The Office of the Scottish Charity Regulator has said a former college in North Lanarkshire might have broken charity law when it awarded a severance package of almost £300,000 to its former principal, John Doyle.
Coatbridge College merged with Motherwell College and Cumbernauld College in 2013 to form New College Lanarkshire, and Doyle left the organisation.
Scotland’s Public Audit Committee opened an investigation after the independent public body Audit Scotland expressed concern about the total of £849,842 paid out in severance packages to Doyle, five members of senior staff and a member of staff in the principal’s office.
Doyle was paid an equivalent to 21 months of his £116,000-a-year salary on his departure from the college, as well as an extra three months’ pay for overseeing the merger and six months’ pay in lieu of notice, bringing the total to £290,000.
However, the maximum severance lump sum for all staff, including senior staff members, was 13 months’ pay, according to Audit Scotland.
In its submission to the Public Audit Committee, the OSCR said: "The fact that severance packages awarded to some members of staff exceeded those required under the agreed severance package raises the issue that charitable funds may have been misused.
"Charity assets should be utilised for the purposes of the charity and, while it is recognised that the fair and reasonable remuneration of employees is necessary, additional or inflated severance packages may be a breach of trustee duties."
The audit also raised concerns that the board had failed to keep evidence, such as meeting minutes, that the severance proposals had been subject to a value for money assessment and said Doyle had failed to take the steps necessary to demonstrate he had handled the conflict of interest he faced in helping to set his own severance package.
The OSCR submission said this could also indicate a breach of trustee duty.
During the merger, 33 staff left Coatbridge College at a total cost of £1.7m, according to Audit Scotland, of which Scotland’s skills funding body, the Scottish Funding Council, contributed £1.3m and the college contributed £397,945.
Appearing before the committee at the end of last month, Doyle said he took "great exception to the conclusions that were reached and the vexatious statements" made in the audit report, which he said were "totally unfounded".
John Gray, former chair of the Coatbridge College board, also appeared before the committee and said he totally rejected the audit conclusions.
No one from New College Lanarkshire was available to comment.
The committee is due to meet again to discuss governance at the college on Wednesday.