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PAC Chair Welcomes Report on Suspected Contract Fraud (in BELB)

29 April, 2009

Chairperson of the powerful Public Accounts Committee, Sinn Féin MLA Paul Maskey (West Belfast) has welcomed the Audit Office report on the Investigation of Suspected Contract Fraud (in BELB) which is intended to highlight the issues involved in preventing and investigating suspected fraud in public sector contracts and to point out what should be best practice.    Mr Maskey said:   “This report will be taken by the Public Accounts Committee today 29th May in Senate Chamber, Parliament Buildings. “The report considers cases in the BELB relating to property maintenance, an area which has long been regarded as carrying a high risk of fraud, corruption and other irregularity with particular guidance on the controls necessary to minimise the risk of fraud in building services.  “The report highlights a number of issues that we as a Committee will want to investigate further, areas such as allegations of Price-Fixing and Collusion in Schools Maintenance Expenditure.   Mr Maskey concluded:   “The key challenge in any tendering process is to ensure that there is a genuine competition between contractors,  that contracts are fairly awarded and that value for money has been achieved. We will want to know why and how each of the bodies involved fell short in the handling of the contracts and what lessons they have learned for the future.   “We will also want to ensure that both departments have pursued these cases to the full, given that we have always promoted zero tolerance to fraud.” Ends     NOTES TO EDITORS:   Whistleblower allegations a.       Price fixing cartel in operation in BELB Property Services b.      BELB officers accepted inducements to award schools’ maintenance work to favoured contractors. Findings from BELB and DENI investigations:            2 contractors named by the whistleblower were consistently awarded the majority of maintenance work.            evidence of contractor malpractice (and possibly fraud) and, consistent overcharging (by one of the contractors) – not pursued by PSNI as  it was not considered strong enough to support criminal charges.            no evidence of payments to Board officers, but did determine “gross misconduct” by 2 officers for favouring one contractor            both officers disciplined for misconduct ( not “gross” misconduct, which amounted to a formal written warning for misconduct removed from their file after 1 year - para 2.30).            2.         Fraud Investigation into Library Building Works               Relates to disability access work to the value of £80k, which had been paid for but had never been started on Whitewell and Oldpark libraries.                The Board is proceeding to recover the outstanding balance of £41,000 from the contractors.               The maintenance officer who authorised payments was suspended on full pay from August 2005 until August 2007 when his employment was terminated on ill health grounds.                BELB investigation team identified possible criminal charges but, again, the absence of any documentation undermined the prospect of a successful prosecution.               DCAL carried out further investigation on other library works; has identified work which was either not carried out or was not carried out to the required standard to the value of £110,000 – Board seeking to recover this.

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