Audit pans misuse of tsunami relief cash

Serious financial mismanagement of publicly funded projects, including a charity fund for victims of the 2004 Asian tsunami, has been uncovered at Salford University.

A "special investigation" by auditors into financial accounting at the university, seen by The Times Higher , found that the operation of Salford's Learning Systems Institute "poses significant risk to the university".

The auditors warned that Salford could suffer "reputational damage" if it became publicly known that half of a £10,500 fund raised after the tsunami was spent on paying staff who provided "no evidence of the results of their work" while the other half had not been spent at all many months after the disaster.

The auditors listed concerns about the handling of several publicly funded grants, including those from the European Social Fund and the European Development Fund.

Their report lists "entirely unreasonable" claims for staff time on projects; "inappropriate" transfers of cash between project accounts; claims for staff time not based on any actual activity; "significant expenditure" on computing and film that was "disproportionate to the requirements of the projects"; and overseas travel costs charged to projects without clear business benefit.

General problems left Salford "open to allegations of falsifying records", the auditors said.

The university declined to comment, but the auditors' report shows that an action plan was introduced to address the problems.

With regard to the tsunami funds, Salford said that they "will be applied to their intended purpose as soon as possible" and that it would "consider whether it is proper" for half the donations to have been spent on staff.

The Times Higher has made a request for more documentation on the problems under the Freedom of Information Act.

A spokesman for the Department for Work and Pensions said: "We are aware of the situation and we are working closely with Salford in relation to concerns." An investigation by the DWP is understood to be under way.