PRESS RELEASE

15 May 2008

PR/16/07/08

NI EVENTS COMPANY COST DCAL OVER £1.2 MILLION

Government departments need to ensure a strong culture of accountability in their relationship with arms length bodies. That’s the message from a NI Assembly’s Public Accounts Committee Report, published today, on the Governance of Arm’s Length Bodies.

The Report examines a number of cases in which governance failures in departments and their arm’s length bodies have impacted on public confidence as well as the delivery of public services and value for money.

Committee Chairperson John O’Dowd, MLA said:
“This Report highlights the need for departments to ensure that there is a strong culture of accountability with their arm’s length bodies and that good governance is delivered in practice.

“The Committee welcomes the Report’s recommendation that there is need to develop the skills of boards of arm’s length bodies, through effective training and the appointment of independent non-executive members”.

The Report also contained an early assessment of the recent developments into the investigation of the DCAL sponsored Northern Ireland Events Company. Speaking about the Report’s appraisal, John O’Dowd commented:

“The Committee was told that the Events Company’s Chief Executive operated well beyond the control framework specified for the Company, breaching the delegated limits which she had been set; and, in a small number of cases, she treated funding in the most cavalier fashion, with even the most elementary aspects of financial management set aside. This has cost DCAL at least £1.2 million.

“The Committee notes that there were numerous warning signals1 which indicated that DCAL’s sponsorship of the Events Company was inherently risky and therefore requireda greater degree of oversight. It is therefore difficult to understand how the Events Company board, if it had full insight of its role and responsibilities, could have missed the exceptional nature of the spending commitments being entered into.

“At the same time, the Committee welcomes the prompt, decisive and transparent action reported by the Accounting Officer once the problems in the Events Company were discovered.

“The Committee views this as one of the most serious failures of controls in an arm’s length body in recent years. The Committee therefore intends to revisit it when the investigatory process is complete.

“It is essential that the lessons learnt from this case are made available as soon as possible to the wider public sector to avoid future governance failures of this nature.”

Notes to Editors

• Standing Orders under Section 60(3) of the Northern Ireland Act 1998 have provided for the establishment of the Public Accounts Committee (the Committee). The main statutory function of the Committee is to consider accounts and the reports by the Comptroller and Auditor General for Northern Ireland (C&AG) laid before the Northern Ireland Assembly.
• The C&AG is head of the Northern Ireland Audit Office (NIAO) and is empowered to investigate any area of expenditure and has a statutory right of access to all files and papers in Departments and public bodies.

The PAC Committee members are:-
Mr John O’Dowd, (SF) Chairperson
Mr Roy Beggs, (UUP) Deputy Chairperson
Mr Trevor Lunn ( Alliance)
Mr Jonathan Craig (DUP)
Mr Simon Hamilton (DUP)
Mr David Hilditch (DUP)
Mr Ian McCrea (DUP) *
Ms Dawn Purvis (PUP)
Mr Mitchel McLaughlin (SF)
Mr Thomas Burns (SDLP)**
Mr John Dallat (SDLP)

* Mr Ian McCrea (DUP) replaced Mr Mickey Brady (SF) on 21 January 2008
** Mr Thomas Burns (SDLP) replaced Mr Patsy McGlone (SDLP) on 4 March 2008

Media enquiries to:
Debra Savage,
Information Office, Parliament Buildings, Belfast. BT4 3XX
Tel. 028 90521405 Mobile 07920 864221
Email: debra.savage@niassembly.gov.uk

Website archive.niassembly.gov.uk

1. Governance concerns had been raised previously by the Public Accounts Committee around these types of activities – in 1997, about the Events Company’s predecessor body Positively Belfast; and again in 2002 about the Stormont Concerts, which were sponsored by the Events Company.

The Company was in a transitional phase and expected to move from DCAL to the Northern Ireland Tourist Board under the Reform of Public Administration.

Several directors of the board had retired, which put a great deal of pressure on the remaining directors.

Two Internal Audit reports had given only limited assurances to DCAL and a later report, in 2007, indicated that a number of shortcomings remained in the Company.

A very serious complaint was made against the Events Company in its distribution and oversight of one particular grant.