Dundee University bosses were quizzed by auditors about “fraud” and “unusual transactions” two months before a £35 million black hole emerged.
Documents obtained by The Courier show university chiefs were probed by finance giant Ernst & Young (EY) over the institution’s accounts in September.
The company asked the university’s audit and risk committee 13 questions, with the group’s replies taking up four pages.
University of Dundee chiefs said they were not aware of any actual, suspected or alleged fraud.
Reassurance over finances
They also insisted the university had “adequate financial resources” and “suitable capacity to accommodate a more pessimistic outcome to its budget”.
But two months later, then principal Iain Gillespie told staff job losses were “inevitable” due to a deficit of £30m, which has now grown to £35m.
Gillespie resigned with immediate effect weeks later, leaving his deputy Shane O’Neill to take on the top job.
Job losses could hit 700 while an independent investigation into the turmoil has been launched.
The probe will look at whether the institution’s senior leadership team tried to “suppress information” about the scale of the fiscal trouble.
Investigators also want to know why alarm bells were not raised at the appropriate time.
Last month Mr O’Neill told MSPs at Holyrood he could not rule out criminality.
He said there had been “misleading” information about the university’s financial situation that only became clear in November.
And the answers to auditors’ questions two months earlier raise more questions about who at the institution knew about the impending financial crisis.
‘Unusual transactions’
The documents, shared with The Courier through Freedom of Information (FOI), reveal EY asked if the University of Dundee was “aware of any significant or unusual transactions” entered into.
Its audit and risk committee answered both questions, saying it was “not aware” of any “unusual transactions” or “acted, suspected or alleged fraud”.
And The Courier understands no further correspondence has been sent to EY since the £35m deficit figure was revealed.
A Dundee University spokesperson said: “As is standard in respect of finalising the annual audit process for FY2023/24, we are continuing to engage with our auditors to sign off the annual accounts, which includes a letter of representation.
“We continue to engage with our external auditor as we look to conclude the audit process which will be published.”
EY declined to comment.
On Tuesday, a government taskforce to secure the future of the university was unveiled, with former principal Sir Alan Langlands appointed chair.
Last week a leadership shake-up saw two vice-principals depart while principal Mr O’Neill announced he had recruited a team of advisers to support him through its recovery.
Iain Gillespie will appear in front of Holyrood’s education committee, despite initially turning down an invitation, after Holyrood’s Easter break this month.
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