PAC Report Highlights Suspected Fraud in BELB

Session: 2009/2010

Date: 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

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