I welcome members of the press and public to the 18th meeting of the Public Audit Committee in 2015. First of all, I will ask all those present to ensure that the electronic items are switched to flight mode so that they do not affect the work of the committee. First, I advise colleagues that the apologies have been received from Colin Kear. I would like to welcome Sandra White, who is standing in for Colin Kear. I move to agenda item number one, which is the decision in taking business in private. The question is that we take agenda item number three in private. I will agree. Colleagues, we now move to agenda item number two, which is oral evidence on the AGS report entitled 2013-14, audit of Coatbridge College, governance of sevens arrangements. I welcome the first panel of witnesses, Derek Banks, who is the former director of the finance of Coatbridge College, and Lorraine Gunn, the former director of H.R. and board secretary to Coatbridge College. As we are tight for time today, we will move straight to questions all the way. I understand as I know what makes statements from Mr Banks or Lorraine Gunn. First, Mr Banks, I welcome you to the committee. First, I will ask you to confirm over what period you were the director of finance for Coatbridge College? From 1 August 2006 until 31 March 2014. During that period, it was your responsibility and the role of the director of finance, is that correct? Yes. Okay. Particularly during the period that the general refers to, you were the director of finance during that period. I was. Were you responsible for the financial arrangements surrounding the severance agreements that were reached? Were you ultimately responsible for ensuring that those arrangements were signed off financially? In terms of agreeing that the funds were available, yes. So particularly in relation to the sevens arrangements for John Doyle, the former principal, you were personally responsible for the financial arrangements around that? Can you clarify what you mean by personally responsible? Obviously, your role—maybe you want to explain what your role as the director of finance would have been when such a sevens arrangement was put before you on behalf of the board. It was only to ensure that the funds were available for that payment to be made. Okay. So you don't have any responsibilities for ensuring that the external and internal auditors were made aware of the arrangements that were being reached in respect of Mr Doyle? No. That would be the responsibility of the Audit Committee to inform them. If you look at the guidance that the funding council did issue in 2000, it clearly states that the accountable officer is charged with informing the auditors of that approach. That would normally be done through the Audit Committee. When the Audit Committee reports to you or whoever reports to you and advises you that a sum of £304,000 has to be paid into an employee's bank account, it's someone who will be very shortly a former employee. Has it never occurred to you that you should at least contact the internal and the external auditors? Is that not something that you as an experienced director of finance would have considered? We did discuss this with Mr Keenan, the chair of the Audit Committee, about our approach to bringing an internal and external audit.  Up until 7 October 2014, the college did not believe that it had any liability for any severance payments because the decisions that were made by the committee back on 28 January 2013 were nullified by Corbyn's College withdrawing from the merger on 25 February. There was no liability up until the 7 October, whereby the Merge and Management Committee met and discussed the severance arrangements that were brought up through due diligence. At that point, I did discuss with Mr Keenan about the approach that we should take. By that point, Mr Doyle and Mr Gray had already agreed to bring in Bigot Bailey to fulfil that role of internal audit, particularly because of the experience in HR and legal issues. You were aware of the guidance that was available from 2000 in the SFC quite clearly. Let's forget about the arrangements of the Audit Committee. You are the person ultimately responsible for signing the check to ensure that this money is provided. That's not correct. What is your role as director of finance then? I'm not responsible for authorising that payment because it was in excess of £250,000. The scheme of delegation means that it has to be signed off by the board. So it's being signed off by the board. What's your role then after that's been agreed by the board? Are you the director of finance, but you can't say, well look, I think that you should refer us to the internal and external auditor. No, I did, obviously, query the payment with Mr Keenan. Why did you query the payment? Because of the attendance of Mr Lawrence Howells at the 23rd of October board meeting. I did after that meeting, I asked Mr Keenan, should I stop that payment? Because I was aware that payment would be made on the 25th of October, I was told because the committee had agreed that payment not to stop it. So on the basis of it, Mr Keenan was the acting order? He was the new elected chair of the board, although that would only mean effective from the first of the member. Anybody who, so the board take any decisions, you tell me that you're not in a position as director of finance to at least say look, I think that they should be referred to the external and internal auditors.  Did you not somebody with the integrity that you should have had as director of finance said, yeah, I'm really sorry about this, Mr Keenan, but you've asked me to make this payment, but this is a significant sum. The guidance says that the external and internal auditors need to be made aware of this. Regardless of the audit arrangements within the college, I want to refer this to the internal and external auditors, because you advised the external auditors, the internal auditors, some weeks later, didn't you, in an informal conversation. So it must have been troubling you during that period. But in terms of the guidance, paragraph 36 details the requirements of external audits, and it recognises that normally they would pick up a post-event organising, so it's not fine. The internal audit, there is an issue with that, and it is clear that internal audit should actually carry out an audit needs assessment when they found out that the college would go through Merger. It's interesting that they did that for New College Lancer in the role from January 2014, but they didn't pick that up for Co-Bridge College when they were both internal auditors for Co-Bridge and Cumbanyl College at the time. But let's stick to the point here. You're the director of finance, I mean, what just clarified for Rickle, what's your annual salary? Co-Bridge College at the time, I think it was low on a left, it was £82,000. Yeah, so it's a significant salary, you have significant responsibilities, you're not just there to just make payments without at least questioning, I mean, did you never ever question payments that were put forward to you before? But I think I've already demonstrated it, I did question whether that payment should be made or not. So why did you question it? Because all you've said is Lawrence Hill's attended the meeting, he's attended other meetings before. So what was the specific, so was your concern that the external and internal auditors weren't aware of this? Is that your concern? So what was your concern? Not just that Mr Hill's attended the meeting because I'm sure he's attended other meetings that didn't stop me from making payments, so what was the specific reason? No, the feedback, obviously, we weren't at the initial remuneration committee meeting and we only attended the board meeting after Mr Hill's had left, but Mr Keenan did feedback to us about what was Mr Hill's concerns. And what were those feedbacks? What was the feedback? Specifically that any agreement above the 13 months would have to have a justification for doing that. And what was the justification then? What? You'd have to ask the remuneration committee for that because I wasn't involved in that, making that decision. Right, so you're the director of finance and you just decide to make, I mean why do you just have a director of finance just to make payments? Is that all you do? No. What was your role within the organisation? Did you not have to make them aware of the finances that were available to the college? Because I understand the college was, there were significant challenges facing the college financially, did you not make them aware of that as well? Not, not in the financial year 2012-13, you actually made a surplus in that year, so for anything before that it would be fine to make those payments. But it did challenge the payment and it did ask whether it should be made or not.  The concerns raised by Mr Hill's was the basis of that. And what was the concerns that you were aware that Mr Hill's had raised? Over the 13 months. Yeah, and obviously the concerns that there wasn't a business case for that. And did you during that period, and this is the last couple of questions from me, did you during that period, was there any exchanges with anybody, either verbally or via email where somebody says, look maybe this should go to the external internal auditors, maybe we should have a discussion about that, do you recall any emails, do you read up and run into that period? Nothing's perfectly about bringing an internal external audit in. No, but never. Do you look back at it now and not say, well maybe I should have called the external an internal audit? With hindsight it's always a great thing but I think, and I haven't discussed it with the chair of the audit committee, Tom Keane at the time, that bringing in bigot really was more effective than bringing an internal audit at that point in time. So I put it to you then, it's £304,000 when paid into somebody's bank account, it's a significant sum of public money that's been paid into that account. You're the director of finance, you must have known somewhere along the line somebody would say, well why did you make that payment, what's the justification for that? And clearly that this issue has now been questioned by God the General, do you not feel some sense of responsibility that maybe you should have probed this to some greater extent? I think I've probed as far as I could do, obviously the ruling committee made that decision in terms of the award to Mr Doyle and the timing of that award. I did question it and we did go through a process with Bigot Bailey to identify that we did follow guidance and that the rules committee had all the information that they required to make that decision. It wasn't my decision to make that payment. Yeah, understand that but you still get back to the issue about external and internal auditors, it's very clear in the guidance. Regardless of what committees it's been referred to, I would have seen it and we do not accept that it's your responsibility, director of finance, to do that. That's why you're paid £83,000 a year to at least say, listen, there's an issue about this payment, Tom, we need to look at this, but external auditors, who am I? Were you in constant contact with, how often would you be in contact with internal auditors? It would pay the audit programme that was in place, obviously I was the main liaison with internal audit in terms of their work programme that would have set by the audit committee. So just to confirm and finally from September, let's say the period from September to October, there'd been quite a lot of discussion taking place about these seventh arrangements, but particularly in October. Through the board there would have been yes? Yeah, so did you have any discussions with the internal auditor during that period? Well the only time I had a strategic conversation about it was on 28 October with him. So you never at any stage during those two months said, why don't I have a chat with the internal auditor and tell them that there's going to be significant sums of money when paid out of the college bank account? I need to have a chat with these auditors to make sure that whatever payment I'm making is going to be accepted by or they're at least not going to have any issues with, particularly the external auditor who would have to sign off the accounts. Again the paragraph 36 of the guidance says that generally the external audit would be formed after the event impacted. I understand that but you still have to go, but you still need to put together a set of accounts, make payments to people and satisfy these individuals, both internal and external auditors. Now you'll know that better than me, the other one is qualified to do this, I'm not. But here's the issue, should you not have done that? Have you not at least had a conversation? I mean during that whole year did you have conversations with the auditors? In general yes, there would be conversations to the end of the year. So why have general conversations with them about other issues? But then this comes up to a really important financial transaction that's taken place at the college and you don't want to make contact with the auditors? We didn't want to make contact with them, we didn't think that it was required because we brought in Bigot Bailey to do that assessment for us. Or so Bigot Bailey or to blame now? So we've got the income on next. I'm not blaming anyone, but they carry it out in the second form. Well to be fair, Bigot Bailey are not the directors of finance, you are. And I take it that they're not responsible for a point in external or at least having liaison with external and internal auditors are they? No, they wouldn't be, but they gave us the advice that the Ruins came into ask for in terms of whether they can make that payment or not. But just to clarify here, because we have Bigot Bailey coming next, at no time did Bigot Bailey say that you don't have to make contact with the external and internal auditors. I can't remember them saying that. So why would it be relevant to bring them into the conversation then? Because they were in actually replacing internal audit in that process because they had particular expertise in HR and legal issues that would actually... So sorry, just to clarify here, you're saying that they were replacing internal audit? Yes. So is that the basis by which Bigot and Bailey were appointed? That's a thousand more days. So there'll be paperwork to clarify that Bigot Bailey were appointed and they effectively took over the role of internal audit. Well that's not what the auditors advised us when they met with us last week. They didn't advise us all the week before. They didn't advise us that they were replaced by Bigot Bailey. And we had that discussion with them on 28 October where we outlined our processes, what were plans to do, and they did not disagree with those processes. OK. Mary Scanlon? Just before coming to Lonnie Gunn, can I just ask? Am I right in saying that when they were looking for their generous payments when you were agreeing to the generous payments as the director of finance, did you confirm to the principal and others that the college could well for the 400,000 above? What the SFC would pay? Not that particular time. Again, the process that we went through started in January 2013 where they were initially going to agree to the 400,000. But there was a shortfall. There would have been yes. There was a shortfall. It was 1.7 million was paid out. The SFC paid 1.3 million. The college had to pay 400,000. Did you OK that 400,000? I would have raised my concerns about it, but ultimately it wasn't my decision to do it. Ultimately, as the director of finance for Coatbridge College, you agreed to that payment of 400,000. I would have told them the risks at the time, but at the end of the late, I would have told them the risks at the time, a potential risk of not being able to meet that. You told them the risks of what? Of the potential of not having the funds to do that. I'm not hearing what you're saying properly. Sorry, just different accents from the highlands. You told them the potential risks of paying out an extra 400,000 more than the SFC guidance. That's nowhere in our evidence. Our evidence is telling us that you agreed to that extra 400,000. Don't you worry, the SFC will pay 1.3 million. I can find 400,000 in the college funds for the 400,000 shortfall. Is that right? No, no. I communicated with Nicholl's Latcher about this issue and the funding council. There was a standard template that had to be completed for a business case. All the figures were on there. I informed both Nicholl's Latcher and the funding council about the shortfall. You informed them. I think that you need to be clear about this. When did you inform them? Did you agree to this 400,000 being paid? Because our evidence is that you did. It had been in March of 2014, they were told. You signed off that check for the additional money, long before March 2014. The only one that went before 31 October was Mr Doyle. After that, it was a process of most people leaving on 31 March 2014. You knew that on Vesting Day, Copebridge College had a deficit of over a million pounds. The 400,000 additional very generous severance payments contributed to 40 per cent of that deficit. You were fully aware of that, but the advice that you gave was that it is okay. We can find that. No, at the time of leaving the college, I was predicting a small surplus of £34,000 up until 31 March, including those payments. And when did you leave the college? 