Press Release

PAC Report Highlights Suspected Fraud in BELB

Session: 2009/2010

Date: Thursday, 10 September 2009

Reference: PAC/01/09/10

Poor value for money, conflict of interest and evidence of favouritism towards certain contractors are the shock findings in the latest NI Assembly’s Public Accounts Committee Report, released today.

The report, entitled ‘The Investigation of Suspected Contract Fraud [in the Belfast Education and Library Board (BELB)]’, found that building work that had not been started and work that had not completed to an acceptable standard were paid for by the Board.

Speaking at the launch of the report, Mr Paul Maskey MLA, Chairperson of the Committee, said : “This is one of the most worrying cases the Committee has come across. This public body failed to recognise the extent to which it was vulnerable to fraud and responded too slowly as evidence of malpractice accumulated over several years. We found that there was extensive evidence of a long-standing culture within BELB’s Property Services Unit that favoured certain contractors and had no regard for proper procurement procedures.

“In one case, a BELB maintenance officer was involved in the award of £64,000 worth of maintenance work to his uncle’s firm. Despite this being known by the employee’s supervisor and senior management, including the Chief Executive, the Board’s own instructions on dealing with conflicts of interest were ignored. In another case, a maintenance officer accepted a four-day junket to Italy arranged by a Northern Ireland supplier.”

Following an independent review commissioned by the Department into school maintenance procurement, three officers faced disciplinary charges. The Department’s expert in disciplinary matters concluded that the relationship of two of these officers with a contractor represented gross misconduct; this was later downgraded to misconduct, and warnings remained on their records for only a year. In the Committee’s view, the duration of these disciplinary measures did not reflect the seriousness of the offences.

Mr Maskey concluded: “The schools estate currently has a backlog of £200 million for maintenance work. Even if only a small proportion of this spend is fraudulent, very significant sums of public money are potentially lost. The crucial lessons learned about maintenance procurement in this report must be applied, not only in the education sector, but throughout the whole of the public sector.”

ENDS

Notes to Editors:
  1. The Report also found that the BELB paid £80,000 to contractors for disability access work in Whitewell and Oldpark libraries which was not carried out. It also found that the Board paid £110,000 for work in 14 other libraries which was either not completed or not carried out to the required standard. It was found that the officer involved in these cases was suspended but disciplinary proceedings halted when the officer retired on health grounds.
  2. Standing Orders under Section 60(3) of the Northern Ireland Act 1998 have provided for the establishment of the Public Accounts Committee (the Committee). The main statutory function of the Committee is to consider accounts and the reports by the Comptroller and Auditor General for Northern Ireland (C&AG) laid before the Northern Ireland Assembly.
  3. The C&AG is head of the Northern Ireland Audit Office (NIAO) and is empowered to investigate any area of expenditure and has a statutory right of access to all files and papers in Departments and public bodies.

The PAC Committee members are:-

Alliance

Mr Trevor Lunn

Democratic Unionist Party

Mr Jim Shannon 6


Mr Jonathan Craig


Mr George Robinson 7


Mr Jim Wells 3,4,5

Sinn Fein

Mr Paul Maskey (Chairperson) 2


Mr Mitchel McLaughlin

Social Democratic and Labour Party

Mr John Dallat
Mr Patsy McGlone 1,8

Ulster Unionist Party

Mr Roy Beggs (Deputy Chairperson)

Progressive Unionist Party

Ms Dawn Purvis

1 With effect from 04 March 2008 Mr Thomas Burns replaced Mr Patsy McGlone.
2 With effect from 20 May 2008 Mr Paul Maskey replaced Mr John O'Dowd.
3 With effect from 1 October 2007 Mr Mickey Brady replaced Mr Willie Clarke.
4 With effect from 21 January 2008 Mr Ian McCrea replaced Mr Mickey Brady.
5 With effect from Tuesday 27 May 08 Mr Jim Wells replaced Mr Ian McCrea.
6 With effect from Monday, 15 September 08 Mr Shannon replaced Mr David Hilditch.
7 With effect from Monday, 15 September 08 Mr Robinson replaced Mr Simon Hamilton.
8 With effect from 29 June 2009, Mr Patsy McGlone replaced Mr Thomas Burns.

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