the principal where in line with his contract of employment, we've never seen the contract of employment, but I'm assuming that you would have seen that as part of your audit. I didn't see the contract of employment, but I was given written assurances by one of the HR staff in New College of Lanarkshire that that was in the contract of employment. That the full 20 months, 21, 3 and 6— The only element of that contractual was the six months pay-in-law of notice because the contract of employment had a six-month notice period contained in it. Final question, what were the decisions that the principal was making in which he didn't have the authority to make as noted in the external auditor's report? The reason that I included that was because there was no evidence other than some information that Mr Doyle had offered a severance package to a member of staff that was— Percent pay increase? Well, there was the 19 per cent pay increase, but there was also the 18-month severance package that was mentioned by one of the remuneration committee members this morning. The letter was also sent in February 2013 from Mr Doyle to the member of staff offering 18-month severance when there was, at that point, no other agreement to that package. He was making those decisions without referring to the remuneration committee or the audit committee or, indeed, anyone else? Where that one probably would have gone would have been the HR committee, but I'm not aware of it having done so. The audit committee has come up in discussion in this particular session, and I'm not aware of the membership of the audit committee at the time. To the previous panel, when I posed the questions, I highlighted that members were members of other committees in the college. Was there any crossover in terms of membership of the audit committee and of the remuneration committee? I believe that there was, but without checking specifically, I wouldn't like to be sure today. Okay, that's fine, thank you. Can I just clarify whether Mr Doyle attended any of the audit committee meetings? Mr Doyle attended audit committee meetings. He was there in his capacity as principal. There was normally an element within the agenda for him to give a brief update to the audit committee members about what had been happening in the college and perhaps make comment about specific things that were happening. He was also there to provide advice and answer questions on individual items on the agenda. If they need a rose, he wasn't a member of the committee, obviously. From the middle of 2013 onwards, he didn't attend the committee any more, but that wasn't necessarily unusual in general. It was unusual in Cotebridge's context. I was just looking at this from the outside in and looking at the checks and balances that are in place. Paid into Mr Doyle's account was £304,000 in the 25th of October, so that's a lot of money to be paid into somebody's account. We've been advised by the Scottish Funding Council that they've prevented this as much as possible from ever happening again. The process has been followed here, and it's pretty straightforward. Somebody's agreed something at a committee. The director of finances arranged for this money to be paid into his account. How do you stop that from happening? If we say that the auditor should be made aware of this and somebody within the college doesn't do that, do you not feel that we should be able to recover the money then if that process hasn't been followed through? I think that we need quite a lot of legal review of that. In the end, the conclusion that I came to was that the college board members were entitled to make the decisions that they made. At that time, the responsibilities of the board members were that they could make the decisions that they had done so, and therefore the payment was legitimate. To be fair, I'm actually taking it to the next part of the process, which is paying money into somebody's account. Does it just the director of finance that says, yes, I'm going to arrange for this money to be paid in, and that's it? Nobody then says, this is £304,000, it's a lot of money. Somebody needs to get on to the external, internal auditors before we can transfer this money into somebody's account. For all we know, what kind of checks and balances are put in place to stop that from... I would expect, no matter what it was for, it doesn't matter who's agreed to it, whatever's happened, somebody says, £304,000 surely... I mean, I know of organisations who need three signatories in their check account to pay... I know of bowling clubs who have got three people who need to sign for it, so surely in a college, it's not up to one person to make that payment of £304,000 without a process that at least confirms it, it's the money that should be paid. There were processes within... Can you tell me, can you take me through that then, what I've happened, in that case? I don't know specifically what happened in that case. I know that generally there were levels of delegation in terms of who could sign off on payments within the college and any testing that we had done and that internal audit had done in the past had shown that these limits were adhered to and that authorisation processes were applied correctly, without going back and getting further in. You don't know what process was followed from Mr Doyle, so £304,000 had been paid into Mr Doyle's account. You've carried out an external audit, Mr Gray's carried out an internal audit, but we don't know what process was followed to make sure that the due diligence was there, because for all I know, one person could have agreed to give to process that amount and nobody's checked it out. No, what we know is that there was a process that had been undertaken within the college and that there was information that showed that that payment had been approved and therefore it was legitimate for it to be made. After that approval takes place, one person is responsible for making the payment now. I thank you both for your attendance this morning and I now briefly have a brief interval to allow for the next witnesses to change over. I welcome our final witnesses today, so our witnesses are, for the next panel, some order, order, please, as Caroline Gardner, the Auditor General for Scotland and Angela Canning, the Assistant Director for Audit Scotland. I understand that Ms Gardner has a brief opening statement to make. I thank you for the opportunity to support the committee once again in investigating the issues raised in my report on severance arrangements at the former Coatbridge College. I welcome the committee's decision to take a call for evidence on these matters following my briefing to the committee in early September, particularly given the complex nature of the issues raised through the audit process. Since then, you've heard evidence from individuals who were