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Funding council auditors demanded urgent improvements to management and governance at the Quality Assurance Agency after its first audit.

The Higher Education Funding Council demanded immediate action to strengthen the agency's strategic planning process and called for reforms to improve accountability.

This will strengthen universities' concerns that the QAA is not fully accountable for the Pounds 3.24 million it receives annually from the institutions it inspects and the Pounds 4.4 million it receives from the funding councils. The QAA is considering increasing its contributions from universities.

The QAA was audited by Hefce's audit service in October 1998. In May 1999, the QAA confirmed the audit had led to 22 recommendations for improvements.

It has emerged that after a Hefce-approved action plan to develop the agency's business to 2002, the QAA is still to develop several areas of management practice. Among plans for further improvement the QAA lists developing "supporting resource strategies to allow the agency to deliver its business plan; embedding progress monitoring and reporting systems; and strengthening the links between planning and budgeting."

It has also emerged that "in light of the Hefce audit" the QAA reviewed its code of best practice for board members and improved the register of members' interests.