31 March. 31 March. Yes, but I did ask to stay on. When did you start your new job in SQA? It was seven weeks later. Seven weeks later. So, I'm quite surprised that we've got, as a director of finance, your severance due under the new college renaissance scheme was nine months, but you were paid 13, and you got a job seven weeks later, but your payment in lieu of notice was £20,600. And another £5,500 accrued and you'll leave. Not bad money for seven weeks unemployed, is it? I started with SQA as a consultant, so it wasn't as a permanent employee, and I'm still not a permanent employee of SQA either. I've got a temporary contract with them. In terms of my severance arrangements, I was on a retainer to give advice and help to new college latcher, which I did up until May this year. So why would you pay four months more than what you, four months more severance paid than what you would do, compared to all the other payments? Why would you give them more generous payments? Because new college latcher wished me to be on a retainer to give them advice and help when they required it. I'll move to Lorraine Gunn, if I may. Lorraine, 28 January from the Immuneration Committee is very critical. It's actually the heart of the Auditor General's report, which states that the chair and the principal didn't provide the Immuneration Committee with advice provided by the SFC. No evidence that they were provided with a detailed business case. We still haven't found a business case from either of you. The terms being discussed at the Immuneration Committee were not in line with the advice of the Scottish Funding Council. Those are all quotes from the Auditor General. Now I understand that it was your responsibility as the HR director to provide the committee with that advice and information. Is that correct? What I provided in advance of the committee was in response to questions from the chair of the board. He wanted to know from me what was available within the sector in terms of known severance arrangements. The purpose of the meeting, when I was told to call the meeting as the clerk to the board, was very specifically to address arrangements for senior staff. Not at that point in time necessarily about payments, but he wanted to discuss with the committee just generally where we all were at in terms of worries about the merger, etc. However, I was aware that severance was going to come up as part of those discussions. I think that there is nothing general about the specific discussions about 21 months for John Doyle, 3 months for taking him through the merger, 6 months, plus a 90,000 pension contribution. He did get into it. That is hardly a general discussion. That is very specific about Mr Doyle. If you will let me explain, when I was first asked to give advice, it was a broad overview of what was available. I believe that it was the remuneration committee's responsibility to discuss that in some detail, to either form a way forward or to come to an informed decision about what they wanted to do. All I was doing was giving information. In that broad overview of what was available, did you give them the Scottish Funding Council advice, which you had sought and found on the Scottish Funding Council website? Did you give that advice to each and every member of the remuneration committee in order that they make the right decision, informed decision? I believe that I did do that in two ways. I believe that, initially, I spoke to the chair and gave guidance in council to the chair of the board to engage in advance of that remuneration committee with Mark Bathill, the then chief executive of the Funding Council, about that severance guidance, and was very specific with him in drawing his attention to the existence of the guidance, which I was aware of historically that the guidance existed. He asked me to get him a copy of said guidance beforehand. When I went to the SFC website, I couldn't find anything other than what we now know to be the 2000 document that happened to be within the archive part of the site. So, in getting him to speak to Mark Bathill of the Funding Council, I counselled that he needed to check that we were operating off the most correct version. Subsequent to that, they did call me in partway through, I think it was about 20 minutes into remuneration committee, John Gray, the chair of the board, explained that the purpose for me being there was to be able to share with them the information that he'd asked me to get in advance, which I did. And I've made available to you a statement where I've, you know, which... I've read your statement, but you still haven't answered my point. You gave the advice, if you'd just let me finish, if you gave the advice to the chair, we've already had the chair sitting in the chair that you're in. We've also had the remuneration committee. The remuneration committee did not see that advice. So, when you were talking to the chair, did you raise the issue with the chair that the SFC guidance on voluntary severance was 12 months' voluntary pay for 14 years, as opposed to what the remuneration committee was discussing 21 months plus three plus six? Did you point out that what they were discussing in terms of the generous terms for Mr Doyle were a way above what the SFC guidance recommended? No, I didn't explain it in that context. What I did was I made the guidance available. There was definitely a conversation at that remuneration committee when I came into the room where the chair of the board discussed the conversation that he'd had with Mark Bath and talked about the guidance that was available. Subsequent to that, I did make that guidance available. So, did you give paper copies to each and every member of the remuneration committee and say that this is the SFC guidance? No, because they didn't have any information. I'm struggling to see. You had a chat with John Gray, the chair, who then phoned Mark Bathill. But what did the remuneration committee who made that decision what advice written or otherwise regarding the Scottish funding council guidance? How did you furnish them with that information? At Coatbridge College, we did not print off board papers and information in hard copy. We put all the information for board members on their board intranet. That is how I made that information available to them. So you didn't give them information. You left it to them to go and flurry around the internet. They were aware that it was there. They were guided to that information at the meeting. Did you tell them that the Scottish funding council guidance on voluntary severance was much less, considerably less, less than half of what they were discussing for John Doyle? No. Did you not, as HR director, point out that they were making an agreement that has ended up in us all being here, including yourself? As human resources director, did you not point out that the voluntary severance guidance from the Scottish funding council was considerably less than what they were being asked to agree to by John Gray? I didn't specifically point that out, but I do believe that I gave them the information. You gave them the advice to look at the internet when they had time. No, I would refute that, because at the end of the day, the discussion did take place at the committee. Did the chair share that information? You knew that thing. Sorry. The discussion is very important that we know. John Gray was aware of the Scottish funding council guidance. You were aware of the Scottish funding council guidance. Fourteen years, you got 12 months' pay. The remuneration committee who made the decision about the 30-months pay for John Doyle were not aware of the Scottish funding council guidance. I'm trying to find out where is this information. What I'm trying to clarify for you both as the then HR director and Clark to the board is that I believe the remuneration committee were made aware of it. How were they made aware of it? When John Doyle said the good go and look at the internet, is that making aware? The discussion took place at the committee. John Gray spoke about the advice that he got from Mark Barthaw of the funding council. The advice from Mark Barthaw was that you can pay what the Scottish funding council recommend and anything further than that, the college can pay for it itself. I can't recall the specifics, because it was two years ago, but it is in his email that he did subsequently send to the chair of the board. Right, but the remuneration committee who have all sat here in good faith, they did not receive that information. But likewise, we're sitting here in good faith and saying exactly the same thing. I'm giving you the facts as I know them to be. But you're saying what John Doyle said. The information was there if they wanted to go and look at the internet. You did not give them a piece of paper to say this is the basic guidance, but you can go over and the college has to pay the additional amount. I suspect that it wasn't as dismissive as that, I would put it to you. We were very, very specific, well me in terms of giving the advice to the chair that that information was available. I think that the chair did fulfil his role in having that discussion with the remuneration committee, and I don't accept what my remuneration committee colleagues have said in not having that information. The Auditor General obviously got it wrong. The Auditor General for Scotland has obviously got it wrong when she states that she did not provide the remuneration committee with complete or accurate information. It is not for me to conclude that. I'm quoting from the report, the chair and the principal did not provide the college's remuneration committee with advice provided by the SFC. You're saying that you did provide that, but what I'm hearing from you is you were providing an arrow and saying, if you want to go and look at the internet, you did not give them a copy or a verbal update on what the SFC guidance spelt out. They were given a copy, and I think that that is difficult. That is not what they said. They were given a copy of the SFC guidance, which said that for 14-year service you could get 12 months pay, so they all sat there and ignored that. When they came here, they basically told us, Ms Truths, that they hadn't seen it, and they disregarded that. Instead of 12 months, they gave Mr Doyle 30 months. That's what you're saying. I'm sure that they've got a different story to tell. That wasn't what they said last time. All I can do is give you the information and facts, as I know them to be. I'm sure that we'll hear from them. You are probably the only person, Ms Gunn, that had access to John Doyle's contract of employment. Was the 30-months pay, which was hugely generous at the time of Public Sector Freeze, was that in line with his contract of employment? Was he entitled to 30 months, more than twice what the Scottish Funding Council recommended? I believe that any payments that were made to him were in accordance with his contractual arrangements. His contract of employment—I need to know a bit more of that—is a legal point. We don't have access to that. Did his contract of employment stipulate that he was entitled to far more than was recommended by the Scottish Funding Council? Far more in terms of what? I've spelled it out about six times already. I'm sorry, but—14 years for 12 months and he got 30 months, plus you were willing to give him an extra 90,000 pension, et cetera. Sorry, forgive me. His arrangement was in accordance with the arrangement that he was offered by the remuneration committee. No. Was it in accordance with his contract of employment? There was nothing in his contract of employment about a severance arrangement, but what is in his contract was the clause about payment and lieu of notice, which you may be referring to. Sorry, I did say my final point. Just when you came to looking at the 2 per cent increase in pay for the ordinary members of staff at Coatbridge College, you said that the chair said that if the college acted in any other way than giving a 2 per cent increase, that we would look to being flagrant with funds before the merger heaven for friend. So, you know, you were quite happy to agree to a 2 per cent increase in salary for everyone else in the college, because anything above 2 per cent would have been flagrant with the funds is the word that's used. So, why was it 2 per cent for everyone else and huge amounts for the severance? I think you would have to ask the remuneration committee that question, Mary. That's not for me to answer that question. But you're here. It's all about Lorna Gunn. Lorraine Gunn, for giving. Reading the report here for the extraordinary board of management held in the 6th of August attending Lorna Gunn. Lorraine Gunn. Lorraine Gunn, sorry. This is advice that you're being given. Sorry, can you repeat the question for me? Yes, the question was why was it okay? You were worried about giving other members of staff 2 per cent in case you might be seen as being flagrant as the word with funds before the merger. So, why was there a different approach to all other members of staff at the college? I don't recall in my statement writing anything where I've indicated that I was worried about anything, but that's why I'm looking rather puzzled at this moment in time. So, if you can just clarify exactly what you mean by that question, and the chair did say that. Sorry, I just need a bit of clarity. Just to recall, if Ms Gallan can confirm the actual date and the actual minute situation. Yes, it was the minutes of the meeting, the extraordinary board of management meeting on the 6th of August. I just find the language quite concerning given the very over-generous payments that were agreed in January and throughout the year, and you were a bit worried about giving 2 per cent to all the other members of staff, and you were there at the meeting, and I would hope that, as the director of human resources, you would be advising the chair on his comments here. Forgive me, but I don't recall that specifically. I can't say any more. Thank you. Thank you. I will be at last to clarify on this area. At the meeting, the Renumeration