responsible for governance at Coatbridge College during the murder in 2013. There has also been evidence that concerns about severance and salary enhancements were widely shared. Some of that evidence has provided helpful insight into key discussions and decisions on severance at Coatbridge College, as well as the difficult environment within the college during the murder process. However, a number of pivotal questions remain unanswered when you started your session this morning, in particular about the timing of the events on which I reported, the information that was available to the Immuneration Committee in carrying out their responsibilities and the role played by Bigot Bailey in advising at the Immuneration Committee. Those need to be addressed if lessons are to be learned from what happened at Coatbridge College and public confidence restored in the ability of colleges to manage public funds openly, effectively and ethically. I therefore welcome the opportunity to explore those questions further with members today, and I'll be happy to do so again in future if it assists the committee and also citizens, taxpayers, staff and students across Scotland to gain a full and clear picture of what happened in this case. Okay, thank you, Ms Callaghan. I'll just open questions by referring you to Exhibit 2 of your report. You'll see here from the bullet points starting with the principle making decisions that he didn't have the authority to make. I see you've raised a number of other points in the bullet points, but I think we've fared from the external auditor in connection with the decisions that were taken by the principle that he didn't have the authority to make. I'll come back to that. You'll see from the other bullet points here agenda papers for the Immuneration Committee either not being fully prepared or kept, minutes for the Immuneration Committee not fully recorded, minutes not being properly produced or reported timelessly. Can I just ask who you would see as being responsible for that process not being followed through? You've fared from Mr Doyle last week who advises that he felt that it wasn't appropriate for him to attend the Immuneration Committees and advises that he absented himself during the process to ensure that there was no potential conflict of interest. Could you advise who you think should have been responsible for those four bullet points? It's very clear, both in general governance terms and in the funding council's guidance about severance, that the principle had a key responsibility in ensuring that the Immuneration Committee had the information and advice that it needed to carry out its role. The evidence that you heard last week suggested that Bigot Bailey had been brought in around 10th or 11th of October in order to provide that advice to the Immuneration Committee on 28th of October. I have two concerns about that statement. The first is that, as you've heard today, the decision was made about the principle's severance package at the meeting on 28th of January, and indeed a letter was issued to Mr Doyle and accepted by Mr Doyle on 29th of January in relation to that offer. By the time the 23rd of October meeting happened, the issue of advice was really moot, it was beside the point. My reading of the minutes of the meeting on the 23rd of October suggests that Bigot Bailey were not brought in to provide that role of independent advice about the broader question of severance package, but instead about the question of the entitlements that had been generated by the issue of offer letters to the principle. We think perhaps to the other members of the senior management team back in January. Can I just revert you back to the evidence that you had heard earlier from the Immuneration Committee? One of the questions that I raised with them was the guidance from the SFC, which had been in place since 2000. Perhaps Bigot Bailey should have provided that guidance to the Immuneration Committee, and other guidance, indeed, should have been always available. Do you think that they should have provided that guidance to the committee? If they were appointed to carry out the role that Mr Doyle suggested to you last week, then I would have expected, first of all, for there to be a paper from the principle to the Immuneration Committee at the appropriate meeting, and I'm not sure that that is the October meeting, being very clear that he has a conflict of interest and proposing that independent support to the committee is provided by Bigot Bailey. There's no mention of a paper of that sort in the Immuneration Committee minutes, and Ms Wiley didn't find any evidence of that. My view, though, is that that's not the role that Bigot Bailey was playing at the 23rd October meeting, given that the decisions had already been taken at the meeting in 28 January, and an offer had been issued and accepted immediately after that. I'm sure that Mr Doyle advises that anything related to his specifics package he sent to himself from that, and there was no suggestion that he was involved in any of that, but do you agree with that statement that he made? It's certainly true that Mr Doyle wasn't at the Immuneration Committee on 28 January or 23 October, according to the minutes and the testimony that you've heard today from Immuneration Committee members. However, it's clear from the funding council guidance that the principles role goes further than that. I know that members have a copy of it. There is a very specific reference within that guidance, but the principles role is a very sensitive one. It says that it is not acceptable for the accounting officer to abstain from their personal responsibilities by contending that they're not part of the Immuneration Committee or form any part of the decision making process. That's clear in the funding council guidance. I would therefore have expected him to place on the record the steps he was taking in order to handle his conflict of interest and make sure that the committee has the advice that is needed to carry out its role. I just finally raised two questions with you. One is that the external and internal auditors didn't play a role. We're pretty clear about this now that there was no from the evidence that we received this morning that both the internal and external auditors weren't made aware of the proposal that was on the table. Do you think that there was any process followed to try to prevent the external and internal auditors from perhaps passing their eye over this? Maybe they would have rejected it. Do you think that it was convenient for perhaps Mr Doyle for this information not to have been provided? You heard from both Ms Wiley and Mr Gray this morning that it is unusual for them not to be consulted informally when these matters are under consideration. It is clearly a requirement in the funding council guidance. You heard my professional