11 June 2009 | Martha McKenzie-Minifie
Highlands and Islands Enterprise (HIE) is shoring up its purchasing processes in response to an audit of its contracts with business consultancy Rocket Science.
The audit came about because HIE and Rocket Science are both chaired by the same person, William Roe. It was carried out by the agency's internal audit team and overseen by government body Audit Scotland.
The report found no evidence that any of HIE's decisions to use Rocket Science had been influenced by Roe's role in either organisation.
However, Roe is resigning as chairman of Rocket Science, with effect from 30 June, to "prevent any possible perception of a conflict of interest".
The audit found that a HIE "notification procedure" designed to provide an overview of the HIE's relationship with Roe's business interests "did not fully operate as intended".
It also said Roe's register of interests did not include reference to seven of the 21 HIE projects Rocket Science worked on between 1 September 2004 and 31 March 2009. Four related to financial year 2004-05, Roe's first year as chair of HIE, and three to 2008-09. The report noted that the registration process for the final six months of 2008-09 had not been concluded at the time the review was carried out.
HIE chief executive Sandy Cumming ordered 10 actions in response to the audit, including the introduction of new prior approval processes for any transaction in which its chair, a board director, or any member of the senior staff has an interest.
Cumming said HIE's procurement team would also set up and monitor a new contracts register. In addition, all HIE negotiated contracts worth more than £10,000 would require chief executive sign-off. "HIE aspires to be an exemplar of best practice in all the things it does, and the procurement of consultancy and other contracts should be no exception," said Cumming.
"I am confident the procedures HIE is putting in place as a result of this review will address the areas of weakness in the present system and ensure greater clarity and accountability from now on."