The Canberra Institute of Technology had "no simple or cost-free option available" after the employment relationship with its former chief executive broke down, the institute's board chair says.
Tom Rogers told a parliamentary inquiry the board had to choose between continuing a complex employment and legal process of uncertain duration, cost and outcome, or achieving an immediate and certain resolution.
Dr Margot McNeill resigned from the institute earlier this month and received a payout from the public TAFE college.
"The monetary payment to be made to Dr McNeill of $445,250 was agreed after considering a range of legal rights and entitlements arising from the breakdown in the employment relationship between CIT and Dr McNeill," Mr Rogers' letter to the budget estimates committee said.
"Navigating this breakdown was challenging, complex and required consideration of a number of, at times, competing factors involving personal, legal and commercial issues. The amount is inclusive of $36,690.27 (taxable gross) in leave entitlements."
The budget estimates committee on Friday said the Canberra Institute of Technology needed to cut its spending on executive staff and put more funding back into teaching and courses.
The Legislative Assembly's budget estimates committee recommended the institute reduce its spending on executive staff and prioritise funding for teaching staff and program delivery.
The institute has announced it needed to cut at least 10 per cent from its budget to reach financial sustainability but courses would not be lost as part of the savings program.
The committee also signalled it was concerned by a payout made to Dr McNeill and $358,000 in staff travel costs in 2025-26 while some courses had been cancelled.
The committee had said it was "concerned about the unusual circumstances of the payout to the former CEO upon their resignation, the amount of which was more than one year's salary".
"The committee recommends that the ACT government clarify its involvement in, and provide a justification for, the payout to the former Canberra Institute of Technology chief executive officer on their resignation," the committee's report said.
The government has launched a review of the institute's governance that "will draw on advice from experts in governance and vocational education and training" and will probably be finished next year.
The estimates committee was told the review would examine existing models across public vocational education and training providers and government entities to best consider the options for the ACT.
Chief Minister Andrew Barr has said he believed in combining the institute with the University of Canberra, a move backed by the university's vice-chancellor, Bill Shorten.
The Chief Minister said there was now a chance to look at the issue through fresh eyes and bring a 2026-27 perspective rather than revisiting what happened 15 years ago.
"The concept of a dual-sector institution is one that operates successfully in many parts of Australia. So there's no reason why it wouldn't work well here," Mr Barr said last week.
The budget estimates inquiry hearings extensively canvassed issues at the Canberra Institute of Technology, including the future of its campuses, course offerings and budget.
The number of full-time non-teaching staff positions at Canberra Institute of Technology increased by more than 25 per cent in the past decade, information provided to the budget estimates inquiry showed.
In 2026, the institute had 10 full-time equivalent executive positions, up from 3.54 a decade ago. A 2023 review of the organisation found a lack of executive oversight, which led to jobs being created.
"The committee is concerned about significant expenditure amounts undertaken by CIT, whilst program delivery, such as 11-12 ATAR language courses (which were offered by the commercial training arm CIT Solutions), are no longer being offered," the committee's report said.
The inquiry also said the institute needed to identify specialist programs to be offered at its Tuggeranong and Gungahlin campuses.
The CIT spent $165.1 million on operational expenses in 2025, which was $10.1 million over budget.
The ACT government provided a top-up payment of $8.08 million in 2026 to "address cost pressures arising from a decline in commercial and international student revenue, increased employee expenditure and lower than expected commercial revenue".