view when I gave you evidence back in September that there had been a withholding of information through this process from the Immuneration Committee, and I don't think that is a coincidence that the auditors weren't asked either. Would you put the blame fairly and squarely on Mr Doyle for that information being withheld from the Immuneration Committee and from the external and internal auditors? Mr Doyle, as principal and accounting officer of the college, had a responsibility to ensure that the Immuneration Committee had the advice that it needed. If he had done that, they would have had the funding council advice, which would have made it clear to them that they were expected to consult external and internal auditors. I think that the chain of events flows from the failure to ensure that the Immuneration Committee had the independent advice and support that it needed back in January when the original decision was made. So you think that Mr Doyle is withheld information now? And to the financial benefit as a result of that? I think that it is very clear that he bears responsibility for the information not having been provided to the Immuneration Committee. We have heard quite a few opinions over the years about auditor general reports, but we have never heard them described as incomplete, inaccurate and vexatious. Can I perhaps ask you to respond to Mr Doyle's description or his opinion of the auditor general report on Coatbridge College? Of course, Mrs Scanlon. You heard a little from Ms Wiley earlier about my role, which is to appoint an external auditor to all of the public bodies in Scotland that come under my remit to set out their responsibilities in terms of the things that they are required to look at and that that involves an annual audit of the financial statements plus some wider dimensions. I also have a power to report matters arising from those audits to the Parliament through this committee under section 22 of the Public Finance and Accountability Act. As you would expect, I do not take either of those responsibilities lightly. I take them very seriously and I think that they are a key part of the checks and balances for the way public money is used in Scotland. When Ms Wiley was carrying out her work, she kept in very close contact with my team in Audit Scotland about the concerns that she was becoming aware of and the issues that she was seeing. My team worked with her to test and challenge the evidence that she was seeing and the other evidence that she might look for, the relevant guidance that she might apply, and came to the conclusion quite easily that there was a section 22 report here that it was a matter of public interest that I should bring to your attention. We applied the same care, attention and professionalism that we do to everything else in bringing the report together. I think that much of the other evidence that you have heard in your evidence sessions has confirmed that. I think that the committee will draw its own view on the quality of the report that I produced for you. Thank you. I am very grateful. I think that it is important to get that on the record. Can I just ask—I appreciate that you have listened to all the evidence that we have also heard. Are you any clearer now who actually developed the terms of severance payments to Mr Doyle that was presented to the remuneration committee in January? I think that that is one of those difficult issues that we come across from time to time in audit work that often what we are faced with in these circumstances is the absence of evidence. What we would expect to see in normal circumstances and what is very clearly good practice is a set of papers for the remuneration committee in January 2013 that included a scheme overall for severance for staff at the college and a business case in its application to individual members of staff, particularly senior members of staff. We have never been provided with that evidence, either at Audit Scotland or Kathy Wiley as the external auditor. You have heard evidence this morning from the remuneration committee members that the advice was verbal and was provided by the chair. You have heard evidence as well about a letter before that from the principal expressing an interest in leaving under a voluntary severance scheme. There is no evidence that anybody else provided advice and certainly not that steps were taken to provide independent advice to the committee at that point. My final question relates to paragraph 22. It appears that the chair did not provide the remuneration committee with complete or accurate information about the advice provided by the Scottish Funding Council. You use the word and so it appears. Having heard the evidence that we have all heard in the sessions last week and this week, would you go further now and say that would you be stronger than it appears that the chair did not provide? Would you now say that the chair definitely did not provide that would you strengthen that point given the evidence that you have heard? I think that the committee heard very clearly this morning from members of the remuneration committee that they did not have access to that guidance, even though you know from evidence from both Mr Doyle and Mr Gray and the funding council that it had been provided to Mr Gray in advance of the meeting. That concern is heightened by the wording of the minute of the remuneration committee on 23 January, which indicates that a misleading version of the funding council's view was relayed to members of the committee. It was not only that the information was withheld but that misleading information was given. That is my view, Mrs Gray. Serious, convener, if I just make final questions for you. How serious do you feel that this issue is that we are looking into today? I think that it is very serious. As I said when I gave evidence to you back in September, it is very unusual in my experience to find a case of this nature. I think that the overall failings in governance are very serious and in my view there was a deliberate withholding of information from the people who were charged with making a decision. The amounts of money involved, you might argue, are relatively small although I think that people across Scotland would disagree with that heartily and I do myself. I think that it is very important that any of us as citizens and taxpayers and people who rely on public services can depend on the people charged with stewardship of that money, that it is being handled well and in line with all of the expectations of people in public life. I reported to you because I think that that did not happen in this case. Can I just clarify what is Scotland's understanding of what happened before the meeting on 28 January 2013? What we, I think, learned this morning is that Mr Dall wrote some kind of note to his chairman saying, I want to go. Mr Dall