Published: Monday, 6th July, 2009 1:46pm

Public Accounts committee says hard to prove no fraud at College

£2.5 million of maintenance expenditure was awarded to a building firm over a five year period by Fermanagh College without going through proper processes, the Northern Ireland Public Accounts Committee (PAC) has revealed in a report released today (Thursday).

The report on the review of financial management in the further education sector in Northern Ireland states that the Department of Employment and Learning (DEL) examination had ruled out fraud and that the problem had simply been 'poor practice, mismanagement and a lackadaisical approach to the procurement process which was not tolerable'.

But the PAC believes that the lack of proper procedure makes it hard to prove fraud did not occur. 'Serious concerns were raised in relation to procurement activity.

'The standards of documentation retained by the College fell far short of what would be required in the award of tenders. There was practically no documentation for review. Some £2.5 million of maintenance expenditure had been awarded to one local building firm over a five year period.

'The Committee was interested to note that even the Department"s own staff, who had reviewed the maintenance contracts, had failed to identify anything wrong. The Committee is concerned that large amounts of public money had been paid out without following basic procurement procedures and which were not supported by adequate supporting documentation.

'The Committee is of the view that both the failure to apply proper procedures and the lack of sufficient supporting documentation make it difficult to prove that fraud had not occurred,' says the report.

The report says that one of the underlying problems was that the senior management team was 'out of its depth' and did not have the necessary leadership and management skills to deal appropriately with the problems at the College.

'The Committee is astonished at the level of failure. The senior management team was dealing with a budget of about £10 million. It was therefore not like running a corner shop. Yet, there was no clear leadership, no decisions or action points were recorded, and there was no clear sense of there being a senior management team at the college. Significant weaknesses in financial management were not resolved.

'The Committee considered that the Department should have been aware of the extent of these problems much earlier than was the case,' the report notes.

A series of nine reports on the College, before it was re-organised and the new South West College was founded, identified fundamental breaches of public accountability and basic financial management standards. As a result, the college was required to repay more than £1 million of improperly claimed funding.

Speaking about Fermanagh College, Mr Paul Maskey, PAC Chairperson, said: 'The Committee was astonished at the level of failure in Fermanagh College. We found that one of the underlying problems was that the senior management team did not have the necessary leadership and management skills to deal appropriately with the problems at the college.

'The senior management team was dealing with a budget of about £10 million, yet there was no clear leadership or sense of strategic direction at the college. These issues were raised in 1999 yet were not sufficiently remedied in subsequent years.

'What is even more disturbing is that lessons seem not to have been learned by the Department. In the new Belfast Metropolitan College, there are continuing financial problems and the Department for Employment and Learning was unable to give even a basic explanation of what has gone wrong.

'We are alarmed that, despite the Department"s claims about stronger governance arrangements for the six new colleges, the same problems are recurring.

'This situation should and must be resolved.'

Fermanagh College was merged with East Tyrone and Omagh to form the new South West College, which is under new management.