Committee on the in January 2013, when you were present at that meeting, was the Scottish Funding Council specific guidance that you should only pay, the college should only pay one year salary enhancement? Was that specifically discussed by all those present? And who introduced that? The chair of the board introduced it. He said he'd had a conversation with Mark Bathwell of the Funding Council, and he explained in that meeting the advice that he got. To the best of your recollection, what did the other members of the Renumeration Committee say in response to that guidance? I think that there was more discussion, if I'm being entirely honest, at the meeting about the fact that the Funding Council's guidance seemed to be lost within—it wasn't available on their main website. It was tucked away in their archive site, and there wasn't actually current guidance available at all at the Funding Council when we first went. Mark Bathwell, as you've just said— Mark Bathwell subsequently did clarify that. I won't test that. Subsequently, we're talking about the meeting. Prior to the meeting, Mark Bathwell had spoken to your chairman and he had made it abundant—well, we're led to believe that he had made it abundantly clear that the SFC guidance should only be one year's salary enhancement. Is that correct? And that was made absolutely crystal clear to the Renumeration Committee? There was a discussion, yes, that the chair had, where he did explain the advice that Mark had given to him. And then who introduced all these red herrings about what was on a website and what wasn't a website? Was that the chairman as well, who talked about all that stuff? I can't recall. All right. Okay. Mr Banks, can I ask you—I was just trying to clarify some of the things—some of the evidence you laid before the convener earlier on. First of all, on the business plan, you're obviously aware that the guidance said there should be a business plan in relation to a sevens payment. A business case, yes. A business case, sorry, my apologies, a business case. And that never happened? As far as I'm aware, it did go to the Renumeration Committee on 28 January. No, no, there's no evidence that we have seen at all that was a business case. That was my understanding that it went to that meeting. Who told you that? That would have been the chair of the board at the time. So quite specifically, he told you there had been a business case for the sevens payments. Did you ever see it? No. So how would you have to have satisfied yourself that it existed? Not necessarily. There'd never been an issue with governance in the past within the college. So I would not expect to see that, particularly for a Renumeration Committee, where I have never seen any of the minutes from it. No, it didn't. But it wouldn't be part of your director of finance's functions to see that business case justification for a £300,000 payout? No. No. And in terms of the auditor that the convener was asking about, in your understanding of the internal audit process, that auditor should have seen that business case? Ordinarly, they would be involved in that discussion, but it's not to authorise the payment in any way, it's action to make sure that the processes were followed and guidance was followed. Absolutely. That's all it is. Absolutely. And it didn't happen. As you now know, it didn't happen. Well, obviously we discussed that on 28 October, with a two-part law partner and a senior manager of Weyland Visit to outline the process of bringing in Bigot Bailey, which they were satisfied would meet that requirement. So let's be clear. You were misled by whom. Someone told you there had been a business case and you were, as we know, didn't happen. I would have no doubt, given the experience I've had at Corpus Croyd, that, if I'd been told, I'd have expected that to be present. Yeah, but again, you were misled. Someone, you said earlier just a moment ago that you were told that the business case had been carried out. I can say it, I would have expected that to have happened. Right, okay. Earlier on, you said that, you just have to clarify what you meant by this. You said that there was no liability for severance payments to the convener. What did you mean by that? Yeah, the decisions that were made on 28 January by the Remarishing Committee effectively nullified when Corpus College withdrew from the merger on 25 February. So there'd been no liability, there was no merger, so therefore no liability at that point in time. Only after the merger management group meeting on 7 October, where the legality of the letters that had been issued was raised and therefore that became an issue at that point in time. Okay, so from the January meeting of the Remarishing Committee in 2013, all the way through to October, was there no discussion at your senior management level about all this going on? No, because we weren't in the merger until the 6 of August. That's when the board decided to go back into it. So there'd been no discussion about it because there was no intention of going back into the merger. But even informal discussion. No. Were you aware that that meeting on 28 January had taken place to discuss remaration of people? Yeah, I've been known that it was taking place, yes. And did anyone inform you as to what happened at that meeting? I'm sure they've got feedback from probably the principal John Doyle at the time to say what the outcome was and obviously we did receive a letter from the chair of the board offering us a package on 7 February. Yes. And did John Doyle presumably met you and other executive colleagues on a what-a-weekly basis? Yes, it was very inclusive at the time, yeah. All the way from January right through to when he left at the end of October? He was off for a period of sick as well and I can't remember the dates of that but there wasn't a certain number of weeks that he wasn't present. And at those regular staff meetings, management meetings, was the presumably the merger process discussed every week? No, no, because we weren't in, from February 25th we were not in a merger process. But you were back into it by the summer? By the 6th of August. Aha, yes. But okay, well from the 6th of August onwards it was discussed and presumably one of the things that management team would have discussed is their own positions given it's a private meeting involving a management team. Well, I think all the management team wanted to be part of New College Lancer. Yes. You know, so that was the aim. It wasn't to take a severance package that was our aim to be part of that new college. But after, if I recall from the earlier evidence, after August, Mr Boyle certainly knew he wasn't going to, where we knew he'd been applying for other jobs, for example. Presumably some of the rest of you had been as well. I'm not aware of anyone applying for jobs. Yeah, yeah. Okay, on the point about the evidence you gave earlier on saying that the lawyers replaced the auditors, that's extraordinary. Not necessarily, no, no. But they're not an auditor. No, but they're in charge of money. The lawyers certainly, I mean, I've never put my law in charge of my bank accounts. So auditors, they charge the money as well. They're certainly charged money, but they're not in charge of it. Yes. There's a difference. No, but the process was that the bigger bail had the expertise because of the particular issues arising from the issue of those letters. They had the particular expertise to address the HR and legal issues that might arise from those letters. That's entirely true, I'm sure, but that's not the point. Internal auditors are very different functioners. I hardly tell a director of finance. But the function of the internal auditors was really to go through the process to make sure that it was adhered to in terms of scheme of delegation, the control points that were there. What bigger bail easily had the skills to do that. But did you feel and do you now feel the internal audit was a retrospective exercise, as you pointed out about the external auditor in 2013? Obviously we did talk to him before Mr Doyle left and at that point that payment still could have been stopped because Mr Doyle was an employee up to 31 October. So having that meeting on 28 October could have stopped that payment as well. And during those regular discussions with the internal auditor, did the business case ever get discussed? I'm not aware of it, I mean the sense with him. So you can't recall if they asked whether one had been prepared. I'm not aware of it and again the internal audit should have actually carried out an audit needs assessment. So it was announced that we were going to merger which would have changed the focus of their work plan that had been previously agreed by the audit committee. Which obviously they did do, while in business they did do that for New College Lancer, for all three colleges in January 2014. So they agreed that work plan. Whilst there were still auditors with Coates College so I do struggle to see why they didn't do that for us as well. Give that advice. Okay and since the lawyers have now become de facto the auditors, did the lawyers conduct a business case to your knowledge? I'm not aware of that. No, and did they ask you about it? Did they ask you what was the guidance that should be followed for these procedures? No, no. No, so how could they be so good at auditing if they didn't appear to be aware of any of the guidance that related to how you audit an organisation on an ongoing basis? Obviously you will be getting bigger billion to have that. Well you were direct to finance, I think you obviously had discussions with him very closely. Yeah, but I didn't give him the remit in terms of who did that work for. Who did you give him the remit? That didn't mean Mr Doyle. That's Mr Gray. That's Mr Gray. Okay, did he discuss that remit with you or with other colleagues of the management team? Yeah, he described it in terms of what they were brought in to do and I think he's right to give an evidence to that effect. And what can you recall or do you... Is there a piece of paper of which was written, you know it's an oral arrangement? Yeah, it's just a spoken arrangement. So at a management team meeting Mr Doyle said, we're going to bring in these lawyers and this is why. Do you all agree? Is that kind of how it happened? Yeah, I know that I had that discussion with Mr Keenan as chair of the Audit Committee as well. He was part of that discussion? Not that discussion but I had a separate conversation with him. Okay, okay. And can you just enlighten the committee as to what Mr Doyle said in saying we should bring these lawyers in and here's why? Well I think he's on record and has been a witness a few weeks ago to say that they were brought in to make sure that the remission committee had all the the guidance that required all the information in terms of what would be required of them to make that decision. Yeah, okay. And just finally on the business cases do you think did you have to prepare or oversee business cases for other areas of expenditure? Yes. Yeah, so it was quite a normal part of director finance responsibilities. It would have been, yes. Yeah, okay. And the other one I just wanted to ask sorry, convener, was about the £400,000 that Mr Scanlon raised earlier on. The funding council paid X and there was a gap of £400,000. Where did it come from? That being from college funds. But college funds are loose in a more first term. What do you mean by college fund? Well, from the income that was generated through activities obviously we have funds available to us. Uh-huh. But income from activities is also college income that comes from the funding council because you were paid at that time sums for students. So that money could have gone to students and enhancing their performance of your college for students. No, I don't think that necessarily material impact on them because at the point of time when I left I was predicting a £34,000 surplus given within that extra £400,000. But you'd accept £400,000 could have been spent on lots of things including the infrastructure of your buildings or the... Well, the building had already gone through a restructuring which you spent £28 million on. Which I was in charge of. So it did not require any further work to that. No, but so everything was fine. So students were absolutely hunky dory. They didn't need any more money if it's spent on services for them or college courses for them or things like that. So it was fine to pay off vast amounts of money to senior executives. We obviously met our sums target and all the KPI's that were necessary for the funding council. So I don't see there being any particular detriment to the students. Right. Okay, thank you. Mr Banks, just to touch one small point on the business case. Where a business case has a financial implication would you normally expect the director of finance to be involved in the production of that business case? Not necessarily. Where it was, particularly for individuals concerned, I would not necessarily see that. And particularly around the Moorish committee as well. So they would not have to take into account the affordability? Yes, I would have been told the overall value of any business case but not specifics of it. So you were involved in the business case? In terms of being told the value of it then, yes. So you agreed the financial implications at that time? I was aware of them. Yes. You agreed them? No, no. It wasn't for me to agree or disagree with the Moorish committee that made those arrangements. But you must have signed off on the financial implication. I was aware of the funds that were required. It's not the same thing. It wasn't my responsibility to sign it all for me at that decision in terms of what would be the case? I wouldn't say sign off the business case but to at least accede to the fact that it was affordable. Yes, it would have been. So you signed off saying that it was affordable at that time? I would have told them that it would be affordable at that time. Who was it that said that Bigot Bailey was going to be the substitute for the auditor? Well, that had been in terms of the remit that was given to them through Mr Doyle. Through Mr Doyle. But so Mr Doyle decided to... Wouldn't this be going round your back appointing a substitute auditor? You know, obviously I had a discussion with Mr Keane in the chair of the audit committee and once we had known the remit we agreed that that would be the best approach to take. Was that a minute meeting? No, it wouldn't be. A cell phone call? Yes. Bigot Bailey said that they didn't take any instructions from Mr Doyle. Is that correct? I have no idea. I can't comment on that. But you just told me that Mr Doyle instructed Bigot Bailey. Yes. But I don't know... Mr Doyle instructed Bigot Bailey. Did he then agree the remit with Bigot Bailey? He must have, because it wasn't me. He must have. But I say again, Bigot Bailey said that he took no instructions from Mr Doyle. I cannot comment on that. I wasn't there. I don't know the conversations that were had. So as director of finance you didn't know the remit that an external party was being given in order to come in and substitute as auditors for the college. I don't know. Mr Doyle had outlined the remit. Mr Doyle did? Your question was, did that remit get communicated to Bigot Bailey? I don't know that. I'm not aware of it. It wasn't quite what my question was. Bigot Bailey is saying that he took no instructions from Mr Doyle, which implies that your understanding is incorrect. But who did he take instructions from then? I don't know, I'm asking you. I don't know. It wasn't me that gave that instruction to Bigot Bailey. So to be clear, you believe that Mr Doyle gave the instructions to Bigot Bailey and defined the remit and that you were not involved in any other way. Can I ask, just to