and Mr Gray then, if I get this right and please correct me, spoke to the then chief executive of the Scottish funding council and got the advice that we all know now that I was not given to the meeting on 28 January. At that meeting, the remuneration committee took the absolute decision about Mr Dall's package full stop and after that it was a done deal. Would that be accurate? Yes, the only bit of that I can't actively confirm as having not seen the evidence is the letter or memo or whatever from Mr Dall to Mr Gray. We know from the evidence in front of the committee that on 25 January, the then chief executive of the funding council confirmed to Mr Gray the conversation that he had had with him about voluntary severance and forwarded a copy of the guidance with the funding council's expectations. We have seen a copy of an offer letter to Mr Dall from Mr Gray dated 29 January, which set out the terms that were discussed at the meeting on 28 January. That was returned signed by Mr Dall on the same day, on 29 January. We know that the settlement agreement between Mr Gray and the college was signed on 11 October in advance of the 23 October remuneration committee at which Mr Dall told the committee that Bigot Bailey was providing independent advice on how to handle the conflict of interest in which he found himself. I was conscious of the evidence that Mrs McCarthy gave this morning from the remuneration committee in which she said that they were advised that there were many of these kind of deals across Scotland, across the college sector. What's your view of that? Is it the case that all those other deals, if that is the right expression, accorded with the need to have a proper business plan and appropriate governance procedures in place so that they were, in that sense, at least acceptable? In my wider report on Scotland's colleges 2015, I identified six colleges where auditors had raised concerns about severance arrangements in the colleges going through the reform process. It gave details of all six. Two of them—Cokebridge and North Glasgow College—were serious enough to warrant a section 22 report. We know that in other colleges there are colleges that paid more than the amount that is recommended in the funding council guidance and that they were permitted so to do under that guidance, subject to certain conditions. I have no evidence to suggest that, where those higher deals were paid, that was not done as a result of a proper process and a proper consideration of the balance of costs and benefits of doing so. I know that you have requested further information from the funding council about that, but you have the assurance in my earlier section 23 report that, where other arrangements have been made, auditors have not raised concerns about the process that has been gone through, except in those six cases. Thank you. On Billy Biggett in relation to the convener's questions, when you point a lawyer, the lawyer gets a brief. Given that it was clearly Mr Dahlio appointed Billy Biggett—again, it would be interesting to know about the governance of that decision—what brief he got, Billy, but give it got? I have not seen the brief that went to Biggett Bailey, but in reading the minutes of the remuneration committee on 23 October, the impression that I form is that they had been asked to provide advice on the commitments that the college had entered into following the remuneration committee on 28 January. There are some quite surprising comments in there about the advice that, although the funding council was unhappy with the arrangements that had been made, they were within the college's competence. That is certainly true, but it does not sound to me like the advice that you would be giving if you were being asked to handle a conflict of interest that the principal faced. There is also a comment in the minutes that confirmed to the remuneration committee that they did not need the board's approval in order to do what they had done because they had delegated powers. That leads me to believe that they were advising on the legal obligations into which the college had entered because of decisions that were taken at the remuneration committee back in January. That belief is heightened by the fact that Mr Dahlio's settlement agreement was signed on 11 October in advance of the remuneration committee on 23 October, on which bigot bailiwyr providing support. Thank you. On the evidence that Mr Gilever gave this morning from the remuneration committee in which he suggested that there was no evidence whatsoever that commercial income that Coatbridge College had gained had been used to pay the enhanced nature of the principal's settlement over and above that that was provided by the funding council. In order to discuss those deliberations on this, have you any reflections on that evidence? Two reflections I think, Mr Scott. One, I fully share Ms Wiley's comments earlier that that's not a meaningful distinction in this context. It's all college funding and it's there for the purposes of the college. Some of it will still be public money from local authorities, from other public agencies. Secondly, again, the funding council guidance, which is very useful on many aspects of this, says very clearly, in principal colleges can supplement severance payments with private funds. However, in such cases, the college still has a duty to behave prudently and responsibly in using funds held on trust. We know also from the Office of the Scottish Charity Regulator that they have concerns about the extent to which the members of the board were fulfilling their role as trustees in using funds for this purpose. I think it's a distinction that has no meaning. You could argue that students suffered while Mr Doyle got his big pay-off. It would be another assertion that could be made given how many assertions Mr Doyle made in that. The final one was that I was genuinely puzzled that—well, not puzzled, but I was genuinely taken aback that Tom Keenan reported that when the chief executive of the funding council turned up at the board meeting on the 23rd of October, he didn't lay it on the line. Were you somewhat—I mean, I suppose there are two perspectives on that. Firstly, it was done deal, as we already now know, and, therefore, it nearly didn't matter what Lawrence Howell said at that meeting, because the thing was already sorted. Or was it that the level of mistrust and disquiet about the whole thing was at such a level that he didn't feel it was worth it? Again, do you have any reflections on why the chief executive just didn't make very, very clear in simple and abrupt language how displeased the funding council was by the whole thing? I was surprised to hear it, and I have to say that it's not the impression that I took from the minute of the board. It was actually the board and not the remuneration committee at which