Northern Ireland Water: How trust at the top ran down the drain
Northern Ireland Water (NIW) has lost four non-executive directors and, possibly just as critically, it awaits further repercussions of the review of its contract procedures. Other senior managers are now in the spotlight.
The new CEO, Laurence MacKenzie, started an internal audit of a series of recent contract approvals in October 2009, including an investigation into Contractor A, who specialises in procurement, which involved over £200,000 together with a recent further claim, still outstanding, for £750,000. This contract had not been properly approved.
By the end of January 2010, the review had found 26 other questionable deals, some breaking EU rules. The report on NIW also refers to investigation into the use of ‘invoice slicing’ in the procurement system.
The CEO found examples of contract spending which had not been properly approved.
As CEO and accounting officer, he notified the DRD Permanent Secretary and accounting officer. The Board of NIW believed that the CEO was neglecting his duty by not notifying the Board before going to the DRD. This tension was symptomatic of wider strain on relationships.
Ultimately, the chair of NIW, Chris Mellor, told the review team that the CEO did not have the trust and confidence of the Board and their relationship had become irreconcilable. At the same time, initially, the CEO offered his resignation but then asked for it to be withdrawn. However, the CEO confirmed that there was indeed a breakdown of trust.
For the minister, this left little choice. Either the Board (meaning four non-executive directors) had to go or the CEO had to go. He chose the former. One non-executive director, Don Price, was complimented and remains.