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Chief of Northern Ireland events firm doctored bank records to conceal debts of £1m

By Adrian Rutherford

Published 29/09/2015

Janice McAleese resigned as chief executive of the Northern Ireland Events Company in 2007 - months before it was wound up with debts of more than £1m
Janice McAleese resigned as chief executive of the Northern Ireland Events Company in 2007 - months before it was wound up with debts of more than £1m
Luciano Pavarotti performing at Stormont Parliament Buildings in a concert organised by the now-defunct NI Events Company
Elton John
The Eagles

The boss of a defunct quango which brought the stars of showbusiness to Northern Ireland used fabricated bank records to cover up spiralling losses, it is revealed today.

Janice McAleese resigned as chief executive of the Northern Ireland Events Company in 2007 - months before it was wound up with debts of more than £1m.

An explosive report concludes there was a "complete breakdown of financial control" at the publicly-funded body.

The probe, by the Northern Ireland Audit Office, is heavily critical of Ms McAleese, stating that she was involved in concealing the escalating losses with misleading and fabricated documents.

It also cites a series of poorly handled conflicts of interest.

In one case Ms McAleese had a personal relationship with a contractor who was subsequently employed by NIEC to build a Motocross track.

Auditor General Kieran Donnelly said she had completely failed to abide by the Nolan principles - a series of ethical standards expected of public office holders.

"I am not aware of any other accounting officer failing so comprehensively to uphold the Nolan principles of conduct in public life," he concluded.

The report also found:

Little evidence that Ms McAleese was suitably qualified or experienced for the role of chief executive;

Ms McAleese and another senior official, Jasper Perry, had made personal loans to the company in a frantic bid to cover mounting losses;

An additional £200,000 overdraft facility had been set up without the knowledge of the board;

Significant debts were racked up promoting Motocross and Supermoto events, with spending allowed to spiral out of control;

Poor oversight from NIEC's board and the Department of Culture, Arts and Leisure (Dcal);

A police probe into the aspects of NIEC's business activities is nearing completion.

The Northern Ireland Events Company was set up in 1997 to boost our profile on the international stage, and subsidised showpiece gigs at Stormont by artists such as Pavarotti, Rod Stewart and Elton John.

It received around £18m of public funding between 1997 and 2008, but folded with debts of almost £1.5m.

Ms McAleese was appointed chief executive in December 2003, despite little evidence that she was suitably qualified. Today's report states how she attempted to cover up NIEC's mounting losses using fabricated documents.

In order to access grant funding from Dcal, each application had to be accompanied by the most recent bank statement.

A £318,000 funding application included a bank statement, dated March 29, 2007, showing that NIEC was £99,000 overdrawn.

Inspectors found the actual bank balance at March 29, 2007 was £120,000 overdrawn.

Today's report also flags up an unapproved £200,000 overdraft facility.

NIEC had two overdraft facilities of £100,000 and £200,000. Dcal was aware of and had approved the first, but was not aware of the £200,000 facility.

A number of personal loans were also made to NIEC between December 2005 and February 2007 to alleviate cash flow difficulties.

The loans were either made by, or with the knowledge of, Ms McAleese and Mr Perry, and ranged between £3,000 and £25,000.

There is no evidence that the board had any knowledge of these loans.

The report adds: "NIEC's cash flow problems were a direct result of the increasing financial deficit and the poor financial records made it difficult for it to quantify the extent of the growing losses.

"It is alarming that personal loans were used in order to further disguise the deficit from the scrutiny of the NIEC Board and DCAL."

The report cites how Ms McAleese failed to declare a series of conflicts of interest.

In one case she had a personal relationship with a contractor who was subsequently employed by NIEC to build a new Motocross track at Moneyglass.

The contractor was paid a total of £120,000 by NIEC. Concerns were raised over the authenticity of his invoices and the lack of supporting information.

There is no documentary evidence supporting a competitive tender process and no formal signed contract. Nor was the conflict declared in the register of interests.

In another case, NIEC appointed a commercial manager in 2004.

The successful candidate, who had been providing support services to NIEC on a consultancy basis since December 2003, was a relative of Janice McAleese by marriage.

Company records show NIEC overspent massively on events it promoted between 2005 and 2007.

Debts of more than £1.1m were accumulated promoting five Motocross and Supermoto motorbike events in this period.

The report is also highly critical of the lack of oversight from NIEC's board and DCAL.

The board, and in particular its chair, placed "undue reliance" on information provided by Ms McAleese.

DCAL also failed to scrutinise key information made available to it, including whistleblower complaints which were not thoroughly investigated.

Culture, Arts and Leisure Minister Caral Ni Chuilin said: "I am satisfied that subsequent improvements in governance and sponsorship arrangements which have been made are recognised in the report and I note that the report itself makes no additional recommendations.

"The Assembly's Public Accounts Committee has indicated that it will consider this NIAO report by way of evidence session. It is therefore important that any comments should not pre-empt or pre-judge any evidence that might be given."

The key failings

Findings from the audit report

• Events Company  received £18m in public funding between 1997 and 2008, before being wound up with debts of £1.5m

• Financial and budgetary position manipulated to cover company's spiraling losses

• Fabricated bank statement used to support claim for grant funding

• Janice McAleese had personal relationship with contractor subsequently employed to build new motocross track

• Company moved to promoting own events, exposing it to greatly increased financial and operational risk

• Huge financial deficit from promoting motocross and supermoto events from 2005 to 2007, with spending 'out of control'

• Company's board and DCAL slammed for failing to provide adequate oversight

• Whistleblower complaints not taken seriously. Saga is now subject of investigation by PSNI

• Report concludes: 'We are unaware of any other instance in the Northern Ireland public sector in which an accounting officer has failed so comprehensively to uphold the Nolan principles of conduct in public life'

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