Mr Howell and Ms Drysdale attended. I was, though, taken aback by the timing of their presence at the meeting. The meeting opened at 7 pm. There was some introduction before Mr Howell was invited to speak. The meeting records—the minute records—that Mr Howell and Ms Drysdale left the meeting at 7.10 pm, so just 10 minutes later. There followed general discussion between the chair and the board on the issues raised by Lawrence Howell, and then the management team representatives joined the meeting at 7.15 pm. So there's only five minutes for discussion. I find that surprising, but you heard evidence from Mr Howell last week, and, in my view, the minute gives a clear record of what he put forward to the board, the way in which it was received is harder for me to comment on. Last week, Mr Howell and Mr Gray were quizzed about the point of departure of Mr Howell or the circumstances around that. There was no mention made at all that Mr Howell had applied for any severance package in January. Does that not seem extraordinary? Did that come out at any point in the audit prior to this? As I said in response to a question from Mr Scott, we have never seen the letter that was referred to. It was evidence among the Immuneration Committee members about the form in which Mr Doyle's wishes were made known to Mr Gray, but it's clear that there's no evidence either of a scheme being in place for voluntary severance or of an application from Mr Doyle or other members of the senior management team, who's voluntary severance was also approved at the same Immuneration Committee at that point. There is a general concern, which is one of the cornerstones of my section 22 report, that the lack of that evidence is very poor governance. I think that there's a wider question about whether Mr Doyle could have hoped for or wished for a continuing role with Coatbridge College up to the point of merger and then with the successor Merged College North Lanarkshire College. I think that you heard evidence last week that Mr Doyle hadn't applied for the post of the principal of the Merged College, and my understanding is that that was advertised at the point when Coatbridge was outside of the merger discussions. At the point where Coatbridge rejoined, the process was either complete or very nearly so, and Mr Maguire had been appointed as the principal designate, so at that point he had missed the opportunity of the principal's post within the new college. However, as you also heard from Mr Howell last week, there were examples of principals within Merging Colleges taking other posts. They may not have been successful as principal, but they may have been well able to serve in another role in the new college. I can also see no reason why having been unsuccessful and perhaps feeling that voluntary severance would have been the best outcome for Mr Doyle and for the college, but he could not have been expected to serve his notice period and do his best to see the college through to the merger at the end of March. I suppose that my concern here is that, as I see it, information was concealed from this committee. Information was not volunteered to this committee when there was the opportunity to do so, and that seems odd. I share your concern about it, Mr Beattie. I think that there are clear discrepancies between the evidence that you heard from Mr Gray and Mr Doyle last week and the other witnesses that you have heard from. Clearly, I am appointed by the Parliament to report to you quite independently on what I and my auditors have found in these circumstances, and you have heard my very clear view about the failings in this case. Just touching on the informal meetings that the Immuneration Committee appeared to have, it seems like that was a regular situation that, frequently, they met informally and rarely formally. From the minutes that we have seen, they are fairly sparse in terms of giving us any real grip of what decisions were taken and so forth. Previously, auditors have said that governance was robust. Did the auditors know anything about, for example, those informal meetings and the decisions that were taken through that, and how were they recorded? It just seems extraordinary. I am not sure that I have heard very much evidence about informal meetings of the Immuneration Committee. I think that there was a meeting in January and one in October called because there was an issue in which the chair wished to discuss in the first case and because the funding council's concerns had been relayed to him and to others in the second case. I agree with you entirely that the minutes are thin. I think that, as you pointed out in a question earlier, one would expect to see more than action points and instead some record of what had been discussed on the views that were put forward. The auditor's report is very clear. First of all, in paragraph 21 of the auditor's report, which is in the public domain, she concluded that the governance lapses arose as a result of the established and expected process and procedures that had previously operated well within the college, not being followed by a small number of people. The lack of openness and information about the actions that were being taken made it difficult for board members to scrutinise and challenge these actions. She also said elsewhere in the report that, in her view, the governance failings improved slightly after late October 2013. My concern about informal meetings was that it was actually one of the remuneration board who actually said that, from time to time, they would just have a quick informal meeting to make a decision. I am sorry if I missed that evidence this morning. I did not hear it and I would not comment on it. It is not my understanding from Ms Wiley as the external auditor and it certainly is not supported by the conclusions that she placed in her annual audit report on the overall process that has been followed. I must apologise that I am going to leave shortly. I have really just one question. Given that we now know that the principal applied for severance, the chair called a meeting at which he misled the committee, I think that that is clear now from the evidence, and he immediately issued a severance letter, which was immediately accepted, would you have expected the Audit Committee to have been informed of this? The Audit Committee met in June at which the internal or external auditors may or may—I think that they probably were present—certainly one of them was present, and yet there is nothing recorded in that of this significant severance package being agreed. I would not expect it necessarily to be part of the Audit Committee's business. The Audit Committee of any organisation has a clear set of functions, and the Immuneration Committee was set up for the purposes of agreeing senior staff pay, and we know that there were failings in that as well during