confirm the accounting cycle for the college, my understanding is that in 2013 the accounting cycle finished in 31st of July for that year. And then the following year it finished on the 31st of March. That's correct. Now, coming back to this famous meeting of the 28th of January, at that meeting, SFC guidance, SFC year 2000 guidance and servants payments, were you aware of that in your capacity as director of finance? Yes. You were. Were you aware of Mark Bathur's email to John Gray in the 24th of January stating that the college should notify its internal and external auditors of planned servants payments? Of course, that's backed up by the SFC document. Yes, I was aware of that. Did you take any action on that? Again, I refer back to the guidance itself, and particularly paragraph 36, where we talk about external audit being post-event. So I don't think that's an issue. In terms of the internal audit, is really the process was replaced by Bigot Bailey? I mean, Bigot Bailey didn't come in until much later. What I'm saying is that when you had this guidance in place, you had it in your hands, you knew about the email to John Gray of 24th of January, both of which say that college should notify its internal and external auditors, who would have been responsible for doing that? But bear in mind, as soon as we came out of the merger on 25th of February, there was no issue with that. There was no agreement, no liability for any severance arrangements. So you're saying that everything just fell away? Well, there was no requirement for bringing the internal out because there was no agreement, because we were just coming out of the merger. Now, in Lorraine Gunn's submission, under due diligence, there's reference here to the letters, the severance letters that were issued to senior staff, and that the letters, I quote, were certainly issued, were certainly provided on at least two occasions. They were sent to the auditors who'd denied receipt as part of the initial due diligence quest, and were then re-sent when Coatbridge re-joined. Now, twice the severance letters were sent to the auditors, apparently, both before and after Coatbridge pulled out and then went back in. But the auditors say that they were unaware of this, and they've got this in writing, unaware of this until April 2014. How does that work? Who sent these letters? I think, for clarity, the auditors on the due diligence were different from internal and external letters for the college. The letters would have been issued to the due diligence team to carry out that assessment. Who would have issued these letters? There was a website where we were required to upload documents to it, so between myself and Mrs Gunn, we actually uploaded those documents. The severance letters were uploaded onto the intranet, which we've already explored a little bit. No, it wasn't our intranet. It was the auditors' website, a secure website. Can we clarify that it's the internal and external auditors? No, it's not. There were different teams for internal, external and due diligence. Different ones for due diligence? Yes. Who are the auditors for due diligence? It was Scotland grief. Anderson Strathairn for the legal side of things. This is something new that we're getting here. What was their function in terms of due diligence? The due diligence team was appointed to make sure that Colbridge was no impediment to Merger. Appointed by whom and when? They would have been appointed by New College Lancer shortly after the announcement of Merger on 6 August. Approximately what date would that be? It would probably be mid-August by the time that they were appointed, and we started counting out the work, and that work would have been completed round about the end of September. What was their remit specifically? There is, obviously, they have to check that Colbridge is in a fit state and should become part of the Merger process. Looking at Lorraine Gunn's submission here, it says that the letters were sent on two occasions as part of due diligence. Now, maybe I can get a clarification there. The first letters were sent, presumably in January or thereabouts, I'm assuming. After the letters were first issued, which I believe is the 29th of January? Not for due diligence, it wouldn't be. I don't know what two occasions that Mrs Gunn's talking about, but they were only issued once to the due diligence team between mid-August and September. That's not what Lorraine Gunn's saying here. I genuinely thought it was twice that we had done that, so that we'd submitted paperwork twice. For due diligence? For due diligence. The due diligence didn't start until August. So you're saying that these letters were sent as part of the due diligence after Colbridge went back into the Merger? It would have been, yes. And they were sent by Scotland Creef? No, they were received by Scotland Creef, to a sense. Received by Scotland Creef? Who issued them? Mrs Gunn and myself would have uploaded them on to the website. So this is a re-issue of those letters. Were they the same letters as were issued previously? Is there any changes? No changes. No changes? Not that, I recall. So those letters, which are being issued to senior members of staff, a copy goes to Scotland Creef, or they go to Scotland Creef, who issue them? No, a copy would have been uploaded to the website, which Scotland Creef had access to, to carry out their due diligence work. Now, as part of that process, they would have contacted both internal and external audit about the due diligence work to assure themselves that Colbridge College was a fit partner in that merger. But the auditors are saying that they were not contacted and they had no information on this. We have it in writing. They have no information on this until April 2014, which is substantially after payments were made and everything was tied up. No, as part of the due diligence work, the Scotland Creef would have to have contacted internal and external audit to ensure themselves that they were satisfied that Colbridge College was a fit partner in that merger. And did they sign off in that regard? I can't comment on that. Why not? I have no knowledge if they did or not. But you were there until 31 March 2014. When did the due diligence process finish? It would have been probably at the end of September, where Scotland Creef would have issued a report to both Colbridge College and New College Lancer boards. And did you see a copy? Yes, I did. Yes. And did they sign off? Yes. They were signed off? They were signed off. No, there was no qualification on it. They were deemed fit to be a partner of that merger. Can I come back to another point that was raised under due diligence by Lorraine Garn? The auditors in a merger management group meeting on 7 October 2013 presented the due diligence reports and highlighted the voluntary 7 scheme for Colbridge College senior staff. Now, I presume by auditors, you mean that internal and external auditors were present at that meeting? The auditors... I thought it would have been the auditors from Creef as the due diligence auditors who presented that report. I don't want to put words into my skin. No, no, no. So are we saying that it would not be the external or internal auditors that were present at that meeting? And in the references that I've got in that document, I believe that I'm referring to Scott Moncrief. As auditors? Yes. As opposed to... Yeah, I perhaps just have confused the terminology. So forgive me if I misled you. I mean, the clarification I'm trying to get here is, in spite of all the recommendations to involve internal, external audit, it doesn't seem to have happened. Who would be responsible for doing that? I think I've already stated that bigger baili we're brought in to replace internal audit, external audit, can be post-event, and that's recognised within the guidance that the Funding Council issued. Well, bigger baili are post-event. I mean, they were brought in, they didn't report until November. Yes, but they were brought in before Mr Doyle left. I mean, they're not meant to be made. Not far before, I have to say. Okay, thank you. All right, good morning. I just got a couple of areas that I'd like to see a bit of clarification on. First one is just that this has come up in previous evidence sessions, when in terms of the issue of the funding and also the bank accounts, now as director of finance, how many accounts would you have worked with? Will it have been one for the main area of business, or would there have been a second one for the money that would have come in through commercial activities? No, there was two accounts, but one would be for student funds and one would be for normal-run businesses as usual of the college. Right. So, in terms of any commercial activity that the college undertook, the result, that particular income will run into the main account. Yes. And so there was no differentiation in terms of how monies were paid out. No. Okay, thank you. In terms of this meeting of the 28th of January, and then the meeting that took place, or the decision that took place in February, this has come up in newer evidence this morning, on colleagues have very questioned it. Now you have stated in the record today that because of the decision in February, not to continue with the merger, then that would have nullified any liabilities. So would that have nullified any agreement or any decision taken regarding the 7th's payments at the meeting on the 28th of January? That's my opinion, yes. Particularly because the letters issued to the senior team also had a termination date of the 31st of July on them as well. So I've got my natural opinion, but if that actually were to have been the case, then at what point in this whole process, because various meetings have taken place and also just found out some other information there as well, but at what point then would the final decision have been taken to agree the 7th's payments for the individuals that we are here talking about today if they had been nullified on February? The final decision was, as far as I understand, carried out on the 23rd of October by the Remuneration Committee meeting. On the Scotman grief, which is further information that's just been new to us today, how—well, they were introduced into this because of the decision to then go into the merger process? Yes, obviously we have to make sure that each partner within that merger is in a fit state to be able to merge and there's no impediment to that merger. Right, so in terms of meetings that will have taken place post—well, from the decision to go into the merger, were Scotman grief for they in attendance at all the subsequent meetings from that point onwards? No, they would not have attended any of the college meetings. There was a specific meeting set up to discuss the due diligence report and that was through the merger management group. What can you call us, Lancer? Right, okay, okay, thank you. Thank you very much, and good morning. Just go over slightly, Mr Banks, some of the answers you had given earlier on picking up from Stuart McMillan in regards to—and obviously to have you, Scot as well. For what I can make out of it and clarify is you went into a merger with all the other colleges, Cochbridge College pulled out, and that was about the 31st of July that we're looking to come back, either back in or have, severance pay for ourselves as a college on its own. At that point, there wasn't any discussion about severance payments. The board decided in the 6th of August to go into the merger with new college, Lancer. Right, so what you'd said earlier on was that, whilst we're in the process of all the colleges going in together, it was acceptable for the severance pay to go forward, but then Cochbridge College pulled out, and then re-entered to a new negotiation, as you may say. Now, I think we all know that colleges have holidays, as you might say. So we're talking about 31st of July, then you're talking about August. When will the college per se start back again? This all seemed to happen in this void when the colleges were not in session. I think traditionally that colleges start back at the tail end of August, in terms of welcoming students back and getting them on board. So a lot of discussion seems to have taken place, or movement was taking place, between when the college wasn't actually sitting? No, the college was still sitting. I mean, obviously... Their selves? Yes, most of the team we've been in over the holidays, most of the team wouldn't have had academic holidays, and therefore we had been available to meet as well, and obviously there were extraordinary meetings of the board, and they met on the 6th of August. No, it's very... I would assume that you would have had holidays in some sort, I think, lectures and people like that deserve a holiday.  No, the senior team did not renegotiate anything in terms of their severance arrangements. So that still stood, although you said it nullified? Yes, so there was no agreement as far as I'm concerned, post 31 July, and actually post 25 February, with the senior team, because there was no going to be no merger and it was time limited up to 31 July. That's a point I wanted to clarify, basically, there was no agreement, and then you were entered into another arrangement in that respect. Could I also ask you something you mentioned earlier on in regard to Mr Keenan, and just so you could clarify for me there, you mentioned that Mr Keenan's position as chair didn't come into force until the first of November. That's correct. So would Mr Keenan as being acting chair of the board at the time when these payments were being made, he would not be responsible then if he, you mentioned, he didn't come into force until the first of November? Yes, officially he would not take over responsibilities from Mr Gray until the first of November, but he was the chair of the audit committee at that point. Yeah, but I'm asking you about the rumouration committee and not the audit committee at that point. He would not be the chair of the rumouration committee at that point. So it would be Mr Gray who was responsible, not Mr Keenan. Mr Gray would be the chair of the rumouration committee at that point. Yes, that's good. Thank you very much for clarifying that point for me. Ms Glanif could you just come back to yourself. You mentioned the fact that you were asking the chair about an extra order meeting. To convene an extra order meeting. Sorry, I can read it. You give me a fine scale. I can give you a fine scale. Sorry about that. Basically, I don't want to read the whole thing. There was a certain respect in relation amongst my senior colleagues and elsewhere within the college at the time that it would only be a matter of time before Coop Bridge in South Lanarkshire would be joining and the chair did ask me to convene an extra order meeting of the full board to discuss the potential merger on the 16th of January 2013. Basically, your role was to tell exactly what advice you could give in regards to that meeting. One part of the advice you were to give was the role of the principal and what severance arrangements they would wish to make available in the event that John Doyle did not secure alternative employment as part of the future merger arrangements. At that time, you were aware that Mr Doyle had applied for another post of post and was not successful in those? Yes, I was aware of that. You were aware of that. That's fine. And just another one I wanted to raise. Obviously, you mentioned the fact that Mr Doyle was very upset. I mean, I can read it out. You had a conversation with John Doyle prior to his departure, or your departure, sorry, to put arrangements in place that I believe would protect the governance arrangements going forward. And that was to get legal representation. Was that bigot and bairy as well at that particular point in that