A quality watchdog has criticised the quality of overseas franchise arrangements in a second institute of ÖйúAƬ.

A draft report by the ÖйúAƬ Quality Council finds fault with Swansea Institute of ÖйúAƬ's quality assurance procedures for programmes delivered overseas. The report could threaten the institute's long-cherished hope of securing degree-awarding status.

Another HEQC report due out next week, but already widely reported, was critical of Southampton Institute's overseas arrangements.

The Swansea institute's governors commissioned a Coopers & Lybrand report last year into overseas franchise operations. This week governors asked for the report to be produced.

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The institute's quality assurance officers say they have been hampered in their effort to conduct a full internal audit of the overseas franchise operation.

The HEQC report, due to be published later in the summer, commends the institute's UK-based courses but criticises the institute for allowing "its overseas collaborative provision to develop separately from the quality assurance procedures and practices pertaining to delivery in the UK".

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This report reinforces concerns of the University of Wales, which validates courses delivered by the institute in Malaysia, Indonesia and Finland. Alerted by damning external examiner reports, the university instigated an investigation which found that students in Malaysia taking the University of Wales-validated MBA achieved an average mark of 70 per cent compared with an average 45 per cent for Swansea-based candidates.

This week the university's vice chancellor warned the institute that the MBA scheme in Malaysia will be suspended if the problems are not "satisfactorily resolved".

The institute transferred quality assurance of its overseas programmes in December last year to the academic development office, which oversees UK courses. The HEQC report, based on a visit in January, "welcomed" the measure but said it was too early "to evaluate the effectiveness of the new arrangements". Since then, quality assurance officers have faced difficulties ensuring parity between domestic and international courses.

Hywel Rees, the institute's vice principal, said that the concern over the overseas franchise operation had been "blown up out of all proportion". He stressed the HEQC report is "one of the most positive reports I've seen" and denied that it was critical about the overseas business. He suggested the Malaysian problems have been resolved.

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