this period, pay policy for the wider staff and exceptional items like voluntary severance. I think that the more testing question is whether the board was fully exercising its oversight of the Immuneration Committee, and, as the committee has noted, the fact that the Chair of the Immuneration Committee was also the Chair of the board, although permitted at that time, is not good practice in general governance terms. You would have expected that the letter that Mr Gray issued to Mr Doyle and which Mr Doyle accepted to have been reported immediately to the next board meeting? I would expect the decisions of the Immuneration Committee to have been reported to the board meeting. That is normal practice in any organisation that committees with delegated powers report back regularly to the board. I would have expected the process by which the Immuneration Committee made its decision to have been much better than it was. It was a board meeting between 28 January and 25 October, when there must have been board meetings in the intervening period. For the Chair not to report that to the board when it is a huge amount of public money involved? It seems to me that normal good practice would be for the minutes of committees of any board, whether that would be the Immuneration Committee, the Audit Committee or any other, to be reporting that regularly in the meeting cycle would be normal and good practice. Thank you very much. Just a small follow-up from Dr Simpson's issues. I think that most of the issues have been covered, it looks like. It has been a done deal from the very early stages in January, but as we have heard from evidence, there were board meetings and, obviously, there were finance committee meetings, etc. Surely, if this had been a done deal, as it seems to have been, from 28 January, and that was reported to the board meeting, concerns would have been raised at that point. As a committee and as an Auditor General, how can you ensure that these meetings are conducted properly and that the minutes are passed on? Basically, what we are saying is that the chair, Mr Gray, of the Immuneration Committee, withheld evidence to the board and such that all this money being paid out, a severance payment, which people did not think that two members anyway did not agree that that was actually a correct minute. I think that I can probably only refer back to the evidence that I gave when I met the committee on this subject back in September, that good governance is there for a reason. That manages in any sector, in the public sector, in the private sector, are professionals who are paid to carry out a role for the organisation and who very often will have a self-interest as well. The corporate governance system is a system of checks and balances, which is designed to safeguard in our world public money and make sure that the interests of the individual do not get satisfied at the interests of all of the rest of us who are funding public organisations. In this case, the system of corporate governance failed and it failed in the view of the Auditor General in my view because of the actions of a small number of people. It is always very hard to put in place systems that can cope with people actively working to circumvent the checks and balances in place to achieve a certain outcome. You have heard evidence from the funding council that their veto powers now, in relation to early severance, would stop this from happening again. I reported in my report on Scotland's colleges that, in my view, in light of the substantial amounts of public money being paid as part of the reform process, in order to generate savings, they should have had greater monitoring and oversight of what was happening across Scotland. I think that it is always the case, and we know that in not just public organisations but much more widely, that it is very hard to put in place checks and balances that will get around the risk of individuals colluding to achieve a particular outcome. I have one small follow-up. You do not have to answer this if you do not wish to, but Mary Scanlon alluded to earlier evidence as well. You have the word fraud, and part of the definition of fraud is withholding evidence. It is quite clear that, from 28 January, this was a done deal, and it was passed through. We did not have another meeting until October of the rumination committee, but there were other board meetings and other meetings as well. The evidence of this minute and others was withheld from the board meetings. Is that a criminal offence? The first thing to say is that I absolutely share the committee's frustration about this matter. People across Scotland who are looking at this matter will feel a real sense of outrage that this has happened. The challenge that we have, and I think that you heard a flavour of this from Ms Wiley as well, is that what we need to go on is not the dictionary definition of fraud but the legal definition of fraud. The college involved took legal advice, the funding council took advice from its legal advisers, and both came to the conclusion that the likelihood of money being recovered from the individuals concerned was very small and that the costs and risks of doing so outweighed the likely benefit. We have to work on that assumption. Mr Don asked when I originally briefed the committee if there should be a new offence or some other sanction available. I think that that is a good question for the committee to consider. For me, it is just a question regarding Billie. It was touched upon earlier regarding the brief for them coming in. Which committee or committees at the college should have been looking at the brief or should have been provided with the brief for them to have a discussion about it? As I say, it is very clear in the funding council guidance that the principal had the responsibility to ensure that his conflict of interest was properly handled. What I would have expected to see was a paper from the principal at an appropriate stage, and in my view that was not the October meeting but the January meeting, setting out why he believed that he had a conflict and proposing that that should be handled by the appointment of, Bigot Bailey or another law-fork firm, to provide independent advice to the committee, which would have included not just whether they were legally competent to do this, but also the options available to them, the costs and benefits associated with those options, and the process that they should go through. I think that it was entirely appropriate for the remuneration committee to make that decision, but it should have done it on the back of a proper briefing from the principal about why it was required and the way that responsibility should be fulfilled. Should the audit committee or even the board have been consulted on this and this particular organisation coming in to undertake that