respect? Obviously, you seem to be pretty upset. I don't mean that to put that in words about Mr Doyle, possibly the way he was treated. I don't believe him. Would that be a correct assumption of the evidence that you have given here? No, I was particularly upset in terms of how some of my board colleagues dealt with myself. Oh, right. OK. Could you maybe expand on that? And I suppose it's fair to say, on a professional level, I was keen to ensure that there was as much clarity as possible. It's probably the best way I've got of describing it for members of the team, because I think it was a difficult time. I think whenever any organisations are involved in merger, I think there's scope there for both senior staff and the team to be concerned. And I just wanted to make sure that enough information as possible is provided in that environment. But at the time, I think it's fair to say that I think Mr Doyle was upset in as much as there was lots of conversation going on in the background with organisations such as the funding council, et cetera. And I was aware that discussions were taking place about the possible early departure. Of him as an individual. And I think in an organisation where people are feeling vulnerable already, I think that that sort of promoted that vulnerability, if you like, within that environment. The idea that you're losing your chief exec in the midst of it all and you're changing over arrangements and so on. I'm sorry. Thank you, Ms Gyn. You're not aware that Mr Doyle had indicated that he had said that he knew he wouldn't get the job there and he had indicated before, once and once before this, that he was going to depart. That's why he replied for another job. The way I viewed it is, individuals in those circumstances did feel vulnerable where there wasn't clarity. I think if there were opportunities coming up, I think all of us as individuals had to think, well, should we protect our futures and move forward into other opportunities as it were? And I don't think Mr Doyle was any different in that. But I think in terms of how he felt about it more specifically and anything related to that, I think you'd have to speak directly to him about that. I wouldn't wish to put... No, I'll just put words to it. I'll leave it at that, chair. Thank you very much. It's okay. Yes, I want to be very clear about just one or two things so if I do, you could just confirm so that I've got it right in my mind. In the 16th of January, the chair asked you to call a meeting of the remuneration committee. Your role was then to prepare the agenda and the papers. I know there weren't hard copy papers, but... I understood it and we were moving towards that. We're talking about... Sorry, can you just clarify? 16th of January, the chair asked you to call a meeting of the remuneration... Are you talking about the remuneration committee on the 28th? The remuneration committee. Right. In terms of the remuneration committee, he said that what he wanted to do was to talk to the committee about the principle, the post of the principle and the rest of the senior team. He asked me in advance of that to get him some information. He did anticipate that he would want to talk about potentially severance arrangements and thus I highlighted the need for him to speak to the funding council, read the guidance, make sure the committee members were aware of all of that. But as I understood it, it was a single item agenda to discuss the way forward. So it was a single item agenda but you didn't have to issue that agenda. I mean, I understand your role as providing a secretariat support to the remuneration committee. So did that mean that you normally issued an agenda for these meetings even when they were taking place? I was comfortable about doing the agenda for them. But what I wasn't comfortable about doing would have been attending the meeting necessarily unless it was just in an information giving capacity. At the end of the day, it would have been a conflict of interest for me to have been participating in discussion for instance. Right. In terms of the decision making process. So at normal remuneration committees, you prepared the minutes or who prepared, who was responsible for preparing the minutes? What would normally happen is that the chair would summarise at the end of a meeting and would give me after the event that summary which I would put into a minute format but the chair would circulate it for approval ultimately. But I wouldn't actually table that until another meeting comes up. So it was the chair's responsibility to do the minutes of this committee, not you. You just simply copied out what you were going to do. Can you clarify what you mean by do the minutes because I acted as a secretariat for it to put them together? But you were acting as a secretariat to that committee although it's not a committee that you were attending. That's right. Although I did attend on that occasion because I was asked to give advice. That's very interesting. Very interesting. Well if I haven't clarified then I'm happy to clarify any answer. But the other bit of this is that you said that normally the papers for that committee were put up on the intranet. They weren't hard copy papers. That was the standard procedure at all remuneration committee meetings. At all board meetings. All board meetings as well. So you were paperless. Great stuff. But that means that the remuneration committee had an obligation to always then look on the intranet to see what all the papers were. Yes. Right. So that clarifies the fact that the remuneration committee then should have had available the guidance that you put on the reference to having dug it out of the archives. Yes. And if I haven't made that clear I hope it is not clear for you. Well I think I've got that really now very clear. Good. Can I move on to Mr Banks? Mr Banks, am I reading this correctly that the financial statement at the end of 2013-14 showed a deficit at the end of year the 1.2 million? I haven't seen the accounts. You haven't seen the accounts. I didn't pay them or see them. I'm reading here from my papers the college financial statement for 2013-14 showed that the college had a year-end deficit of £1.002 million but you were predicting a £34,000 surplus. Yes, I was. So what? You were still in employment at the 31st of March. I went to the 21st, yes. So between you making a prediction that the college could afford these generous payments and the accounts being completed things had swung from a £34,000 surplus predicted by you to a £1.002 million deficit. How do you account for that? I can't, I wasn't there. But you were till the 31st of March and you presumably were preparing financial statements on a regular basis and you would be tracking all your budget items and saying what was above budget and below budget on a quarterly basis or a weekly? Monthly. Monthly basis. So every month you'd be predicting that. So as you went through to the end of March your accounts were still showing a £34,000 surplus but the actual accounts when they were finally produced showed a million pound deficit. Can you explain that? No, I can't. As a financial officer should you be able to explain that? No, there's always post events that happen through a nodic process and some of those can vary in terms of what they are but I wasn't there in terms of process. I did offer to stay to complete the accounts but that was rejected. I see, so right. I requested it through Tom Keenan who I think talked to New College Lancer and that was rejected and that's why I was then on a retainer to try and help out. Yeah, okay. I think that that's quite helpful. That's quite helpful. I think that's... Okay, Nigel Don. Oh sorry, there is one more. Just to be very clear we've got an internal auditor who was effectively sidelined and replaced by Billy Gifford. We've got an external auditor who'd not normally been involved until post the audit accounts and I understand that. And we had now got, we've discovered a Scotland Creef doing due diligence. Thanks. Would it be your understanding that as part of that due diligence they would be checking your view that there was a £34,000 surplus looking as if it was coming along and would they actually be looking at the severance payments and were they included in your £34,000 surplus? Yes to both. Obviously at that point in time that would have been September of that year so only into the financial year by a couple of months and so obviously the forecast would have been difficult. And I can't remember if they did a further check closer to the investing day in March or not. But they would have checked that our predictions and our previous performances were consistent with what we were saying at that time and obviously the letters were issued sorry to Scotland Creef which included all the severance arrangements. And can I just say one final question while I remember it's really Mrs Gunn. In terms of a severance payment would that normally be issued by yourself or Mr Banks or jointly? Because we're told that the meeting on the 28th of January made decisions about the principal severance arrangements. A letter was issued on the 29th and responded to on the 29th going from John Gray's chair to John Doyle and coming back saying we're accepting it. So the whole deal was sewn up within 24 hours of that remuneration committee even before the minutes were approved which we now know would have gone through yourself. So have you any comments on that procedure? Is that the procedure you would have expected to be followed? Is the question number entertainment or actually who can authorise the payment? Well it's a question of both of the timing and the fact that the severance payment was issued not by you as said of HR or by you as the finance officer in terms of this is what that remuneration committee have now decided and approved the minutes of I'm just trying to get to the governance of this it seems an extraordinary situation that it will be rushed through and done by the chairman to the principal and back again within 24 hours of a committee meeting the minutes of which have not been approved and the governance of which as you as finance officer and you as the head of HR had not actually been involved in. Your sign up. So you're just you're saying that is that the governance arrangements you would have expected and it's what happened but is that does that you know do you have a comment on that? It certainly was a quick turn around but I can't point into that. Quick is about. Ms Gunner would you normally issue these severance letters? I would normally do if in the context I mean let me take pay for example because remuneration committee would do the letters to the senior staff about any offers that the board were making to them about pay in that kind of context yes I would do the secretariat on behalf of the chair for those arrangements but it would be the chair who would sign off the documentation I'm merely providing the secretariat for that. And you did not on this occasion provide the secretariat for the letter you didn't actually have the letter prepared for Mr Gray's side. I assisted in the secretariat in terms of making sure it was all put together but it was on instruction in terms of what the content of it was going to be. And the final thing is that we hear that the minutes didn't really come out until October. Is that that that was a standard practice and as I understood it so the minutes were not circulated for even technical approval on such an important event involving 304,000 pounds of college money the minutes were not actually sent back to say this is what we've agreed are we all signed up to it. As I say it would have been that it was the custom in practice to do it in that way and at the I recall at the end of the meeting the chair did do a summary with everyone around that table where he said right we are confirming the following for this committee meeting. And just finally Mr Maxx you said repeatedly that your understanding was that after the college withdrew from the merger process on the 25th of February at that point all bets were off all the letters issued were actually null and void what basis have you got for saying that because the information we have from Bailey Giffords advice is that actually that was a legally binding document offered to the principal that was extant on the in October and it could not be reversed so the remuneration committee were faced with a ffeta company which they subscribed to but nevertheless that was all done and dusted and couldn't be altered so your view and that of the of the next group that we're having in front of us are in complete and utter contradiction how do you you know I mean that several reasons were made on the basis that we were going to go into merger yeah and once the merger was off clearly we were not going into merger until later on we didn't know that was going to happen but as far as I'm concerned that there would be no liability then so Ms Gunn as HR you're the expert and we're not as HR would you regard that as being appropriate that once the college pulled out any documentation related to matters prior to that in terms of severance were then null and void was that would that be your opinion in terms of how the letter was structured what I was unclear about was whether or not because there was a date in there as I recall in terms of the the severance arrangements letters that where it was linked to the 31st of July the 31st of July yes so for me I thought that the letter was a legitimate letter but I wasn't sure as to whether or not that would constitute and you know in a court of law you'd have to ask a lawyer that question as to whether or not it would stand or not that's thank you very much can I just continue on on those two themes and first of all can I just carry on that conversation with Lorraine Gunn please would John Doyle's letter severance letter of the 28th sorry 29th of January would that apart from the fact that the numbers would have been different would there have been any different from the other ones that were given to the other senior staff my recollection is I don't recall it being different but I'm sure that they'll make that information available to you well I have to say I think it would be enormously useful if somebody could make that information available to us because it would be very nice to know what's there well Mr Dawl's file I would imagine will be with new college Lanarkshire at this moment in time so the file is available and all the information will be on that file right but right in front of me at this moment in time without looking at the detail I wouldn't be able to comment on that could I then ask you whether you would have seen that agreement you may not be able to remember every detail of it but was that a letter that would have come across your desk before it got to Mr Dawl are you talking about the letter or are you talking about the legal compromise agreement can you just clarify for me what you mean by agreement I'm assuming they're the same thing because you can sorry I effectively I'm looking at the agreement the compromise agreement or whatever it was that he would have been able to sign which would have turned into the contract which couldn't subsequently be changed well I believe that they are in the main standard of documents the only thing that would differ I would imagine in Mr Dawl's agreement would have been the termination date yes and the numbers would be different right but then I come back to my question did you did you see that document I would have seen it at one point in time I would have thought to make it part of the record but you wouldn't have seen it before the chairman put it in front of Mr Dawl and he signed it so it wouldn't have needed your agreement no yes I did see it before I'm sure I did see it before in terms of timing okay