Nicola Sturgeon has indicated she is open to ordering an investigation into what happened at a college mired in fraud claims, after auditors found the institution failed to meet governance standards.

The First Minister told parliament she was “happy to consider” whether there is “further action” her government can initiate as the storm engulfing South Lanarkshire College (SLC) intensifies.

The Herald has learned complaints lodged in the latter part of 2020 related to allegations that SLC had been used as the base for a covert commercial operation, centred on its construction faculty, through which salaried lecturers were going out to undertake privately paid or “homer” jobs. 

According to claims, this off-site work was done on college time – often when personnel were supposed to be teaching – and using college equipment, vehicles and other resources. Concerned staff members who were not involved allegedly suffered bullying and intimidation.

READ MORE: South Lanarkshire College failed to meet governance standards, say auditors

Asked yesterday by Graham Simpson, Conservative MSP for Central Scotland, whether she would order an investigation and commit to making its findings public, Ms Sturgeon said: “I have some sympathy with the sentiments of that question. I know there are significant issues that have been raised. 

“Colleges, of course, are self-governing institutions, but the Scottish Funding Council has an important role and if the Scottish Funding Council considers it appropriate for there to be further inquiry or investigation, then, of course, it is able to do so.

"I’m happy to consider whether there is any further action or procedure that the Scottish Government can initiate and I will come back to the member in writing if I conclude that that is the case.”  

Her remarks come after it emerged that complaints received in 2020 triggered the appointment of Azets – a company that specialises in audit, accounting, tax and business advice services – and an internal investigation led by Aileen McKechnie, the college principal. It is understood that claims of fraud, theft and general malfeasance are connected to the time before Ms McKechnie’s tenure.

The probe resulted in the production of an audit report that made “a number of recommendations for improvements to internal procedures”. 

The Herald: Andy Kerr (left), a former Labour minister, has voluntarily stepped aside from his role as SLC board chair. Principal Aileen McKechnie (right) has been suspended.Andy Kerr (left), a former Labour minister, has voluntarily stepped aside from his role as SLC board chair. Principal Aileen McKechnie (right) has been suspended.

College bosses said they accepted “all the recommendations in full”. However, just weeks later, it emerged Ms McKechnie and Brian Keegan, interim clerk to the board, had been suspended.

SLC leaders have refused to release the report. However, a plan that sets out the recommendations and action taken to meet them suggests serious failings were uncovered in areas such as procurement, preventing bribery, carrying out supplier due diligence, accepting hospitality or gifts, HR, overseeing budgets and expenditure, stock control, inventory management, and protecting access to storerooms and other locations that are “susceptible to theft”.

Bosses were also advised to tighten processes for course and lecturer timetabling, the monitoring of student attendance, student withdrawals and booking out college vehicles. The recommendations and update contain recurring references to the construction faculty.

Pressure increased further yesterday, with Audit Scotland publishing a report that warned a number of areas had been identified where SLC had not fully complied with the Code of Good Governance for Colleges. This included the board not meeting for five months from June 2021, and the audit and risk committee not meeting for six months from May 2021. 

READ MORE: Misconduct row college accused of failing to act on complaints

SLC stated previously that investigations were ongoing into complaints and grievances on matters “relating to” board chair Andy Kerr, Mr Keegan and Ms McKechnie. It now says the complaints are "against" Mr Kerr, Mr Keegan and Ms McKechnie.

However, college sources insisted the complaints involving Mr Keegan and Ms McKechnie were actually from these individuals and other staff, and are about Mr Kerr and other board members. The Herald has been told the complaints set out concerns regarding alleged conduct and governance breaches. 

In addition, investigations are ongoing into four whistleblowing complaints that were received by SLC between September and November last year. Mr Kerr, a former Labour minister, has voluntarily stepped aside as chair so inquiries can continue.

An SLC spokesman said: “The anonymous complaints received by the principal in 2020 relate to a number of historical issues and concerns.

"The principal sought the advice of the board who requested that the college’s internal auditors (Azets) should conduct a forensic investigation. The investigation was conducted and the report sent to the principal. 

“In turn, the principal produced a management response which the board accepted in full. The management response is publicly available. The current investigations, which are ongoing, include a number of complaints against the principal, the interim clerk and the chair. As they are ongoing, it is not appropriate to speculate further.”