particular piece of work? I would not necessarily expect that. As my report says, the principal had a duty to take steps to manage his conflict of interest, and in my view he did not do that. Thank you very much. Two questions. First of all, it's unfortunately only now or this morning that I've come to understand that Mr Doyle made some kind of written request in early January, that the meeting of the remuneration committee met in late January and we have its minutes which seem to agree that some package was agreed, that a letter was written by Mr Gray on the 29th, I think he said, and that it was turned straight around by Mr Doyle. And that you've told me that the settlement agreement was actually signed on the 11th of October, which was plainly ahead of the meetings on the 23rd. Do you believe that that was what the remuneration committee thought was going to happen? Was that what the remuneration committee were agreeing to in January? I think because of the lack of papers to that remuneration committee in January and the opacity of the minute and the disagreement about the minute 10 months later in October, it's very hard to be clear what they thought they had agreed. What I heard this morning, though, was that they felt that there was a strong case for the principal's position to be resolved at that point. It's clear that they didn't have access at that point to the funding council guidance, which they should have had. In my view, it's also clear that they didn't have the information that should have been provided to them more generally about the reasons why the principal's position needed to be resolved at that point, what the options open to them might be, and what the costs and benefits of those options would be. The minutes of that meeting in January come to us as an annex to the, effectively, the calling notice for the meeting in October. Is there any evidence at all that those minutes were seen by anybody beforehand? I think there's evidence that they were not seen by members of the committee until the meeting on the 23rd of October in the minute itself, where you start to see the disagreement between committee members about what had been discussed and agreed. I think that that's common ground between the members of the committee who you've heard from. Is there any evidence at all that anybody else will have seen those in between? Not that I'm aware of. My expectation would always be that either there would be a committee meeting at which they would be agreed and then reported to the board or that they would be agreed by correspondence among the members and then reported to the next board meeting. I am entitled to the view on the evidence that we've got that the chairman drew up the letter that was signed on the 29th, effectively, on his understanding of what had been agreed. I don't know whether the chair of the board and the committee had access to the minute of the meeting on the 28th of January when he put together that offer letter, which was then accepted by Mr Doyle. It's very clear, though, in any case, that it would have been good practice for there to be confirmation among the committee members about what they had agreed, and that confirmation would have been much easier to achieve had there been good papers prepared for the committee to consider in the first place. The whole system of governance around the remuneration committee, I think, fell down at that point, and I think the evidence that you've heard suggests that that was more than an accidental failure. Forgive me, convener, but can I just confirm—I'm not trying to put words into your mouth, as always—but I'm getting the impression that there is no evidence of any paperwork between the 28th of January and that letter from the chairman that nobody's spoken about it, nobody seems to have known anything at all about that letter being written. As far as I can see, there's no evidence other than what's still called the draft minutes of the meeting on the 28th of January and a letter signed by Mr Gray dated the 29th of January, which was signed and returned by Mr Doyle on the same day. We have access to that through the audit process, but I have no evidence that anybody else saw that to accept the two of them. We all agreed that the remuneration committee did not have the Scottish Funding Council guidance when they made the decision in January 2013. However, in a letter to Thomas Keenan, the position that was adopted by the remuneration committee at the end of January 2013 was, in my opinion, based on the guidance that existed at that time and, indeed, followed discussion with the Scottish Funding Council at that time. We know that there was no guidance from the Scottish Funding Council or, indeed, discussion with the Scottish Funding Council. Is it fair to say that Bigart Bailey was also misled into thinking that the Scottish Funding Council advised the remuneration committee? I cannot comment on that letter, Mrs Scanlon. I share your view that we heard very clearly from the committee members this morning that they had not had the funding council guidance drawn to their attention. We know from the correspondence that is shared by the funding council that their expectation was that it would be made available to the committee. Bigart Bailey thought that they had been advised. My final question is now much clearer about the remuneration committee, audit committee, etc. I am still struggling to understand the role of Roger Mullin. In an email to John Doyle on 18 August, he proposed agenda issues and one of the proposed issues is voluntary severance. Given that he was the Government's main person to pursue the merger process, what role did Roger Mullin have in agreeing or confirming and discussing the approach to voluntary severance with John Doyle? My understanding is that Mr Mullin was appointed by the Scottish Government to provide support to the merger process and that he provided that support in a number of areas. I know that he was providing support in Lanarkshire and in other parts of Scotland from other work that we have done. I have a copy of the email that Mr Doyle has provided to you as background for today's meeting. My understanding is that what he says is that, on 18 July, he asked myself, John Mullin, and Leonard McTavish to advise on when you might depart. We avoided answering as we didn't have a clear view and didn't know what the wider merger considerations would be. That seems to me an entirely appropriate response, particularly in the context that we hear that back in January, Mr Doyle had made his wish to depart already clear that he hadn't applied for the principal post of the new merged college and that he had, effectively, already accepted an offer of voluntary severance on 29 January. The departure date seems to me to be something that is important, but not central to the matters that you are considering