Report on The Northern Ireland Events Company
Session: Session currently unavailable
Date: 24 February 2016
Reference: NIA 308/11-16
Mandate Number: 2011-2016 Thrity-Fourth Report
The Chief Executive (Janice McAleese) of the Northern Ireland Events Company (NIEC) resigned in May 2007 and in September 2007 the acting Chief Executive (Jasper Perry) notified the Department of Culture, Arts and Leisure (DCAL), its sponsor Department, that NIEC had accumulated an estimated £1.2 million financial deficit.
In November 2008, Company Inspectors (the Inspectors) were appointed by the Department of Enterprise, Trade and Investment (DETI) to investigate and report on the affairs of NIEC. The Inspectors completed their investigation in March 2014 and concluded that of a total deficit of £1.45 million, £1.3 million could be attributed to overspending on events promoted by NIEC between 2005 and 2007; the majority of this related to Motocross and Supermoto events.
The Committee was informed that the total cost of NIEC's financial deficit was in the region of £1.6 million. These costs represent the amounts paid to outstanding creditors and administration costs incurred as a result of the winding up of NIEC.
The Public Accounts Committee was appalled at the level of mismanagement and impropriety associated with the Northern Ireland Events Company. The Committee believes that the demise of the NIEC "is the biggest scandal that has yet arisen in the history of the Committee under devolution, the level of scandal involved is completely shocking".
Mr Paul Sweeney, the DCAL Permanent Secretary at the time the financial deficit emerged in 2007 and Mr Mervyn Elder, the NIEC Chairman, told the Committee that they accepted full responsibility for what happened.
DCAL in its opening statement informed the Committee that the NIEC saga represented a comprehensive failure in a triangle of relationships. It was a comprehensive failure on the part of DCAL to fully discharge its responsibilities in terms of sponsorship; it was a failure on the part of the NIEC Board to provide effective leadership, direction, support and guidance to the organisation; and it was a failure on the part of Janice McAleese, the Chief Executive of the company, to ensure that public funds were properly managed and safeguarded. The Committee agrees with this analysis. No one has emerged with any credit but there are important lessons for all Chief Executives, Boards and Departmental Accounting Officers.
The Company Inspection took five and a half years and cost £1.24 million. It has taken DETI a further 18 months to issue pre-proceeding letters in the Director Disqualification process. The Committee are very disappointed that this process has taken – and continues to take – so long to reach a conclusion.
This debacle does not make comfortable reading for the public service in Northern Ireland – this may have been a small company but the scale of deception was massive. Unfortunately it is the taxpayer who has ultimately footed the £1.6 million bill to pay the outstanding creditors and associated fees and costs.
The Committee's report, together with the Comptroller and Auditor General's report, should be compulsory reading for all public sector management boards, Chief Executives and Accounting Officers. This situation must never happen again and public sector officials and board members should be constantly alert to the important lessons that can be learned from the failure of the Northern Ireland Events Company.