Determined lobbying has led the National Audit Office to turn the spotlight on Hull University's beleaguered business school. Phil Baty reviews the allegations of management school mismanagement The National Audit Office has confirmed that it is to examine the files on Hull University's business school, which has been beset by a series of management and audit problems throughout the past decade.
The NAO's review has been prompted by lobbying from Labour backbencher and Grimsby MP Austin Mitchell, which has attracted the interest of education secretary David Blunkett.
The university has done much to reform the school recently - funding council auditors have already reassured ministers that changes are in hand. But a number of problems that have not come to public notice may come back to haunt the university.
"I've raised a number of questions about what has been happening and I've never had a satisfactory answer," said Mr Mitchell, adding that many of his representations have been met with claims that the matters have been resolved, but that he has not been satisfied by such responses. "This should not be brushed under the carpet with assurances that all is well and it has been taken care of, because, as far as I'm concerned, it hasn't. There needs to be an inquiry."
Many of the problems centre on senior professor Richard Briston, his wife and former colleague, Moyra Kedslie, and another colleague, Robert Flood.
Before a 1997 reform into faculties, business and management were loosely under the umbrella of the school of management, with Professor Briston as dean. Professor Briston is no longer dean but remains a senior professor at the business school.
As dean he was responsible for the department of accounting and finance, headed from the early 1990s until 1998 by Dr Kedslie.
Dr Kedslie, who resigned as joint head of the department during a formal investigation into a management "crisis", continued as a senior lecturer in accounting until she left in September 1999 after requesting early retirement with pension enhancements at an extra cost to the university of Pounds 28,000. Currently deputy president of the Association of Chartered Certified Accountants, Dr Kedslie is due to be confirmed as its new president this week.
Also in Professor Briston's school was the department of management systems and sciences (MSS), then run by Professor Flood, who fell out with senior management in 1998 after he criticised new financial controls over his multimillion-pound overseas MBA programmes. Professor Flood was stripped of budget-holder responsibilities following a 1997 audit of a £500,000 deficit in his department. He left the university in 1998.
Professor Briston's school of management was closed in 1997, and he lost his position as dean in the new faculty structure. The restructure led to improvements in accountability, the university said, and a major review eventually led to moves to set up a stand-alone business school. Last year, most management, business and finance disciplines were brought under the umbrella of a new business school. But while hoping for a new start, staff and other interested parties are determined that past issues are not swept under the carpet. The list of concerns is long.
Emile Woolf College, Malaysia
The THES reported earlier this year that Professor Briston and Dr Kedslie
were "rebuked" by the
vice-chancellor in 1996 after an investigation into their decision to upgrade the marginal degree results of overseas students from a lucrative Malaysian franchise. Professor Briston changed 12 Malaysian students' BSc accounting degree results from third class to 2:2. Higher Education Funding Council for England officials have reported to Mr Blunkett that a university investigation at the time found that there was a "lack of care" towards the Malaysian students and "each result should have been considered case by case by the board". Professor Briston said that although there had been a technical irregularity and he and his wife were rebuked, the university subsequently ratified the changes, finding that as the students had been borderline, the changes were educationally justifiable.
Professor Briston said he consulted an external examiner and two others
about making the changes, and said that the formal rebukes were subsequently
removed from his file. The AUT claimed at the time that there was
a financial, rather than an educational, motive for the changes.
Professor Briston has accepted that he discussed the general importance
of overseas students, including those from the Malaysian operation, at
the same meeting in which he discussed his
decision to change the results. He denies that the financial implications of upgrading the students were discussed. The AUT's account of the meeting is that Professor Briston highlighted the financial implications as a reason for upgrading the students, but Professor Briston maintains that the discussions about the financial benefits of the course were separate from discussions about changing the results.
Further information has come to light that shows other serious problems with the franchise from the outset.