today. Given that Mr Doyle agreed at the end of January and he had a letter of confirmation from John Gray, why is Roger Mullin inviting him in to discuss the approach to due diligence culture study and voluntary severance? I do not think that that is the question that I can answer. I appreciate that. I have just raised a couple of other questions that you have heard from Mr Keenan this morning, who raised the issue about the fact that the Scottish Funding Council perhaps should have provided direct support to board members, which, in this day and age, could be that difficult a process to follow. Could there have been a wayday for remuneration committee members? All of those people were all given this significant responsibility to carry this process through, which is something that not that many of them would have had experience in doing, because we have not had a major process in this scale. Given that the Scottish Funding Council, who had the response that was tasked with that responsibility by the Scottish Government to do that, should have looked ahead of that and said that we need to start contacting those colleges and ensuring that those board members are directly aware of their responsibilities, and that we will support them in that process, is that something that they should have done? I have great sympathy with that convener. As I said earlier in my report on Scotland's colleges 2015, which looked at the bigger picture of all of this, I concluded that, in view of the significant amounts of public money that were involved, the funding council should have assured itself that colleges had the right processes in place and used some money in line with its guidance, and I think that training and support would be an important part of that process. There is no reason why they could not have, particularly when they announced that the process was going to be taken forward. It would not have been that difficult to ensure that all of those individuals were in some way directly appraised of the guidance that has been provided. I think that there were other challenges as well, because some of the local arrangements that have been reached as well, the Edinburgh agreement, the Lanarkshire agreement, all those various ones, but there should have been some form of communication between the SFC and those members directly telling them to take this decision. I distinguished two things there. I said in my earlier report that I think that there was a strong case for the funding council to provide more support to colleges going through the merger process to make sure that they understood what was expected of them, had the right process in place and made good use of public money. In the case of this college, the chair of the board having contacted the then chief executive of the funding council to ask about voluntary severance for principals, and the chief executive having responded saying that he is the guidance, I think that the funding council was perfectly entitled to expect that it was passed on to members of the board and the rememoration committee. I just finally ask for your advice on that specific then in terms of, and I raised this issue earlier with the auditors, in terms of the £304,000 that was paid to Mr Doyle. The point that I keep making is that I appreciate that the board have taken the decision that Mr Doyle should receive this money, but surely there should be some external scrutiny when somebody has paid such a large sum of money, and the external scrutiny should take the form of an internal or external audit. Is that normal practice for organisations to do that? It actually isn't, convener. I understand why you might think that. What the external auditor is looking for and what the internal auditor is providing assurance to the board about is there being proper checks and balances in the system. What that normally looks like is a scheme of financial delegation that says, for small amounts of money, these are the individuals who can approve it, for larger amounts of money, here are the individuals and very often two signatories required, as you were saying, is commonly the case for voluntary organisations and all sorts of things, and what those people approving it will look for is proper authorisation by the board. Now, as far as they were concerned, there was proper authorisation there, and we've heard that the rememoration committee received advice from Bigot Bailey at the meeting on 23 October that that was there. The safeguard that you have, and I recognise that it's cold comfort, is that external audit, as part of its review of the annual financial statements, comes and looks at unusual payments, like severance payments, and if it finds anomalies, will bring them to my attention. Their audit reports address to me as well as to the board of management, and I can bring it to your attention. The question has been assured that there's vetoes in place for the Scottish Funding Council, but, in essence, that could still happen again. If it's a process forward where somebody withholds information, as you've alluded to this morning, and follows that process and people don't get the information that they should get, the Scottish Funding Council can't stop the payment being made. They apparently have that position in place, but they haven't changed anything that's any different from where we've been before. They're significantly to prevent this happen again, have they? I think that, my colleague Fraser McKinley, when we met you in September on this report, talked through the new power of veto, which is there, and our view is that it will help that, while in this instance all Mr Howells, as chief executive of the funding council, could do, was to meet the board for a short period and express his concerns about the process that we're going through, what the council now has the power to do is to veto payment, and, if the payment is made, it's on very much stronger ground in recovering it than it would have been in the past. What's changed then? What legislation has been passed to do that? The legislation that brought the colleges into the public sector, the college reform bill 2013, and the revised funding financial memorandum that sits alongside that sets out the way in which the powers that come from their new classification will be exercised by the funding council. There are real changes. We obviously missed this because this payment was made in October 2013, so this was legislation that was passed. I know that legislation was referring to it, but obviously it's the process that's followed as a result of that in the past. Is the enactment of that legislation given greater power to the funding council, which would greatly reduce the likelihood of this happening in future? OK. I thank the general for the session. Can I measure with the committee as I previously agreed in the private session?