Moray College has vowed to form “robust plans” to stave off a financial crisis following a damning watchdog report.
The strife-hit Elgin learning institute was blasted for having “weak financial planning and management arrangements” in a study completed by Audit Scotland.
The report said the college is on course to be over budget by £472,000 for 2016/17, and forecast funding shortfalls until 2019.
Last night, bosses came out fighting and said work was already under way “to ensure the college operates within a sound financial framework”.
A temporary freeze on the recruitment of support staff has already been implemented and a severance scheme for employees is being considered to reduce costs.
Moray MSP Richard Lochhead has been pressing for the college to receive a greater share of funding from UHI (University of Highlands and Islands) – believing it to be underfunded by up to £500,000 compared to other colleges under the umbrella.
Yesterday Mr Lochhead repeated his calls for the institution to receive more money.
He added: “In the past few months I’ve questioned the disadvantageous funding deal that Moray College faces and I understand the UHI board were investigating this – this report reinforces the case for a fairer settlement.
“It’s therefore essential that UHI, with input from ministers, sort this out once and for all so we can bring stability to Moray College.”
Audit Scotland has stressed the college “urgently” needs to agree a recovery plan with the Scottish Funding Council (SFC) and told UHI to ensure the Elgin centre could deliver its priorities within available resources.
Financial problems have been blighting the learning centre for several years. The college received a £560,000 cash advance in 2015, which was repaid by the end of October that year. However, another advance of £695,000 was paid in June 2016.
A spokeswoman for Moray College said they were not the only education institution to face budget difficulties.
She said: “Moray College UHI is aware of the report and has been liaising closely with Audit Scotland on this matter.
“The board and management of the college welcome this public scrutiny and have been working with staff to ensure the college operates within a sound financial framework.”
A UHI spokeswoman added: “We take our governance responsibilities very seriously and will continue to work closely with Moray College UHI and the SFC to address the issues raised and implement robust solutions.”
The report is the latest in a series of rows to engulf Moray College.
Two years ago former principal Frank Hughes was sacked just months after being appointed.
Accusations were made that staff were being kept in the dark while bosses at the Elgin learning centre said “things were not working”.
In August 2015 UHI wrote to the chairman of Moray College highlighting “serious concerns” while demanding action in return for short-term funding.
New principal David Patterson was appointed in March 2016 with an interim director of finance recruited to develop a plan for the next three years shortly after.
Since then the college has been discussing a recovery plan with UHI, which was finally agreed in February.
This month the Press and Journal revealed a student had quit his university course at the college after he was “abandoned” without any tutors for four weeks.
The hospitality management student revealed six others on his course had also left due to failings on the UHI programme.