A 1996 audit of the BSc accounting course by the Higher Education Quality Council revealed that approval had been given to the proposed Malaysian deal "following a visit only by" Professor Briston in 1993, "and not involving any person acting for the university as a whole". The HEQC said that "approval had been given without the full scrutiny then expected". The university's validation committee later approved the deal on condition that the registrar and secretary also visited Malaysia. "This had not in fact taken place," the HEQC said. "So students were on the course before the university had met its own condition of approval."
The audit said that the university had no signed agreement with the
Malaysian college. Control of
admissions also seemed to have fallen to the college. Under the draft agreement, entry requirements and the offering of places were the responsibility of the university, the HEQC said. However, "it appeared to the team... that admission decisions were delegated to the college".
The team also noted that, contrary to the terms of the draft agreement, which requires registration within seven days of the start of the academic session, the university did not learn until mid-November 1995 of the students who had been admitted to the college in September 1995.
The HEQC also said that while entry requirements were "comparable in the main" to those at Hull, "there had been some relaxation in view of the different environments in which the respective students study". The team also found:
Mr Smith had been expressing his concern from the outset. When he found out in 1993 that the university's validation contract with Emile Woolf College in London was to be extended to cover teaching in a new school in Kuala Lumpur, he expressed alarm, especially at plans to bring students to the UK for just one year of the three-year programmes.
"If this particular arrangement is accepted, then there is, in my view, absolutely no necessity to take a chance on some completely unknown college in KL... I would urge the most extreme caution in entering into this kind of arrangement... I think this proposal is fraught with dangers. I am certain... it will be seen as a further devaluation of a British degree."
Professor Briston told The THES through his lawyers that the registration
of students, the visit by
university officials to Malaysia and the negotiation of a contract were all the responsibility of the university. He said that a pro vice-chancellor had visited Malaysia in 1994 and given a full report on facilities at the college.
He said that the HEQC report was "reasonably favourable" and that it had more evidence available to it than Mr Smith. He said that Mr Smith's criticisms had failed to convince the university's senior officers, and they had not been borne out by events. "The evidence suggests that the programme was managed in a satisfactory fashion and that it provided substantial revenues for the university," said Professor Briston.
A university spokesman said that the franchise, which ended in 1997, had been monitored closely and that students were subject to the same assessment and quality controls as UK students.
Overseas MBA programmes
Other overseas operations, notably the highly lucrative MBA programmes, have also caused problems. Professor Flood gave a colourful account of his MBA business in a 1996 management textbook. The main aim of setting up the business in 1989, said Professor Flood, "was to generate additional income". "The business was established on informal rules." Private, commercial companies were set up in nine countries, each taking a share of the money.
The MBA business grossed £1.5 million in 1990, £3 million by 1992 and £5.5 million by 1994.
While there were "a small number of crucial rules about finances and quality", "coordination, intelligence gathering and policy setting was undertaken less formally... there was no formal meeting structure... issues were debated over a meal or in a bar".
Things ran relatively smoothly, "with only a few hiccups", said Professor
Flood, because of an informal understanding between Professor Flood and
the agencies. "Sometimes this
understanding broke down and there were squabbles about who was responsible for the problem and who should clear it up, suggesting that a few rules and procedures directed at such incidents might have been appropriate," he said.
"There was some tension between MSS and central administration because... the new operations rarely conformed to university rules and procedures."
Shortly after a new vice-chancellor, David Dilkes, came into place in the early 1990s, "a battery of audits was undertaken as directed by central administration" and "many new rules were implemented".
The Association of University Teachers and other staff had also been furious about the personal financial gains for staff working on MBA programmes.
As Professor Flood described, Hull lecturers were paid for what was deemed additional voluntary work. And some, said the AUT, could add thousands of pounds to their salaries.
As directors of several MBA programmes each, Professors Flood and Briston are understood to have made tens of thousands of pounds.
