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‘Serious’ breaches of rules uncovered by probe into Northern Ireland Water contracts

By David Gordon

Bosses of Northern Ireland's water company are in the firing line after a damning report on the awarding of lucrative contracts.

Independent investigators have found “serious” breaches of the rules, involving major contracts being issued without competitive tendering processes.

Attention will now focus on the response of Regional Development Minister Conor Murphy to the findings on Northern Ireland Water (NIW).

The investigation report has also exposed a division at the top of the publicly-owned company over the way the situation has been handled.

This newspaper revealed last month that the NIW probe had been launched. It was predicted at that early stage that “heads could roll”, and this outcome now looks more likely in light of the completed report.

While not identifying any individuals who made the actual decisions, it makes clear that overall corporate-level responsibility lies at a senior level.

A spokesman for the company last night said the independent review was complete and the Minister “was now considering the issue”.

The investigation was ordered after an internal audit review flagged up concerns about procurement practices.

It has centred on the awarding of contracts through “single tender actions” — where other potential suppliers have not been given the opportunity to compete for work.

Public sector bodies are expected to invite rival bids to ensure value for money. High-level approval is required if competitive tendering processes are not being followed.

The report has listed repeated cases where single tender contracts were awarded by NIW, without the authorisation of its board or the department.

The independent investigation team concluded the practices involved “a serious failure in procurement governance surrounding public funds”.

It adds: “The breakdown in the application of the governance and control framework is a serious matter for those responsible and accountable, primarily the Board of NIW and the Executives responsible for ensuring compliance.”

The report also notes a “serious breakdown in relationships” between the Northern Ireland Water board and its chief executive Laurence MacKenzie.

All the contracts involved in the investigation were awarded prior to Mr MacKenzie's arrival at the company last summer. He helped initiate the probe that has now been completed.

The report states that the NIW board was aggrieved over the way internal audit findings were notified to the Department for Regional Development by the chief executive “without consideration by the NIW board”.

Mr MacKenzie at one stage tendered his resignation, but this was later withdrawn.

The report says the breakdown in relationships creates a “severe difficulty” for the task of addressing the contract issues.

“It is our view that this situation cannot be allowed to continue,” it adds.

The report will be viewed as an endorsement of Mr MacKenzie's position. It states the best way forward involves the chief executive being tasked to deliver the required changes.

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