Broadband project grossly mishandled, says Committee

The Assembly's Public Accounts Committee (PAC) has today issued a highly critical report of the handling of a cross-border broadband project delivered by a private company, Bytel Networks Ltd. The report is the result of an examination carried out by the Committee. A report by the Committee of Public Accounts of Dáil Éireann will also be published today arising from its examination of the Bytel project.

The project was funded by the Special EU Programmes Body (SEUPB) and supervised by the Department of Enterprise, Trade and Investment (DETI) in Northern Ireland and by the Department of Communications, Energy and Natural Resources (DCENR) in the Republic of Ireland.

Bytel Networks Ltd received grant funding of €4.3million between December 2004 and December 2005 when it incurred eligible expenditure of just €0.9million. A subsequent in-depth review of the project concluded that 97% of the grant should not have been paid.

Chairperson of the Public Accounts Committee, Michaela Boyle MLA said: "The Committee found that DETI's handling of the Bytel Project was completely unacceptable. We were particularly shocked to find that the Department agreed to fund €1.3m of expenditure for equipment that was likely to have cost only €30,000 and, in any event, was never used in the project.

"Instead of properly examining grant claims to ensure they were appropriate and monies used properly, DETI were more concerned with internal pressures to meet grant expenditure targets. The Committee has concluded that this was a fundamental failure on the part of DETI to meet its responsibilities."

The Committee also found that the investigations into what went wrong with the oversight of the project were completely inadequate, unacceptably delayed and did not go nearly far enough. Even at this stage, there has been no investigation leading to criminal proceedings.

Ms Boyle concluded: "The appalling mismanagement of this project led to it delivering very poor value for money. Because of the financial irregularities, EU funding was withdrawn. Not only was DETI required to fund €2m from its own budget but also €2m of available EU funding was lost from the Government budget. The Committee finds it very hard to believe that no one within the Department has faced any disciplinary action for the many serious shortcomings in this project.

"This is not the first time that this Committee has found poor management has cost the Government vast sums of money. While we have been assured that management systems have been improved, we cannot afford, in this financial climate, to lose funding in this way.

"We are calling on the Department, and indeed, all Government and non-governmental bodies, to implement rigorous systems to ensure that this cannot happen again and that those responsible are held accountable."

ENDS

Notes to Editors:
1. The failings are similar to those reported by the Committee in 2012 in relation to the Bioscience and Technology Institute. This was another DETI project from around the same time as the Bytel project. The Committee is very concerned that poor project management and disregard for value for money appear to have been endemic within the Department at that time.

2. The Committee notes the assurances from both DETI and SEUPB that improvements in systems and processes in recent years should substantially reduce the risk of similar failings in future.

3. The Committee considers that a rigorous, independent PACE investigation is needed.

4. The failure to re-appraise the project when it changed significantly was a fundamental shortcoming, which contributed significantly to the problems, which followed.

5. The Report found that over €2 million of grant was paid for the final claim based on a single-page statement from Bytel that contained no substantive information to justify the payment. In the Committee's view, this claim had no validity whatsoever.

6. The Committee is gravely concerned that DETI withheld vital information about the project from key stakeholders, including SEUPB and DCENR, for far too long.

7. The report of the Public Accounts Committee of the House of the Oireachtas will be launched on the same day, 1 July 2015, and it can be accessed at http://www.oireachtas.ie/parliament/oireachtasbusiness/committees_list/public-accounts/