Board paid out £80,000 (€89,000) for undone library work

Anti-fraud controls were so poor in the Belfast Education and Library Board that it paid out £80,000 (€89,156) for work on two libraries which had not been carried out, a damning report revealed today.

The board was slated by the North's Auditor General John Dowdall for its failure to challenge potential criminal fraud by maintenance contractors and for undermining any criminal case that might have been mounted.

The Audit Office listed a host of failings by the BELB over the award of public service contracts.

Investigations into whistleblower allegations into price fixing and collusion in the award of contracts showed the board failed to develop and instil a strong anti-fraud culture and failed to adequately protect itself against the risk of fraud.

The report said: “Not only were controls weak, they were bypassed by middle managers; policy was not followed, and there was a lack of management oversight and review.

“Indeed the attitude seemed to be that maintenance ran itself and senior managers either did not understand or had little interest in the area.

“The BELB has attributed its problems to a culture in which contractors became overtly powerful.”

The proper checking of contractors’ invoices before payment and the physical inspection of maintenance work were key to the prevention and detection of fraud, said the report.

“These simple checks were, at best, ignored at the time in BELB, they must be implemented in future,” said the report.

Additionally an internal auditors’ report warning that most maintenance work was being awarded to a small ring of contractors – and a warning of a price fixing ring – were ignored.

The report said: “The NIAO (Northern Ireland Audit Office) considers that the BELB did not treat these warnings with the seriousness required and that the reference to a price-fixing ring merited further documented analysis.”

It added: “Records systems should have been analysed to identify patterns in the award of contracts and relationships between contractors and staff.”

Worryingly potential criminal conduct by contractors went unchallenged by board staff, undermining any future criminal cases, said the report.

Poor controls meant that staff who were awarding contracts had been recruited from firms to which the board was giving the contracts.

Fraud training within the board was inadequate and fraud policy not fully implemented, said the report.

With specific reference to the work on the two libraries which was paid for but which it discovered in 2005 had not carried out, the report said it reinforced the need for proper checks of invoices and physical inspection before payment

In addition to the work not carried out on the two libraries, BELB has reviewed work on 14 other libraries for which it paid £287,000 (€319,800) for and concluded £110,000 (€122,600) was paid out for work either not done or not carried out to the required standard.

The failings were only uncovered by a newly appointed facilities manager - illustrating how important it was for new managers to examine existing processes and now allow them to continue unquestioned – said the report.

“It is a concern that the failure to carry out library works to a satisfactory standard – or not at all in two instances – was not identified or raised by library staff, nor did they create or maintain any record of what work was done and when.”