The Derry regeneration company Ilex has been slated for some of its financial dealings in a new report from the Public Accounts Committee.
And local SDLP MLA Colum Eastwood says the report makes clear what amounts to “a massive failure in the trust given to Ilex by the people of Derry”.
The report, issued yesterday Wednesday by the PAC, says the committee has serious concerns over unauthorised spending at Ilex, both the extent of this spending and the lack of control of it. Payments to two former key figures in Ilex have come under the spotlight - £30,000 given to former chairman Sir Roy McNulty for tax and travel expenses, and unauthorised bonuses for former chief executive Bill Kirk.
Current Ilex boss Aideen McGinley has already apologised publicly after auditors revealed that the organisation had spent more than £400k without proper government approval.
Reacting to the PAC report, a spokeswoman for Ilex told the ‘Journal’ that Ilex welcomes it and is considering its recommendations in full. She said it’s not appropriate to comment further at this time.
Mr Eastwood said the report is official recognition of the breakdown of financial governance and oversight of Ilex, with unapproved spending as well as irregular tax liabilities and travel expenses. There was also a deficit in the financial information being shared with Ilex’s governing board.
But he added that the big question now was whether Ilex could deliver on two key sites - Ebrington and Fort George.
“This is a question which can’t be allowed to go unanswered for much longer. The Clipper festivities this week have shown the abundance of potential given by the invaluable resource of our river. Ebrington and Fort George should mark the pinnacle of our ambitions for prime riverfront locations to be used in our economic and cultural interest’. Full delivery on these two sites is the main concern for Derry’s people.”
The PAC report says tighter governance is needed over the spending of taxpayers’ money at Ilex.
“The Committee is very concerned at the extent of expenditure that had been incurred by Ilex without proper approvals from sponsor departments or, in some cases, without business plans having been prepared prior to the spending taking place. This reflects a lack of regard for well-established rules governing spending on projects.”
The report says the committee is disappointed by “by the case where a firm agreed a price of £64,000 for consultancy on the peace bridge but then subsequently had its contract extended for a project resulting in revised costs of £479,000.
“The fact that the extension of these costs was not approved by sponsor departments is not acceptable. The extension of the contract without going back to the market also means that it is impossible to demonstrate that value for money has been achieved.”
The committee recommends Ilex comes under the control of one government body instead of the current arrangement by which the organisation is funded by both the Office of the First and deputy First Minister and the Department of Social Development.
It says Government departments also should re-examine current arrangements to ensure “that arms-length bodies, such as Ilex, are given a clear mandate in respect of their responsibilities, including ensuring value for money”.
It recommends that “non-executive Board members should have details of who is responsible for paying any tax liabilities formally agreed before appointment and included in the contract of employment.”