because I would have facilitated in terms of getting that agreement from the lawyers for him to sign it right and all of that it would have been my role to contact bigger and barely to a certain I would have assisted the chair to do that on instruction to get them to complete a draft agreement and that all happened in 24 hours that all happened on the 29th or 28th and 29th of January because we've been told that it was signed and dusted on the 29th is that normal practice I would generally try and do you know turn things around as quickly as I can okay I don't want to be unkind but so this was so important that we would get agreement from the lawyers and everything done in 24 hours and just slightly surprised it was suddenly deemed to be that important very few things on left seem to move quite that fast okay if that's what you mean for me I was satisfied that we met all the requirements in terms of due diligence in terms of signatures and what needed to be done and you know and what the content of said documents was going to be so the fact that it was 24 hours well that would that is just a matter of the record now yeah that's fine can I take you back to the meeting then on the 28th because your view of the information that was given to the committee and their statements last week do seem to be different yeah I think you said that the chairman had passed on the contents of his conversation with the head of the funding council can you give me any clues as to who it was on the committee or how it was the committee decided to do something else who introduced the alternative numbers which were agreed to that would have that was a discussion that was led by the chair himself by the chair of the board he was the one who introduced the the discussion around the well he was chairing the meeting so he introduced the discussion around a potential severance arrangement for the principle so he would have introduced both the current funding council relatively low numbers which he had just discovered and also the relatively high numbers which were actually agreed so he would have led the whole of that discussion yes thank you what I can't speak for can I just clarify for you though I wasn't there for about the first 15-20 minutes of the meeting so I don't know if there was any prior discussion and that you would have to speak to other committee members about that part of the meeting I didn't join till I think about 15-20 minutes in but presumably the well okay in which case how much of the discussion about that the lower or the higher number occurred whilst you were there some of it I accept the 20 minutes you were there you won't know what happened but you're suggesting that the the part both both possible sums were discussed by the chair yes did that happen in the time you were there and whilst I was there there was a just the main discussion was around the practice that was prevailing if you like within the sector what other colleges were doing and it was my opportunity if you like to go in and give them all of that information it I didn't participate in the decision aspect of it my role as I saw it going into that meeting was to provide them with that external information yes I recognize your conflict of interest I'm not wanting to disagree with that could I then just come back to Mr Banks would you have seen Mr Doyle's severance agreement no at any point no I didn't see it it wouldn't be inappropriate for me to see that that's a personal arrangement I think that's actually a very brief question it's just one minute at the very most of the members on Mary Scanlon okay can I ask if you were the two senior managers who were still in work at the end of March 2014 who proposed that the two senior managers receive a pay-up lift of 4,000 pounds and whether business cases were produced regarding the pay-up lift and inclusion of the pay-up lift in severance payments and considered by the Immunisation Committee yourself and Mrs Linton at the time yourself and Mrs Linton well Linton thanks again right so you take full responsibility for that and that were these considered by the Immunisation Committee yeah they were agreed through Mr Keener and can you ask can you tell me what happened to the 90,000 pounds pension that was offered to Mr Doyle that was withdrawn that yes why was it withdrawn I think the Remunition Committee met and agreed and that should be withdrawn okay did you sign confidentiality clauses as part of your severance agreement and if so why and can I ask Mrs Ghan do you have any grievance or did you have any grievance actions against coat bridge college following your departure yes there was a confidentiality agreement for the confidentiality agreement was standard with any arrangement that was being made within the college so it wasn't unique if you like to the senior staff circumstances what did it prohibit you from talking about it just prohibits me talking more generally about the details after tailing to that severance arrangement do you want to sorry do you want me to answer the question about whether or not I have a grievance at this moment in time at the point at which I left I had unresolved issues with my board about how they were handling as certain board members in terms of their handling of some of the governance arrangements and to date I still hadn't I would say I still haven't fully resolved that with them so there's still an illegal action on going no no okay no thank you Mr Banks the letters that were issued to Scotland Creef the due diligence lawyer were issued on what date to Scotland Creef yes between mid-august and September in the September I couldn't give you a date thank you and those letters included the totality of the severance payments that you expected as director of finance to have to pay I think it was actually just the letters that were issued so that would have said you know 21 months or 30 months however in terms of those and I think it was actually the auditors who calculated the value of that so the auditors being who to Scotland Creef right and that was after that was after the point you made earlier which I thought was exactly right that you thought the severance payments agreed at the meeting in January were null and void because the merger hadn't taken place yes so I'm struggling to understand why then letters were issued to Scotland Creef saying he is the potential liability for severance payments where you very fairly said earlier on there wasn't going to be any no and I didn't think there would be but we gave them all historic documents as well anything within that year because there was a time limit on how much evidence we had to give them so within that year I think it was we had to give them all the evidence so I'm not really following what evidence that would have been but in terms of any documentation relating to that year that could have had an impact on it so that's why so they saw the they saw the the agreements agreed at the Renewmation Committee on the in January 2013 yes but we were told the minutes didn't come out till much later in the year so what documents would those have been well the actual letters themselves that went to the Mr Doyle and two other and other people okay right that's very helpful thank you thank you to you just a very short question yes talk about letters and letters of comfort in particular because you mentioned that yourself Mrs Gan you drafted this letter for this principle and senior staff the signatures in the 28th of January and the stress and your evidence and you do they say the word stress but I would stress that they were considered by the senior team to be letters of comfort and they did not consider the letter as an offer as such I just could basically so this is a letter which was sent to the senior managers and obviously to the principle by Mr Gray on the 29th which he signed and on that basis he's looking to the severance pay but in your evidence you say did not consider the letter as an offer as such yeah I mean as that's fine yes that's fine yeah thank you chair no so back to the February meeting and your opinion Mr Banks that that will have nullified the decisions in January and you said it was your opinion did you make your opinion known to others within the college I'm sure it would have but I can't be specific about when that was or who to but any indication I mean that was it verbally or was it in writing was it emails it would more likely to be verbal verbal right okay so there would have been no record of that what swiller I don't have access to any information from a time at the college that was part of the compromise agreement as well right okay thank you I just asked finally is it listed on another member's note just two final questions you referred to confidentiality causes the Miscan and you'd advised that this was common practice across the I understood it to be a standard confidentiality clause are you aware of the document that the SFC submitted guidance on severance arrangements to senior staff and Scottish Further Education Colleges in 2000 so take it you're familiar with this document so you must be familiar with paragraph 32 which actually starts and says colleges must not agree to confidentiality causes within severance agreements except when necessary to protect commercially sensitive information so take it you and Mr Banks are subject to confidentiality causes is that correct so as the HR advisor why did you and he said you're aware of this document but you didn't ensure that the terms were followed through again somebody of significant experience as yourself had the responsibility I take it for preparing these documents and you couldn't ensure that this was carried through why not I have no specific explanation for that other than you know in terms of my due diligence on it I believed that I had fulfilled the requirement of putting it through our lawyers and making sure that everything in there met those requirements so you should have been a significant responsibility that you have within the college you need to be aware of this document I mean it's not a bowling club you're running around you know it's a actually no bowling clubs who have actually get more measures than placed to ensure proper I do appreciate that Mr Martin I did take my responsibilities very seriously oh you didn't because you didn't ensure that the guidance has been set out clearly in this document by which you should be aware of wasn't carried through so I mean I think we just need to accept the Welsh who took it seriously didn't carry it through can also refer you just finally to paragraph 27 of a document where it says that there are very few occasions where payment of salary and law of notice represents value for money now the information that we have has been a significant number of arrangements where there's been payment of the law of notice so again clear guidance from the funding council it sets out it doesn't represent value for money did you ever listen to anything the Scottish funding council said to you I mean do these people just you know did you say well oh very well but we'll ensure that we put in place a number of arrangements again all I can say is I did take my job very very seriously and my responsibilities very seriously well I'm glad you know you didn't take them seriously because then there would have been even more of a concern to the committee today I mean surely these are basic errors that have been in your part I don't accept that I didn't take my job seriously well I'm advising you that I don't think you have because here we have here a document that you that that should be the bible of the Scottish funding council this must be the absolute basis by which you go about your business and clearly it doesn't happen because just ask finally Mr Banks you referred to this document again and you referred to paragraph 36 for external audit sorry for external audit yeah so you so what is the element of paragraph 36 that you referred to because it doesn't say here it should be referred to an audit committee no no in terms of that reference was to demonstrate that normally the practice is for external audit it's post event so does it say that here must must review for seniors that such a review will normally take place after settlement has been agreed if the final settlements don't conform to the guidance in this document so that they should report the fact to the college in their management letter yes so that actually happened yes it did yeah so is there any other parts of this document that you've ensured to happens is there anything when you've ensured that all parts of this document have been taken forward as far as I think that I have in terms of taking forward both internal and external audit although internal audit obviously was using Bigot Bailey in that process okay can I thank you both for your evidence and can I move the committee into the private session for Friday nights generally speaking we are welcome our second panel witnesses today who are Paul Brown the former partner of DWF LLP Bigot Bailey and Arthur Peacock the partner at DWF LLP I can welcome you both committee you understand it we are tight for time this morning but hopefully some of the issues can come out during the questions and respect of what would replace an opening statement so can I first have asked first of all ask you Mr Brown just to confirm on what basis that you were appointed as legal adviser to the former Koch Bridge College and who appointed you if I may just start for the benefit of the committee and just to explain the various names that are bandied around I became a partner in Bigot Bailey back in 2000 in 2012 Bigot Bailey merged with DWF for a while it traded as DWF Bigot Bailey the firm is Bigot Bailey I left Bigot Bailey to join another firm in April of this year and obviously Mr Peacock is still a representative of that firm the basis in which I became involved in this was in October 2013 I received the call on around the 11th I think of October it was from John Gray basically saying that they received a letter from the funding council and then the board needed advice on it and that I would be getting a call from John Gray who was the chair of the board and could I speak to him and help and assist and advise them on it okay and that advice was that I mean the information we have from Mr Doyle is that you provided both legal and HR advice at the same time is that correct? essentially what I and my background just so clear is I'm a specialist employment lawyer a specialist employment lawyer for 18 years my involvement with the college historically had been ad hoc HR advice and equality and discrimination issues that's the advice we weren't DWF weren't or bigger belly weren't as such lawyers beyond that we meant that was the only remit we had for the college okay and during so effectively you received the call from John Gray on the 10th of October so all the information that you would have required to allow you to then provide advice to the Immuneration Committee and the board to take it as well who provided that advice at any point that Mr Gray sorry Mr Doyle provided that advice to you the information is far as either informally or formally I didn't take advice or instructions at all from Mr Doyle the information as far as I can recall may have come through his PA but she was also the PA to Mr Gray and the actual administration functionary was carried out by Mr Doyle's PA so did you see it as your role to ensure that both that information was objective and you know was not information that has been purely provided to to reach a certain conclusion my instructions from Mr Gray and he provided me obviously with a copy of the letter from the Scottish funding council at the time I think it was Mr Howells that issued that letter and that was on around the 10th of October my instructions were to review