Professor Briston set MBA course directors' fees at Pounds 2,000 a year
for each location, with £2,500 for each student intake and £2,400
for teaching a single module for deans, professors and heads of departments.
In a 1993 memo explaining his remuneration plans, Professor Briston said
that payment for any one location in any one year should be limited to
£10,000. Deans and heads of department would fly business class,
all others Apex. "It is accepted that these proposals will result in many
staff receiving significant increases in the remuneration paid to them
university," said Professor Briston. "However, it should be borne in mind that these people will be devoting all of their free time to the university and its income-generating activities."
Mr Smith complained bitterly about long absences from Hull of overseas
teachers, and "obscene payments" to some members of the school of management.
He said that Professor Flood was a
director of 12 different overseas MBAs, all with multiple intakes. He said in a 1994 memo to finance director Kevin O'Hara that he was sure Hefce would ask some "interesting questions" if it knew that centrally funded faculty, paid full salaries, were allowed to earn significant sums in addition for off-campus teaching. The course directors' fees were eventually abolished in 1997.
Both Mr Smith and former dean of management Colin Johnson also complained about the quality of the overseas MBA courses.
"Departments like MSS avoid the rules because they feel they rigidify operations; taking away flexibility and killing the entrepreneurial spirit," wrote Professor Flood in his account of his management of the MBAs. Hefce's audit in 1997, Mr Blunkett heard, found that the £500,000 deficit at MSS was believed to have been caused by "inadequate control, full costs of overseas activity not calculated, inadequate financial appraisal and inadequate debt control".
In February 1998, a pro vice-chancellor, responding to criticisms of management changes by Professor Flood, said that Professor Flood's claims that his own systems had been more efficient "were not borne out by the financial records of the period. Nor would the method of (debt) collection which existed at the time (when Flood had been responsible) withstand the rigours of either financial or quality audit."
Professor Briston's lawyers said that much of the MSS deficit was due to matters outside his control, such as new staff appointments. They said Professor Briston had brought the deficit to the attention of the internal auditor several times and that she had noted it in her reports to the university council. Criticisms by auditors of the inadequate debt controls must have related to the university's finance department, not the school of management, said the lawyers.
The school of accounting and finance
The THES has previously reported management problems, described as a
"crisis" in an internal review, at the school of accounting and finance.
In an explanation to Mr Blunkett, the funding council said: "In May 1998,
a working party reported on the management of the school. As a
result, Dr Kedslie was interviewed by the dean of faculty and she resigned as joint head of the school. The working party's report suggested that the school had been driven by income generation rather than academic mission, that although there was now MBA income of £3.25 million, there was poor research leadership, with key decisions concentrated in the head of the school, little consultation, and an imbalance between foreign and domestic activity."
Lawyers for Dr Kedslie have said that the report "also compliments Dr Kedslie on several aspects of her management".
After the 1997 restructure, the dean of social sciences instituted reviews of the constituent units "with a view to meeting the objectives for reorganisation set by the university", according to a university spokesman.
Some of them resulted in recommendations relating to improved running systems for the academic areas concerned. "None of them resulted in any allegations of malpractice." Most of the recommendations have been implemented.
One recommendation was that the university should establish a new business school within the faculty. This came into being on August 1 1999 and led to the abolition of the school of management and the school of accounting. Funding council chief executive Sir Brian Fender's advice to Mr Blunkett in January this year was: "There have been some general problems at Hull, which we were aware the relatively new chairman of governors was tackling.
"Having spoken to the new vice-chancellor, I am convinced that he is
taking all the concerns in hand and is addressing these matters effectively.
He has agreed to keep us informed, and I think that at this stage we should
let him see through the reviews he has initiated." The NAO said it
had had "correspondence" about the issues but could not give any details,
and it had no plans to publish a report to parliament. The NAO would be
responding fully to the correspondent about the issues raised. A university
spokesperson stated: "If the university is contacted by the NAO
it will cooperate fully with any inquiries they may make."