The head of an organisation which spent over £400,000 without permission has admitted mistakes were made after appearing before a powerful Assembly committee.
Ilex chief executive Aideen McGinley insisted lessons had been learned in the wake of the controversy.
An audit of accounts revealed how the organisation, which was tasked with regenerating Londonderry, spent £404,000 on projects without seeking proper approval.
Appearing before the Public Accounts Committee at Stormont yesterday, Dr McGinley said she was aware things had gone wrong.
“We got it wrong and we are going to put it right,” she told MLAs.
llex was set up in 2003 and was involved in projects like the regeneration of Ebrington Barracks and successful 2013 City of Culture bid.
As a publicly-funded body, it must secure approval from the Office of the First Minister and Deputy First Minister before it spends money on any project, but it failed to do so on a number of occasions.
An Audit Office report concluded there had been a “systematic breakdown” in how Ilex used money from central government.
DUP MLA Sydney Anderson said he was “astonished” that expenditure on consultancy, which was originally tendered at £75,000, had spiralled to £479,000.
“Yet DSD (Department of Social Development) is only told about this in November 2011,” he added.
“By this stage huge amounts of unapproved expenditure had already been incurred.”
Dr McGinley said both herself and the board were “extremely disappointed” at what had occurred, adding they were committed to addressing it.
Asked if lessons had been learned, she replied: “Absolutely.”
However, DUP MLA Adrian McQuillan suggested that, at a cost of £404,000, it has been “a fairly expensive lesson”.
Sinn Fein member Mitchel McLaughlin claimed there had been a “blatant disregard” for rules and sponsor control.
Dr McGinley was giving evidence with DSD Permanent Secretary Will Haire and Noel Lavery, an OFMDFM accounting officer.
Mr McLaughlin pointed out that, as a former permanent secretary of two Stormont departments, Dr McGinley should have been “well aware” of spending regulations.
Dr McGinley said: “As soon as I became aware of the issues I dealt with them as my experience allowed me to.”
She said that she could explain, but not defend what had happened.
“I was aware that I should have had approvals and they shouldn’t have been retrospective, and in that instance I take full responsibility,” she added.
“It shouldn’t have happened.”
By Paul Gosling
Londonderry's urban regeneration company Ilex was hauled before Stormont’s Public Accounts Committee yesterday.
It had to explain why it spent £400,000 without approval from government departments, including £29,000 for its former chief executive’s bonuses.
Sadly, Ilex has form.
Northern Ireland’s auditor previously asked why £30,000 of public funds was used to pay its former chairman’s tax bill on his expenses.
More seriously, a report by private audit firm BDO noted that Ilex has been “the subject of criticism from a variety of stakeholders”, concluding that “our review has tended to support these criticisms”.
Lack of delivery is central to those criticisms.
Derry was once told by Ilex that it should be judged on how many cranes hovered over the city constructing new buildings.
Looking at its skyline today, not a single crane is visible.
Ilex deserves credit for three great achievements: its role in winning UK City of Culture 2013; building the Peace Bridge; and beginning the regeneration of the former Ebrington Barracks. But this is not enough – nor does it compare well with its equivalent bodies in England, some of which have levered-in hundreds of millions of pounds into deprived cities.
In England, urban regeneration companies have strengthened and resuscitated their traditional retail centres.
Derry’s retail sector is in crisis, yet Ilex has barely been engaged in that role, with other bodies arguing this is their job.
Ilex is now entering its endgame, with the company likely to close in 2016.
Its total spend to March 2012 is £40.5m, not including the £14.5m on the Peace Bridge.
It has received something like £25m in public funding, yet the return on this is inadequate.
Demands for greater public oversight of Ilex and a realistic delivery plan for its outstanding tasks are likely to multiply – before it is too late.
By Donna Deney
THE Ilex Urban Regeneration Company Limited was set up in 2003 by the Office of the First Minister and Deputy First Minister (OFMDFM) and the Department for Social Development in Northern Ireland (DSD).
Its brief was to plan, develop and sustain the economic, physical and social regeneration of the Derry City Council area.
In June 2011 the final draft of Ilex's ‘One Plan’ was revealed, giving the company's vision for the future of Londonderry.
It included a promise of 13,000 new jobs and huge capital investment, beginning with a massive injection of £100m and the expansion of the Magee campus of University of Ulster. Just days after the One Plan was revealed the First and Deputy First Ministers were back in Derry for the opening of the Peace Bridge — a huge success for Ilex.
Earlier this month, the company was forced to justify spending £250,000 on the opening celebrations after it was criticised by Foyle MLA Pat Ramsey.
Ilex also has specific responsibility to manage and redevelop the two former military bases of Ebrington (26 acres) and Fort George (14 acres) in the city.
The Ebrington site was officially opened in February of this year.
There have been ongoing difficulties with the Fort George site because of chemical contamination difficulties.
Ilex received £3.2m for the decontamination of the ground in March 2011.
As a public body Ilex must secure approval from the OFMDFM before it spends money on any project and its accounts are subject to inspection by the Northern Ireland Audit Office.
During the audit of the accounts for 2010/11 it came to light that Ilex had on a number of occasions failed to get approval from OFMDFM, but proceeded with spending a total of £404,000 regardless — leading to the accounts being “qualified” by the Northern Ireland Audit Office.
Ilex is compelled to “lay” its accounts before the Assembly as the company chief executive did at Stormont yesterday.