the decision that had been made back in January and to advise the college on the legality of that decision and indeed what followed onwards in relation to payments that were being made to Mr Doyle and possibly other senior members and during this process did you see any evidence of collusion that to reach a certain arrangement that whereby Mr Doyle would enjoy so you didn't see any evidence of that it would there was no evidence or and it was not apparent to me that there was any suggestion of collusion necessarily no so you have seen the official report from our discussions with the remuneration committee yes sir and one of the questions I put to them was did Paul Brown who's yourself in terms of the legal advisor to the remuneration committee provide the guidance of the Scottish funding council guidance dated 2000 which is a significant document it's one that is discussed in all of our evidence sessions it's the principles that should be set out the advice is that that document wasn't put before them that you didn't advise them on it is that your recollection? I think actually to be when reading Mr what Mr Doyle has said and indeed here in this morning what Mr Banks has said as I understand what Mr Banks is saying about my remit or my role was as reported to him by Mr Doyle and my understanding what Mr Doyle understanding or suggests is that I was or bigot Bailey were brought in to advise the committee going forward potentially about their role in remit etc etc that wasn't the case at all I wasn't brought in in any way shape or form to replace the auditors and indeed I wouldn't have possibly been able to do so I was brought in to advise on a decision that had been taken back in January and to essentially advise on the legality of that decision I wasn't an internal auditor and why do you think Mr Banks has referred to this because we found the pretty amusing as well and unusual was I understand what Mr Banks said is that was as reported to him by Mr Doyle okay so but I suppose question the real question I'm asking here though is this document's a significant document so when you've researched this which I take it you've done prior to been appointed after your appointment first thing you're going to look at is what does the Scottish Funding Council hear going to provide a significant sum of money I mean it's talking about the above six figure sums significant funds here should you not have referred to this document and said to the to the Munition Committee look guys this document's got a number of requirements placed in you I need to make sure that I steer you through this so why did you have given us that? My instruction again I think the other thing is Mr Doyle seems to suggest that Bigot Bailey was brought in he didn't use the word auditor he used as clerk to the committee and advisory to the committee that was not my role a remit at all my role and remit was to consider the implications of the decision that they had made back in January and the legality of that decision they'd made back in January I understand that but it doesn't you've not answered on the question sorry the question is why didn't you provide a basic document in this discussion that is the 2000 document the year 2000 submitted by the Scottish Funding Council it's a very basis by which called you should operate why didn't you ensure that they were briefed on this and they had it before them when you were advising them my understanding was that they all did have the documents before them they were aware of it they said well actually that we had all members of the minration committee before us as you'll see from the official report and we asked I showed them the document and all of them said we've never seen that document nobody placed it before us my understanding is that there seems to be some major confusion over timelines in this and actually the problem is that the information and the investigation I was carrying out was in relation to it was retrospective in relation to a decision that had been taken some time earlier at in October I was provided with a bundle of documents which I was informed at that time was information that was made available to the mineration committee back in January that included a copy of the SFC guidance and did you brief them on it did you discuss it with them I had discussions with them about the guidance and indeed all of the obligations on them as members of committee on the decisions that they have taken and what they need to be cognizant of when taking those decisions so what kind of issues did you mention to them then that the what kind of issues did you refer to when you so you know but as a some example you could set and say yeah when the minration committee were discussing this I specifically advised them that this is what was required of them from the Scottish Funding Council in this document one of the key issues I think here is that and what seems to be in debate was the payments that were made to Mr Doyle as I understand it ultimately throughout my investigation and into this matter on reviewing the documents and going over them with the individual members of the REMCOM and discussing their understanding and knowledge of these at no point in time did any of that committee alter their view on the payments that were to be made to Mr Doyle the discussion and debate actually surrounded the other members of the senior management team but what they all confirmed and was satisfied me that they were aware of was that when they made the decision back in January they were all clear that what they were making relation to Mr Doyle was a commitment for those payments so I just ask finally you provided informal or all different kinds of advice to the college over that period from January let's look at that period of January 2013 up until when Mr Doyle departed at the end of October did you have any informal discussions with Mr Doyle during that period about his severance arrangements or Horry's I mean do they never say to you what looks as if I'm you know going to be you know at the door and you know there's issues about my severance package it's just never whether it was never discussed just to be clear I the advice that I provided to the college was on a very ad hoc basis it was actually very rare for me to be requiring to provide advice to them as far as I can recall I wasn't providing any advice to them between the periods of January and just just again to be clear I was not involved in any way, shape or form in that decision in January I totally understand that but I wasn't nor was I involved in any advice I had no discussions with Mr Doyle at any time about his arrangements or otherwise there was no level of any contact I was no level at all yeah so and it was just at that point when you were appointed I mean was it done via correspondence the appointment that was did Mr Gracie can make exchange contracts of who will carry out this process we'll we'll confirm and write and it was that not what you would expect though to there be some kind of exchange confirming on what terms it you would be not necessarily as long as the instructions were to the lawyers were clear then there wasn't I don't have a concern only verbally orally yes I would have in my firm would have written a letter to them saying confirming the terms upon which we were engaged but it's to advise in relation to the decisions taken by the Immunisation Committee in January to so just finally you can you can provide us with that exchange of correspondence that took place I assume that must be in the college the file can I just sorry just to the committee are clear obviously I've left the firm I've been provided with the copies but I haven't got a whole entire access to the file I have been provided what I understand on the extract or the papers that are in the file but I take it we can make a request to your firm to provide the information exchange that took place where you had clarified here's the terms of how we'll go forward with this and possibly the cost as well because I take it it'd be cost implications for the advice that you provided that would be in our standard terms of engagement can you recall what the costs were not specifically no in excess of certainly in excess of £1,000 possibly because more on that okay maes ganlon can I just ask we've obviously had evidence from the Immunisation Committee that we've had written submissions and oral evidence and we're certainly not aware of the SFC guidance some said they weren't aware that any guidance existed we had six of them here and others said that they thought that what they were being asked to agree to the very generous sevens payment to Mr Doyle was in agreement with guidelines today we've heard from laryon gun now what she says was you know people were a bit worried about their future and a bit uneasy about what was going on so the meeting of the 28th of January we've heard from the Immunisation Committee and the director of human resources said that the letter to Mr Doyle which is basically the reason we're all here was a letter of comfort now how did that letter of comfort in your view become a legally binding document that was not what it was set out that was not the understanding of the committee it was just you know with the merger being a bit on and off it was a letter of comfort this was what might happen should he not get a job in the new setup so how does a letter of comfort become a legally binding document where a man is entitled to hundreds of thousands of pounds above the recommended guidelines I don't recall the members of the committee mentioning as a letter of comfort it's in our evidence today from the human resources director I'm not sure of the committee my role as it were to advise them on the terms of the letter that they received from the funding council in october and in light of that letter to advise them on the decisions that they had made in january and whether they were legally binding ultimately and as my report confirms in the letter and the minutes of the meeting has ratified eventually by the REMCOM confirmed that they all accepted that that meeting they had agreed legally to provide Mr Doyle with an enhance evidence package in the terms that they discussed so the letter from Mr Grave which was written to Mr Doyle a day or a couple of days after the meeting on the 28th of january that was the legally binding document which others thought where it was a letter of comfort well I can't speak for anyone else well you said it was a legally binding document that had to pay the money the agreement indeed the agreement that they had with that the committee had agreed at that time in my opinion was legally binding okay can I ask which one if you wrote the advice in respect of the liability of board members dated december 2013 it's DLA Pimper who took over from Bigart Bailey 18 December 2013 was it one or other if you wrote we're not members of that firm as I understand that they were advising the Scottish funding council that's a completely different firm the Scottish funding council sought legal advice after the event from a different firm there's so many lawyers and auditors and the accountants and you have to forgive us if we get a wee bit confused here I think if there's a legal firm in Scotland it wasn't involved in Co-operate College they really deserve a gold medal my goodness for keeping out of it well so I can't really looks like we'll need to ask them and can I sort of ask you general questions on this advice because as my daughter's an employment lawyer and I dare say that what applies to one firm applies to another she could apply for a job yes I'm sure can I just say can I just say information was raised about insufficient and inadequate paperwork concerns were raised about the lack of a business case concerns were raised that there was a lack of an audit trail so apart from the very over generous payments to Mr Doyle and all the uplifts that would take us all day to talk about the money that was handed out apart from all that the auditor general's report is about the lack of a business case the inadequate paperwork etc did you at any time talk to in your role as an employment lawyer talk to Mr Doyle and say look you know the payments are in order but you really have to get your admin right in order to satisfy good governance guidelines it wasn't my position to speak to Mr Doyle I was advising the board and taking instructions from the board but did you advise the board on that yes I did and that was indeed the very issue that I was required to look at so why would you advise them in this other firms giving them the same advice were they paying two separate sets of lawyers for the same advice can't speak for the other firm as I understand it were instructed by the Scottish Funding Council not by Coatbridge College as I understand it I can't speak for the other firms okay so you advised Coatbridge College that there should be a business case they should be able to justify all of the payments that were well above the guidelines so why did Coatbridge College ignore all the advice that you gave them I was advising retrospectively what I was there to assess was whether or not they had done that historically and I was provided with papers which included a business case as it were oh we've never seen a business case maybe you could provide us with that I'm happy to do so so you came in in October just if we can just get this I think it's important the timeline you got a call from Mr Doyle in October about the 10th or the 11th the auditors came in the following year April 2014 that was when we discovered that there was no business case nothing to justify these over generous payments so what advice did you give Coatbridge College between when you came in and the auditors finding out the lack of evidence here I can't speak for the auditors nor indeed the auditor general as no one's asked me for this I expected you'd said earlier that you'd received a call from Mr Gray is that correct yes yeah so it's rather Mr Doyle Doyle yeah just to clarify for that I know it's also confusing there's so many John's as well the first call was John Doyle the first call was John Doyle who said you would get a call from John Gray I will get a call from John Gray and it was instructions were taken from John Gray as a chair of the board so John Doyle phoned you and he said you're about to get a call from John Gray did he tell you what John Gray was likely to be calling you about? we have received a letter from the funding council and John Gray will be calling you to discuss it so Mr Doyle said we've got a letter from the funding council we're in a bit of trouble here they don't do you like the payments that we're recommending we need a bit of legal advice to help us out was that the lines of the phone call? no that's not what you said at all Ollie said to me there was no reference to we're in trouble or otherwise Ollie said is that we'd received a letter from the funding council and that the board would need our advice on it and therefore Mr Gray would contact me to discuss that right, just my final question convener we've got so many people offering advice to Mr Doyle and the board and we've got Scotland Creef and all the rest but apart from saying to the board that they really had to have a business case to justify what they were doing did you give them any evidence about personal liability for the decisions that they were making? did you give them legal advice in terms of them acting as a charity and also did you ensure that the remuneration committee I mean we've been told that information was withheld from them we've been told that they made a decision on the basis of the information they had which did not include the Scottish funding council less than generous payments that would have been paid out there seems to be a case of withholding information here