PRESS RELEASE

30 JUNE 2008

PR/18/07/08

PAC CRITICAL OF FLAWED APPOINTMENTS PROCESS AT HOSPITALITY ASSOCIATION

A highly critical Public Accounts Committee report on the Hospitality Association of Northern Ireland (HANI), published today, condemns the way two departments—Employment and Learning and Culture, Arts and Leisure—managed both the financial control and public appointments processes.

The Committee concluded that the findings in the report stood out a s a lesson to the public sector in how not to manage a relationship with a third party organisation, how not to operate the public appointments process and how not to handle a major conflict of interest.

Committee Chairperson, Paul Maskey, MLA said, “This report contains an astonishing catalogue of shortcomings. In far too many respects, the two Departments involved got it wrong, showing poor judgment, slow responses, inadequate liaison and an unwillingness to sort out the problems. There were even situations where senior officials appeared to turn a ‘blind eye’ to behaviour that was manifestly improper.

“ The Committee is left with the impression that the public service in Northern Ireland has been more vulnerable to abuse than it should have been. This cannot be tolerated.”

The report identified that many of the failings took place in areas where a wealth of best practice guidance was available. Yet, time and time again, it was ignored. On more than one occasion, an opportunity to rectify the situation was missed, or went unheeded.

On the Departments’ financial management processes when working with HANI, Paul Maskey said, “It is scandalous that HANI misappropriated public funds. There are many third party organisations which provide much-needed public services and do so professionally and with absolute integrity. But there are also an unscrupulous few, seeking to ‘rip-off’ the taxpayer with false, inflated or ineligible claims for public funds.

“Departments are an important line in the defence against such attempts. They must be aware of the risks and maintain their vigilance at all times. A firm line must be taken in all cases of improper behaviour, to demonstrate that it will not be tolerated. Unfortunately, that was not done in this case.”

The evidence from the Commissioner for Public Appointments showed that that there have been many weaknesses in the public appointments system operating in Northern Ireland. A major shortcoming noted by the Committee was the apparent ‘a la carte’ approach taken by Departments in their application of the Commissioner’s guidelines.

Mr Maskey said, “The Committee is clearly concerned that there are systemic weaknesses in the public appointments system which has not yet been satisfactorily addressed. Due to a legacy of poor practice by Departments, the system lacks credibility.

“The Committee wants to make it absolutely clear that a continuing perception of cronyism is not compatible with the structures being established under devolution. There is an enormous challenge for the Senior Civil Service and the Committee expects it to act urgently to establish confidence in the system.”

ENDS

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 Report found that a former HANI employee was involved in a major conflict of interest issue in 2004 in the Events Company, a body sponsored by DCAL. While still a member of the Board, she tendered for, and won, a PR contract for a sporting event that was being supported by the Events Company, with a grant which accounted for 25% of the company’s annual budget.

The PAC Committee members are:

Mr Paul Maskey, (SF) Chairperson 2
Mr Roy Beggs, (UUP) Deputy Chairperson
Mr Trevor Lunn ( Alliance)
Mr Jonathan Craig (DUP)
Mr Simon Hamilton (DUP)
Mr David Hilditch (DUP)
Mr Jim Wells(DUP) 3,4,5
Ms Dawn Purvis (PUP)
Mr Mitchel McLaughlin (SF)
Mr Thomas Burns (SDLP) 1
Mr John Dallat (SDLP)

1 With effect from 04 March 2008 Mr Thomas Burns replaced Mr Patsy McGlone.
2 With effect from 20 May 2008 Mr Paul Maskey replaced Mr John O'Dowd.
3 With effect from 1 October 2007 Mr Mickey Brady replaced Mr Willie Clarke.
4 With effect from 21 January 2008 Mr Ian McCrea replaced Mr Mickey Brady.
5 With effect from Tuesday 27 May 08 Mr Jim Wells replaced Mr Ian McCrea.

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