Adam Smith College has hired two consultants to support senior management after staff were suspended amid allegations the college fraudulently claimed European funding.
Louisa Thomas was taken on to lead the organisational development and regionalisation programme, while Jim Godfrey was brought in to provide financial support, the institution has confirmed.
The pair are paid through private companies JM Godfrey Ltd and Thomas HR Consulting Ltd, prompting a senior councillor to raise concerns about the arrangement.
Labour politician Altany Craik, who sits on the local authority’s financial scrutiny committee and also lectures at the college, said: “While I am unable to comment on the work of the individuals concerned, I am surprised that those charged with the governance of the college would enter into this type of arrangement.
“Though there is no question of illegality, it does reflect a disturbing trend in executive payments being handled off payroll.”
The payment arrangements are published in the institution’s register of interests.
The board of management of Adam Smith College has a contract with JM Godfrey Ltd which commenced in October 2012 and can be terminated with one month’s notice. It also has a contract with Thomas HR Consulting Ltd, which was signed in June 2012. The other seven members of the senior management team appear to be paid in a different way.
Interim principal Martin McGuire said both Mr Godfrey and Ms Thomas are “not permanent members of staff”.
He said: “Last year two consultants were appointed to provide senior level support to the college following recent events.
“Both these individuals have been brought on board due to their extensive experience in the Scottish further education sector, to carry out specific tasks on a project basis and over a finite period of time.”
The college is in the process of merging with Carnegie College to form a new regional college for Fife.
This month police were asked to investigate allegations the college fraudulently obtained European Structural Funding that could run into millions.
Staff were also suspended after an audit by the Scottish Government indicated the institution will have to repay a “substantial amount”.
Mr McGuire said the action was being taken following an investigation by auditors into funding received by the college between 2007 and last year.