that's in the auditor general's report have you satisfied do you think the auditor general's report is accurate in that sense? I can't comment on the auditor general's report and I wasn't asked to provide any information or otherwise to the auditor general what I can say though was the information that I was provided at the time I was provided with a pack of papers which included a business case included funding council guidance included the letter that the college had received in October from the funding council then Lawrence Howell it included an email exchange that had happened in January of that year between Mark Rathall of the funding council and the draft minutes of the REMCOM meeting among other documents okay can you just given that we don't have access to this business case that justified a £304,000 to payment to Mr Doyle can you give us a verbal account of the business case that was used to justify that payment the document that I understand was presented and I was informed was presented to the remuneration committee at that time made reference to was that in January were they given a business case in January? yes and I think actually Mr Gilliver referred to that as being in the 25th of January information that had been provided to them and who provided that business case is it Mrs Garn? I'm not sure but my understanding is it was prepared by Mr Gray but I couldn't say it okay so perhaps you can tell us why that business case justified the exceptionally high payments to Mr Doyle it wasn't for me to say why it justified the payments for the REMCOM to decide that but if you could tell us what was contained in it what was contained with it was an explanation general terms and I'm happy to provide a copy explained from as I understand it the chair of the college explaining the difficulties that there were with Merger et cetera the sterling work that Mr and I don't think that's the phrase it's nestled in there please I'm paraphrasing that Mr Doyle had done for the college and in order to ensure that the students et cetera of Coltbridge College were protected in the staff that it would be beneficial to ensure that an arrangement was in place for Mr Doyle to see that whole process through that's my understanding of what the business case was does it give you concern that business case was not used as information and given to either the internal the external auditor we don't know about the due diligence or whatever part you played in the accounts et cetera it's all very confusing but does it concern you that the business case for Mr Doyle's departure has not been seen by any of us or as I understand it audit Scotland I wasn't aware of any of that until I read the minutes of this question I'm not asking if you're aware I'm asking does it concern you that the Scottish Parliament's Public Audit Committee and Audit Scotland as I understand it do not have a copy of that business case that was used to justify the £304,000 to Mr Doyle it's not for me to provide an opinion on that I think that's a matter for the committee to determine Okay, that'll be Scott Thank you Mr Graham said that there were three grounds in the business case this is the business case that none of us has seen before the auditor general says doesn't exist all appears witnesses have said didn't exist I am flabbergasted that you have a business case we don't the auditor general doesn't no witness that we have had in front of us in the last month has said there's a business case What I'm telling you is that I was provided with a bundle of papers which included a document headed private and confidential members of your Munionation Committee only in confidence as I understand it That was on the 28th of January it's 2013 It was an honour around the 25th of January as I understand it Please bear in mind that I was provided all with this document in October I quite understand but also just so I'm clear for the benefit of the committee I was also provided I say with other documentation and sorry just have again so I'm clear I've mentioned three excerpts perhaps from there they're not they're not they're only so do you think that actually I mean your interpretation and correct me if I'm putting words into your mouth but your interpretation is you saw three grounds which could be considered to be a business case but some others like an auditor might say a business case would have numbers timelines explanations detail in other words and that would be what might normally particularly in the context of the funding councillor advice and guidance be considered to be a business case it may be it may be that an auditor would have a different opinion of what amounted to a business case but again just and on the subject actually as Scanlon mentioned is that as I say my advice was essentially retrospective I was provided with information as part of my investigation I did speak to the members of the remuneration committee and I wanted to be certain with them that they understood what their obligations were in terms of charitable and other organisations and each of them were experienced members of committees and they all assured me that they understood what that was and that they knew what their obligations and responsibilities were in the information I've been provided was indeed a copy of the guidance in the minutes there is reference to the funding council guidance when I spoke to them they all assured me that they were fully familiar with their obligations and all the information that they needed I cannot comment any further on what they've said about whether or not they had this before I'm not asking you to the three grounds you mentioned the third ground the third basis sorry for the business case was that Mr Dog would see I think of your words the process through well he didn't because the merger came to an end in February but Mr Dog didn't leave in that time and he made with the college no but my suggestion to you that the basis for his severance package agreed at the 28th of January 2013 on the information you've given us today which I'm sure is entirely right is that he would the Mr Dog would see that process through but that process did not was not seen through because it came to an end in January when he and his board withdrew from the merger process I don't think that's a matter of record well the understanding my understanding indeed what Mr Banks suggested this morning is that everything was void as at that time that's not the case at all in relation to Mr Doyle his the business case as you'll see that was nothing to do with assuming that that merger would go ahead at that particular point in time and indeed his there was debate I think as I understand it again please it's all retrospective about whether it was to be a federation or a merger and then there were various there was I think colloquage within and then they were out and then they went back in but that didn't alter in my opinion the decision that the remuneration committee had come to in January which obliged them to provide Mr Doyle with this severance well that case the business plan if it does exist didn't stack up at all because if one of the grounds bit was that he received a process through and that's now not material to his severance package then it can't be considered to be part of the business plan can it as I understand it that was the decision he made at the time based on the decision plan at that time again if I may the I still my opinion was that there was still a contractual obligation on the college to provide that severance package to Mr Doyle and I confirmed that my opinion in October okay and was that is that contractual obligation because they had written the letter the board had written written that letter or rather the remuneration committee had written that letter to Mr Doyle after the meeting on the 28th of January is that why that obligation existed the decision had been taken as I understand it by the remuneration committee and that had been conveyed to Mr Doyle so the advice that we got earlier on that there was no financial liability can't possibly be considered to be the case again if I can just explain that I mean it's very confusing I appreciate the timescale for everyone in the committee and perhaps some of the witnesses and independent bits of knowledge the advice in relation to the senior management team was different from the advice for the principal and the minutes at that meeting and the meeting confirmed the arrangement would be for the principal what there seemed to be some concern and confusion over was how that applied or whether that applied to other members of the senior management team and in fact ultimately the debate arose around whether in fact it should apply to the home of the staff of the college not just simply the management team but in relation to Mr Doyle that was applicable at that time and that was an obligation that was made at that time the letters to the senior management team referred to as I understand being referred to as being dependent on the merger completing as at 31 July and that's not what I understand from Mr Doyle his was dependent on him just being there to continue to run the college until such time as the college no longer existed effectively so there were different letters as I understand on one hand to Mr Doyle and on the other hand to senior members as a management team as I understand it that's very helpful and the advice actually just on that point that ultimately about being void or otherwise that was advice I was able to provide to the remuneration committee on the board in October again having examined all of the people work retrospectively and the fact that it was time was limited in relation to the senior management team I was able to reach that view and not aware of anyone and I wasn't involved in any discussions at that time I wasn't aware of anyone making that decision in February on the other hand so in short your advice in October when the remuneration committee met again and bearing in mind you've clarified very healthily you weren't the auditor you were just providing HR advice that was the role you were asked to take forward by Mr Doyle your advice was that the binding agreement that they had entered into in at the 28th of January stood and therefore they just needed to get on with it and commit to it and pay it my yes indeed and as I say I didn't just rubber stamp their decision I examined all the information that was available to me and the further information that I requested of them and indeed spoke with the members of the remuneration committee there's been mentioned earlier on of the committee's being paperless and the first meeting I was involved in was one in October and certainly they all had as I recall iPads I was issued with a set of papers and by the members of the committees had iPads and my understanding is that all the papers relating to that the committee meetings whatever it be were uploaded on to them We'll probably go around around the circles on who saw what and when and now now we'll get nowhere on that one but but just sorry just to be clear just to be clear when I spoke with the members of the committee and the remuneration committee again reviewing the paperwork and ensuring that the decision had been in my opinion taken legitimately and legally that I was satisfied that they were all aware of the obligations on them as members of the committee and what the obligation included being fully familiar with all the information Were you satisfied that they also knew that Mark Bathwood said and this is your paper to us or your submission to the committee that Mark Bathwood said in his discussion with Mr Gray before that meeting in on late January 2013 that he would and I quote encourage you strongly to stay within these parameters for the voluntary severance arrangements As I understand it what had been discussed with Mr Bathwood was relayed to the committee the remuneration committee Did that come up again in the meeting October the remuneration committee in October? No, the remuneration committee in October was focusing very much on the minute that was taken in January which was disputed of course wasn't it? Well yes it was disputed in some respects but again it was disputed not in respect of the Mr Doyle there was no dispute about the arrangement for Mr Doyle just about the senior management to you Okay, just two final questions if I may convene the first did you advise on confidentiality agreements? I as I understand it the college had a standard severance settlement agreement again sorry just again to be clear I wasn't advising in January what I what I if anything I would have been advising October and the terms of a settlement agreement that's the severance formal severance agreement and there are within that there is a confidentiality agreement despite the fact it's it's incompatible with Scottish funding council advice and guidance the the my understanding of the reason for it being in there was is to encourage people not to disclose it to others not that they shouldn't be disclosing it to those that are entitled to be aware of the information that doesn't seem a policy that's worked very well there we are and and did you have any discussions were you aware of the guidance as well from the funding council given you I appreciate you had to review a multitude of papers that said the internal auditor had to be involved in the set in any severance voluntary severance arrangements and proposals in that regard the funding council guidance made reference to and I think it was referred to paragraph 36 the external auditor which is post the event as I understand it paragraph 35 talks about the internal auditor reviewing decisions ultimately and I think as convener my report my having requested this information I was informed that the internal and external auditors had been informed so who informed you that I can't recall did it mean Mr Doyle perhaps no it wouldn't be Mr Doyle because I wasn't discussing I wasn't taking advice or instructions from Mr Doyle was it the director of finance I don't recall speaking directly but mostly my instructions either came from Mr Gray or Mr Keenan and they so they told you at some stage in October that the internal or the external or both auditors had to or were involved at that process as my recollection was I've been asking them to confirm that they had complied with the guidelines and the audit were aware of this and yes certainly they were that's what aware means is yeah I get again sorry just if I may for the benefit of the committee I think Mr Doyle made reference to the suggestion that Bigot Bailey in a way of we're cheering and it's not cheering sorry secretary at to the meeting that's not correct we were there I was there in my capacity as a legal advisor and just to survey what had gone on at the remuneration committee meeting I was there very much providing advice but at the board surveying my trainee at the time was there in the note taking capacity because at that stage Lorraine Gunn was no longer there no that's fine that's very fair the question I forgot to ask about the business case and I just wanted to conclude on this is you have said there was a business case and it's presented in on the 28th of January 2013 to the remuneration committee but our my understanding is that must be presented orally that what was there a paper you've referred to a document or some paper that you're going to give to the committee I was provided with a paper of what I was informed that the committee were aware of when they made that decision again I'd say Paul Gilliver referred to I think there was another email somewhere from Tom Keenan where they referred to this was sometime in October his understanding of what the committee was going to do The committee wasn't on that meeting as we know so his view and frankly it's neither here nor t