Committee calls for more robust investigations into Departmental fraud allegations
7 May 2014 02:37 PM
The Assembly's
Public Accounts Committee has today released two reports, published jointly, looking at the way
investigations into the Roads Service and Northern Ireland Water were carried
out.
The Committee found that there
were serious failings in both the investigations, which were carried out
internally by the Department for Regional Development and Northern Ireland
Water.
Chairperson of the Committee,
Michaela Boyle MLA said: "There were serious failings in both of these
investigations. In the case of the whistleblower's allegations against
Roads Service staff on the purchasing of road signs, we found that it was a
shoddy and incompetent investigation. It is hard to avoid the impression that
the Department did not have the appetite to get to the
truth."
The Committee examined
whistleblower allegations that favouritism had been shown to another contractor
over the purchase of road signs and that the way the tenders were evaluated
left the Department open to perceptions of partiality.
Chairperson Boyle said: "We
were concerned that there was an intolerable delay in investigating the
allegations. We were also shocked that over a period of several years, some
orders which should have been given to the whistleblower's firm were given
to his main competitor, and found it hard to avoid the conclusion that
something other than simple error was at play."
"The Committee admires the
whistleblower's dogged determination, over many years, to get to the truth,
despite the stress that it has caused him, his family and
employees."
In the second Report, concerning a suspected fraud in NI Water in respect of
the way invoices for services were charged and paid for, the Committee found
that the investigation was seriously flawed. It found that the investigation
did not dig deeply enough and senior management were too quick to close down
the investigation based on inadequate and incomplete evidence.
Chairperson Boyle said:
"Both of these cases point to fundamental weaknesses in fraud
investigation practice. These deficiencies can only be addressed by ensuring
investigations are led by professional investigators with an understanding of
relevant laws.
"The poor quality of these
investigations supports the case for establishing a single public sector fraud
investigation service."
Notes to
Editors:
- In 2005, a whistleblower made
allegations against Roads Service staff involved in the procurement of road
signs. An investigation by Department for Regional Development internal
auditors reported in January 2010 that it had found no evidence of impropriety
or of staff deliberately showing favouritism to a particular
contractor.
- The NI Water report concerns an
investigation into a case of ‘invoice slicing’ where an NI Water
employee was found to have instructed a contractor to limit the value of
invoices submitted for payment to below £20,000. Limiting the value of
invoices in this way is regarded as an indicator of fraud. An internal
investigation found no evidence of fraud but did find a number of serious
weaknesses in management of the contract. This included NI Water’s
payment of £111,000 to the contractor to meet the cost of 12,000 abortive
visits to customers caused by errors in NI Water’s instructions to the
contractor.
- The Committee identified a
number of weaknesses in the NI Water internal investigation including: the use
of inexperienced investigators who had not received specialist fraud
investigation training; failing to consult PSNI; and not investigating all
aspects of the suspected fraud, as required under NI Water’s fraud
policy.