Funding chiefs are to investigate the extent of the "democratic deficit" in the governing bodies following a survey finding that some institutions have excluded staff and students from their corporations.

The survey of more than 200 colleges conducted by the Colleges Employers Forum as part of its Nolan Committee evidence reveals that 25 colleges have no staff members and 80 colleges have no student representatives on their governing bodies.

Sir William Stubbs, chief executive of the Further Education Funding Council, told college principals last week that the council was increasingly concerned with college governance and that it was having to deal with mounting numbers of questions about representation on governing bodies. Referring to what some termed the "democratic deficit" he told delegates to the annual meeting of the Association for Colleges: "We are not flexing our muscles over this but we need answers."

Sir William said he would seek to establish how many colleges had drawn up registers of interests for members of corporations as a follow-up to instances of "mismanagement" in the sector.

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The funding council will also consider whether colleges have introduced a governors' code of conduct and could make this a condition of funding.

Hereward College in Coventry is currently struggling with a deficit in excess of Pounds 1 million as a result of "gross mismanagement" by the previous governors according to Michael Shattock, newly appointed chairman of governors there.

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All the former governors resigned recently following the launch of a fraud squad investigation into the college's finances and Mr Shattock said the auditors report "revealed a shocking story even to me".

Mr Shattock, who headed the recent investigation into mismanagement at Derby Wilmorton College, added that Hereward was performing a crucial role in its work with students with physical and sensory disabilities, and must continue.

Roger Ward, chief executive of the CEF, said he had commissioned the survey of the structure of college governance amid anecdotal evidence of high turnover, low attendance and difficulties in recruiting college governors. "Sir William's fears are not borne out by our findings," he said.

The evidence, according to Mr Ward, supported the CEF's view that corporations were working successfully and that an FE ombudsman could allay the need for greater accountability.

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The survey also found a 50 per cent average reduction in overall size of governing bodies compared with their former local authority counterparts.

Staff representation could cause tensions, according to the findings. Staff members who were trade union nominations could quickly lose credibility with other board members or be "unable to accept the principle of collective responsibility" and this had led some colleges to seek other ways of involving staff.