The Dáil's spending watchdog is to investigate an "anomalous" €160m cash mountain in Irish universities which is growing by €30m a year, the Irish Independent can reveal.

The substantial cash reserves have arisen since 2009 when pension schemes in five universities were transferred into the central State fund.

However, the Higher Education Authority (HEA) has continued to pay €30m a year into the universities as if their schemes were still operating, and TDs are now demanding answers as to what is going on.

The universities at the centre of the new investigation by the Dáil's Public Accounts Committee (PAC) are: University College Dublin, University College Cork, NUI Galway, NUI Maynooth and Trinity College Dublin.

The figures emerged as more than 56,000 Leaving Certificate students await the release of their results on Wednesday.

This will be followed next Monday with the CAO Round One offers, in what is a record year for applications for college entry at more than 79,000.

An ongoing increase in Leaving Certificate candidates -linked to the birth rate and a drop in early school-leaving, combined with growing demand for higher qualifications - is driving the rise in college applications.

Liabilities

Meanwhile, it is understood that the money being paid by the HEA is to meet long-standing pension liabilities from the five colleges, but concerns have been raised as to why and how this is being done.

The HEA has denied the payments amount to a "bail out" of the schemes which were hugely in deficit, insisting it is simply ensuring that retired employees receive their legal entitlements agreed with their employers at the time.

However, at the time of the transfer of the scheme in 2009, the Department of Finance and others were unhappy at the loose controls of the schemes in the sector, particularly in relation to the awarding of pension top-ups to academics.

According to the State's auditor, the Comptroller and Auditor General, the HEA "had accumulated funds in five universities of €159m at September 30, 2014. On September 30, 2013, the figure was €125m".

The C&AG, Seamus McCarthy, said: "Essentially, it arises from a change in the pension arrangements in respect of those five universities as a result of the 2009 Act where an existing pension fund into which the universities were contributing was transferred to the National Pensions Reserve Fund."

"However, the Higher Educational Authority, HEA, continued to fund them as if they were still contributing and they were instructed to pay the surplus funds into individual pension fund accounts.

"They are recorded in the individual universities but they will be there in the future to meet liabilities that otherwise would fall on the HEA. It is an anomalous situation, and the fund is growing by about €30m a year," he said.

Chairman of the PAC John McGuinness has told the Irish Independent that the heads of the universities, as well as the HEA, are being called in before it to explain the cash mountain.

"They have been warned by the C&AG to bring this in through their mainstream accounts and show it and that is what they should be doing. Putting money to one side and treating it differently is not acceptable in the context of public transparency and accountability," Mr McGuinness said.

The HEA has said that previously the cost of meeting the pension liabilities in each of the colleges used to be covered by the normal block grant given to them every year.

The universities must now put all of the model pension scheme funds into a separate pension control account, it said.

"These combined pension control accounts totalled €159m gross at September 30, 2014," the HEA said.

It says however, that there is a substantial deficit accumulating in the closed scheme to the value of €156m at that date due to the age profile of the members.

"This €156m needs to be offset against the cumulative surplus on the model scheme," a HEA spokesman said.

Irish Independent