NI Water board members ousted for purchasing failures

17 March 2010

17 March 2010 | Rima Evans

Four members of the Northern Ireland Water (NIW) board have been sacked for failures in procurement governance around contract awards – and there may be more dismissals to come, a minister has warned.

NIW chairman Chris Mellor and three other non-executive directors – John Ballard, Ruth Thompson and Declan Gormley – have been dismissed following a “serious breakdown in the governance and control framework” of contract approvals.

The board launched an internal review after NIW chief executive Laurence MacKenzie became aware of a breach in the organisation’s licence and governance arrangements. This involved a single tender action – where a contractor was appointed without any competitive process – for work worth nearly a quarter of a million pounds.

The independent report commissioned by the Department for Regional Development and NIW, which reviewed procurement governance issues, analysed the failures and made recommendations to strengthen processes and ensure proper compliance. 

Breaches included failures to put contracts out to competitive tender, instances of failing to attain appropriate internal approval, as well as deals running on extensions outside the permitted contract terms.

Although the investigation is ongoing, the review team said “a finding of systemic failure in operational procurement would be justified”.

While further investigations take place, regional development minister Conor Murphy told the NI assembly he was considering the positions of two more board members. They are Ronan Larkin, the finance director and George Butler, director of asset management.

The report’s recommendations for improvement of procurement governance issues included: ensuring there is a transparent governance system in relation to procurement processes; possibly creating a dedicated compliance officer; ensuring procurement compliance is included as a standing item on the board agenda; and training for the senior management team in areas such as the creation of business cases and tendering activity.

Murphy said: “I intend to take firm action to fully address the recommendations.”
 MacKenzie added: “My commitment to ensuring that appropriate financial controls are in place within NI Water is absolute.”

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