HE lied, wasted precious college resources and even ordered staff and pupils to carry out work for companies he was linked to while running up more than £300,000 worth of debt.

These are the damning criticisms of former Applemore College principal Frank Callaghan levelled at him in a confidential audit report that has only just been released two years after his retirement.

Although the report fails to show conclusively that Mr Callaghan made significant personal gains from his actions, it did find that he spent money with two companies he had close ties to without the college getting much in return.

He had also failed to properly disclose his links with the two firms, Digital Media Interactive Ltd of which he was a director and shareholder, and Solent Educational Ltd whose bosses he had formerly been in business with, despite spending tens of thousands of pounds a year on their services.

It also criticised him for awarding pay increases through favouritism, failing to draw up proper business plans for the investments he made, and using college resources to pay for marketing mailshots for DMI Ltd.

Mr Callaghan was also found to have used pupils at the college to help put together the mailshots, even taking them out of class to do so, and to have used admin staff for the same purpose.

When college governors ordered this to stop Mr Callaghan, who the report also claimed could be bullish and dictatorial, over-ruled them and demanded the work continue.

He had also overruled requests by the college's Governors not to spend anymore money except on consumables, and had placed a further order with Solent Educational Ltd for £10,000 just months before he left.

The report into Mr Callaghan's affairs was only handed over after a request to Hampshire County Council under the Freedom of Information Act.

It was drawn up following a special request from Hampshire's Local Education Authority in 2005, who said they were becoming increasingly concerned that corporate governance at the college in Dibden Purlieu had collapsed.

These fears had been prompted by the resignation of the college's chairman of governors in June 2005, who said his relationship with senior managers at the college had broken down to such an extent that he was no longer able to govern at the institute.

Accordingly Hampshire County Council's Audit Services department launched the full-scale enquiry, despite Mr Callaghan subsequently retiring and a new principal having been appointed in September 2005.

Commenting on the findings, the county council said it had no intention of passing the audit report to the police as they did not believe there was sufficient evidence criminal offences had been committed by Mr Callaghan.

Neither did they feel there was any way to recoup the money that was mis-spent during his final year at the college - where he had been for more than 20 years.

A joint statement issued by the current chairman of the governors, Sylvia Barnes and new principal Matthew Longden, simply said the financial deficit the college had when Mr Callaghan retired would be cleared by next year.

They also said the college had now reached the national standard for financial management and that the report was by no means a reflection of the college's current position - a point clearly shown by a recent Ofsted inspection which praised the college and its pupils.

Yesterday Mr Callaghan was not at his semi-detached home in East Boldre when the Daily Echo called, but a posting on his own website states: "I accept that the last 12 months saw a decline in fortunes. I accept some of this as my fault, and even if I was not directly responsible, as principal I accept total responsibility for all that happened in my college."

To read the full audit report: click here