Image source, bbc

Tory MSP Liam Kerr moves on to capital spending and asks if £27m allocated for college repairs has been spent on that.

Ms Gardner says the SFC is looking at this and goes on to warn about the costs of moving into a world more reliant on digital technology.

Mr Kerr asks one of his "daft laddie" questions about revenue funding being used instead of capital in some cases.

Ms Gardner explains the government has limited capital spending powers and must look to the revenue budget.

Tory MSP Bill Bowman wonders about accounting inconsistencies.

Ms Gardner says there has been good progress on using common assumptions to prepare forecasts, but some colleges including mitigation efforts in their forecasts while others did not.

Regarding annual audits, she confirms further guidance has been provided to ensure greater consistency in future years.

Image source, PA

Labour MSP David Stewart pivots to European Structural Funds, saying he is reluctant to say the Brexit word but he has to ask about the loss of this funding stream.

The Treasury has promised to underwrite the "structural funds", external until the end of the 2014-20 EU budget period.

Ms Gardner says the report says a little about the impact of Brexit on colleges.

Colleges in the Highlands and Islands and the West of Scotland have benefited the most from EU funding, says the auditor general.

She adds this will be replaced by the Scottish government via the UK government.

Ms Gardner accepts the risk Mr Stewart highlights around this future funding.

Read more about the Treasury pledge here.

The SNP MSP seeks more information on challenges faced by the sector.

Ms Gardner says the government has been increasing funding for colleges in the last three years but this has only been enough to cover pay harmonisation.

Three colleges are facing particular challenges and rural colleges are also struggling more than those in urban areas, she adds.

SNP MSP Colin Beattie says this report seems remarkably like the previous one, with the same challenges highlighted.

It would be quite surprising if we say a massive shift from one year to another, accepts Ms Gardner.

Mr Beattie expresses concern that income from sources other than the SFC has reduced.

The auditor general confirms that is the case, adding colleges are finding it harder to generate income from other ways, perhaps because pressures in finances are making it harder to follow up on opportunities.

Committee convener Jenny Marra says students who have been in care have the lowest attainment rates and these have fallen.

Ms Gardner agrees this dipped slightly in the latest figures.

Ms Marra asks if colleges are finding it more difficult to find additional support due to the squeeze on funding.

Mr Macpherson says there is no evidence of that but agrees college finances have been squeezed.

Labour MSP David Stewart asks why the target of getting 17.4% of college students from the 10% most disadvantaged areas is not being met.

Ms Gardner says colleges are doing a lot to try meet the target, but it will be hard to meet the target of 20% by 2021.

The demographic picture in Scotland means there are fewer young people to fill places, she explains.

The auditor general also points out there are more students going to university.

Mark MacPherson from Audit Scotland cites practical steps colleges are taking, like assisting students with travel costs.

Mr Stewart wonders why the situation has going backwards, to which Ms Gardner replies the picture is not clear.

Image source, Getty Images

The financial challenges facing Scotland's colleges are intensifying, according to the public spending watchdog.

Audit Scotland says most colleges are forecasting deficits in the next five years.

The Scottish government says it has invested heavily in colleges.

Last week colleges warned that an improved pay offer to settle an industrial dispute would need to be paid for by cuts and savings.

The watchdog said an increase in government funding to colleges would cover only the costs of making staff pay and conditions consistent across the sector.

Read more.

Caroline Gardner, the Auditor General for Scotland, says today's report provides an overview of college finances and performance of students.

There was a slight improvement in the financial picture but colleges face challenges, Ms Gardner says.

The auditor general says the gap between income and expenditure is widening and colleges must improve financial planning.

The Scottish government capital funding falls short of what is required for maintaining the college estate, says Ms Gardner.

She calls for the Scottish Funding Council to do more.

The committee is hearing from:

• Caroline Gardner, the Auditor General for Scotland
• Mark MacPherson from Audit Scotland
• Mark McCabe, also from Audit Scotland

The Public Audit and Post-legislative Scrutiny Committee is considering the recent Auditor General report on Scotland's colleges, external.

MSPs will hear from the auditor general herself, as well as Audit Scotland.

Read the committee papers here., external

Image source, bbc

Welcome to Holyrood Live, here's what we're covering on Thursday 13 June 20190.

• The public audit committee focuses on colleges

• General Questions

• First Minister's Questions

• World Environment Day 2019: Member’s debate

• Scottish Parliamentary Corporate Body Questions

• Portfolio Questions: Government Business and Constitutional Relations

• Disclosure (Scotland) Bill: Ministerial Statement

• Restricted Roads (20 mph Speed Limit) (Scotland) Bill: Stage 1 Debate