The National Audit Office is to "closely monitor" activities at Hull University following The THES's reports of financial and academic management problems at its business school.

Following an NAO investigation, Sir John Bourne, the comptroller and auditor general, has confirmed that there have been "clear weaknesses" in the control of finances, especially with regard to overseas operations, at Hull's former school of management, and that there was "an inadequate management response to the weaknesses". Sir John said that much had already
been done to strengthen accountability at the university, notably as a result of a review put in place by vice-chancellor David Drewry when he joined Hull in October 1999, and following an audit of overseas operations in May this year.

But in a letter to an MP who complained about activities at the university, Sir John says: "I... will ensure that my education team continues to monitor closely the situation."

The THES reported in May this year problems that involved a husband and wife management team. Dean of what was then the management school, Richard Briston, was rebuked twice by the vice-chancellor: once in 1996 when he technically breached procedures to upgrade overseas students' results, and again after auditors discovered unauthorised expenditure along with some "debatable" expenses claims in one of his school's departments, management systems and sciences (MSS). MSS accumulated a Pounds 500,000 deficit under its former head, Robert Flood (who was stripped of financial
responsibilities in 1997). Flood boasted in a 1996 journal article that he had evaded the university's rules as far as possible to boost his department's multimillion-pound overseas business.

Professor Briston has said that the reproof relating to assessments was rescinded as the decision was educationally justified and he had consulted an external examiner. He has claimed that the other, which resulted from the expenses problems, was unfair, as he had entirely properly helped bring the financial problems at MSS to the attention of the university.

Professor Briston lost his position as dean in a 1997 restructure but remains a professor at Hull. Professor Briston's wife, Moyra Kedslie, who is now president of the Association of Chartered Certified Accountants, resigned as joint head of the department of accounting and finance during a 1998 internal investigation into a management "crisis".

"It is clear that the departures of some staff and changes of role for others helped to resolve a number of problems," says the NAO's letter. But it confirms: "Between 1993 and 1997 there was an inadequate management response to the weaknesses identified and that this was essentially an issue of corporate governance." The NAO said: "A significant step towards
addressing the issue was taken only with the establishment", in 1997, of a new faculty of social sciences, which meant that a new overarching faculty dean would take over "responsibility for financial matters".

In response to allegations from Hull staff that individuals in the school were able to make substantial personal financial gains through overseas activity, the NAO says: "Again, it is apparent that financial controls were weak." Payments under a remuneration system for overseas work by programme directors and tutors, the NAO says, "were above the market rate for the seniority and background of the staff involved". Although they were regarded
as high by the NAO, Professor Briston had gained formal agreement for them, and they were disclosed in accounts. The scheme was discontinued in 1997.

The NAO says that controls over academic standards at overseas franchises were "weak", but that the key franchise giving rise to concerns - Emile Woolf College in Malaysia, where assessment procedures were breached - was halted in 1997.