Northern Ireland Water slammed for poor procurement practice

Northern Ireland’s Public Accounts Committee has called for a “root and branch” review of eight Centres of Procurement Expertise after it discovered purchasing failings at Northern Ireland Water (NIW), in a report published recently.

The committee said NIW’s central procurement unit, “which should have been championing best practice, did not itself apply basic financial controls” and should not have been given Centre of Procurement Expertise (CoPE) status.

“Between December 2005 and August 2010, procurement failures totalled AUD$73.8 million,” Committee chairperson Paul Maskey said.

The PAC found it was authorising contract extensions that required competitive tendering, signing award letters after contracts had begun and was heavily reliant on consultants, who were, in turn, signing off unapproved extensions. In one example a three-year deal was extended by a further eight years, without approval, during which an additional AUD$16 million of business was awarded. The report also said NIW made use of confidentiality clauses to keep embarrassing transactions secret.

Between April 2007 and September 2009, various internal and external reviews were carried out on procurement in NI Water but the PAC found these failed to identify the extent of the procurement problems. It said a combination of factors led to the failures, including “a deeply embedded culture that made it acceptable to bypass rules, weak financial controls and wholly deficient management information systems”.

“There are indications that managers at all levels broke the rules, in what they regarded to be the best interests of NI Water, to speed up the process when appropriate authorisation [for contracts] would have caused significant delays,” the report said.

The committee has made a number of recommendations including the banning of confidentiality agreements in the public sector and giving contract audit greater prominence in all government departments and non-departmental public bodies. It added that governance arrangements were inadequate for a public body and it suggests they are revised to incorporate more oversight. It has also proposed that a review of all public sector procurement in the region be carried out.

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