A report of the Comptroller and Auditor General has raised concern at the high level of successful appeals by applicants to Student Universal Support Ireland (SUSI) for college grants.

The report, which examines the cost and service impact of creating SUSI in 2012 to replace the local authority-based system of awarding grants, noted that 11 per cent of decisions in 2013 were appealed, and 74 per cent of these were overturned.

“This raises issues regarding the quality of assessments and the level of quality control,” it said.

“The reallocation of staff from the quality control team to the assessment team in response to greater than expected demand may have reduced the overall quality of its decision making about applications.”

The report also found that “both the level of staffing allocated to SUSI and the level of outsourced services are significantly higher than envisaged”.

Outsourcing contracts between SUSI and Abtran for call centre and document management services cost €5.9 million up to March 2013, three times the budgeted amount of €1.8 million.

SUSI was set up three years ago by City of Dublin Education and Training Board (CDETB) following a tendering process held by the department of education, to centralise the duties of 66 local government awarding bodies.

The department, however, declined to set performance targets for the new agency, something that was strongly criticised by the C&AG.

The spending watchdog pointed out that a service agreement was only signed in February 2013, and it took another eight months to set specific targets.

The latter brought about an improvement in the “timeliness of payments”, which was “a key performance measure for student grants”.

Moreover, the proportion of decisions appealed dropped in 2014 (to 8 per cent). Some 60 per cent of these were overturned.

The C&AG says: “It was envisaged that SUSI would deliver a better service to student grant applicants through streamlined processes, greater consistency in dealing with applications, faster processing due to economies of scale and implementation of an on-line applications system.”

However, “many of the expected benefits of the new centralised process did not materialise in 2012/13.

“The performance by SUSI was much improved in the 2013/14 academic year. Compared to the previous year, there was a 70 per cent increase in the number of awards paid by the end of December.

“The target level of performance set in a formal agreement with the department was achieved.”

The C&AG says CDETB “departed from good practice in a number of areas”, and it queries why the contracts signed with Abtran did not contain penalty clauses for failure to meet performance targets set out in the tender documents.

CDETB told the C&AG “it would not have been possible, in the absence of a baseline for national-scale processing levels, to set or agree penalty terms”.

The report notes: “The achievement of potential economies and efficiency gains was part of the business case underpinning the proposal to establish a single awarding authority.

“However, the projected benefits were not quantified, and the baseline cost and operational performance of the existing system had not been identified so it is not possible to evaluate whether the projected benefits have been fully realised.”

SUSI employs about 60 staff but this rose to over 100 in late 2013, through redeployment within the department, to clear the backlog of applications at the time.

Underperformance of the system in 2013 was highlighted by the fact that there was still €17.7 million in SUSI’s bank account at the end of January 2013.

This had fallen to €2.4 million by the end of July 2013.

Through SUSI, the department provides student grants - which totalled €366 million in 2013 - to students to cover tuition and other fees, and for maintenance of students.

Data from the agency shows that school leavers in Cavan, Monaghan and Donegal are most likely to get a student grant and those in Meath, Kildare and Dublin least likely.

The C&AG did not address long-running complaints surrounding the fairness of the means-tested system.

A proposal by former minister for education Ruairí Quinn to include assets such as farms in the assessment of grants was shot down by Fine Gael two years ago.