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Committee calls for more robust investigations into Departmental fraud allegations

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:
  1. 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.
  2. 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.
  3. 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.
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