Company boss to defend civil case over IT contracts

A 42-YEAR-OLD company director is to strongly defend an action taken against him by a state agency in relation to alleged collusion on contracts for supply of computer equipment and services.

Peter Grady and the company, IT Upgrade Ltd, registered at Mr Grady’s address at Roseberry, Newbridge, Co Kildare, are co-defendants in a civil case being taken by the National Educational Welfare Board against its own former information technology manager Neil Ryan.

None of the defendants has been identified to date by the board or by the Comptroller and Auditor General (C&AG) John Purcell, who revealed details of the matter in a special report last week.

It said that the IT manager at the time — Mr Ryan — and an IT supplier, apparently colluded in a deal which saw the board ending up with IT equipment worth almost €200,000 more than its actual needs in a two-year period from 2003 to 2005. Mr Purcell also revealed there was no evidence that IT services for which €271,000 was paid had actually been provided.

Mr Ryan was suspended by the board in August 2005 and resigned in March 2006. The board has put suitable financial and administrative controls in place to ensure the lapses which allowed the practices to take place can not happen again.

It is suing Mr Ryan, Mr Grady and IT Upgrade Ltd to recover the money lost arising from matters uncovered during its own investigations, for which it paid fees of €228,000 to outside consultants.

Mr Grady was not reachable for comment, but his legal representatives said he believes there is no case against him. They are planning to vigorously defend the action and also intend to bring an application to dismiss the proceedings against Mr Grady and the company.

Mr Ryan was employed by the board in 2003 and the only IT contract out of 122 awarded for which a tendering process was used up to mid-2005 related to an €85,000 deal for 70 desktop computers. It was awarded to IT Upgrade Ltd, which went on to secure contracts worth more than €900,000 with the board, worth almost two-thirds of all its IT spending in the period.

The C&AG’s report revealed examples of emails from the IT manager to the supplier, in which Mr Ryan suggested the prices which should be charged on invoices for equipment or services. Mr Purcell reported there was no evidence to suggest that other staff or suppliers took part in this kind of behaviour.

The civil proceedings were initiated in the High Court last March and are due for mention again next week. Mr Grady lodged affidavits in relation to the case in July and in September, while board chief executive Eddie Ward and a number of other parties have also lodged affidavits.

The affairs only came to light after an internal email to Mr Ryan and Mr Ward querying transactions with a supplier disappeared from Mr Ward’s inbox and the outbox of the official who sent it. It was retrieved from Mr Ward’s hand-held personal digital assistant (PDA), to which his emails were automatically transferred, and prompted a forensic investigation of all board electronic equipment which led to the discovery of the apparent collusion.