Chief executive’s conflicts of interest revealed by audit report

Paul Snell is managing editor at Supply Management
5 October 2015

The former chief executive of the Northern Ireland Events Company (NIEC) did not declare a personal relationship she had with a contractor which was awarded a deal to design and build a new motocross track.

There was also no evidence a competitive tender had been carried out for the £120,000 work, or that a formal contract had been signed.

These revelations were disclosed in a report by the Northern Ireland Audit Office into the “complete breakdown of financial control” at NIEC, which was set up to support international events in the country in 1997. The study said a number of conflicts of interest were poorly handled and covered up, "escalating finanial losses".

Janice McAleese, who resigned in 2007, was also accused of covering up financial losses at the company with misleading and fabricated documents and manipulating the budgetary status, in the report.

NIEC built up a £1.5 million deficit – primarily through overspending on motocross events between 2005 and 2007 – which ultimately had to be met by the Department of Culture, Arts and Leisure (DCAL). NIEC received more than £18 million in grants up to 2008.

Kevin Donnelly, the comptroller and auditor general for Northern Ireland, said of McAleese: “I am not aware of any other accounting officer failing so comprehensively to uphold the principles of conduct in public life.”

The report also said McAleese had exposed NIEC to financial risk by entering into contracts. Deals signed by NIEC included a catering paid £130,000 where the most expensive provider had been selected without an explanation of the rationale.

The report was also critical of the NIEC board’s failure to provide adequate oversight, and was “almost completely reliant on the information presented to it by the chief executive”. The DCAL, whose role was to provide funding and performance monitoring, were also blamed for a “light touch” approach to scrutiny.

The report did acknowledge DCAL had committed to improving its arrangements for sponsorship and governance of arms length bodies.

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