Londonderry's regeneration company Ilex has come under fire for spiralling and unsanctioned costs in a new report from the Public Accounts Committee.
The report, issued this week by the PAC, points to serious concerns over unauthorised spending.
Ilex was established by the Government nine years ago to spearhead the regeneration of the former military sites at Fort George and Ebrington.
It also formed a third of Derry’s successful City of Culture bid team, played a central role in securing the Peace Bridge and facilitated the city’s regeneration One Plan. However, in less than a decade the roles of chairman and chief executive have each changed hands four times.
This week’s PAC report, meanwhile, comes less than four months after current Ilex boss Dr Aideen McGinley apologised when auditors revealed that Ilex had spent more than £400,000 without proper Government approval.
The auditors found that costs for a consultancy contract on the Peace Bridge project spiralled from £75,000 to £479,000, without the increase being authorised in advance. Further unapproved spending was uncovered concerning the City of Culture bid.
Ilex’s parent departments, the Office of the First and Deputy First Minister and the Department for Social Development, refused to grant retrospective funding in respect of the City of Culture expenditure.
Ms McGinley said in April that measures have now been put in place to prevent any such unauthorised expenditure in future.
The new report on the ‘Transfer of Military and Security Sites to the Northern Ireland Executive and Ilex Accounts 2010-11’ also concludes that there was a “systematic breakdown in the application of key spending controls”.
It warns that the extension of the Peace Bridge contract and the resulting spike in costs meant it was “impossible to demonstrate that value for money had been achieved”.
The PAC committee has now recommended that the two Government departments which run Ilex “re-examine current arrangements” and have welcomed moves to ensure one single Government department will exert control over the company in the future.
Responding to the committee’s findings, a spokeswoman for Ilex said yesterday: “We welcome the report and will consider in full the committee’s recommendations.
“The Department for Finance and Personnel will prepare a memo of reply which will set out the Minister of Finance’s considered response to the issues raised.”
Foyle SDLP MLA Colum Eastwood MLA said the new report put “an official stamp” on the financial concerns over Ilex.
“Unapproved expenditure, irregular tax liabilities and travel expenses and a deficit in the financial information being shared with Ilex's governing board, amounts to a massive failure in the trust given to Ilex by the people of Derry,” he said, adding: “Ilex needs to ensure that lessons are learned and never repeated.”
He said the people of Derry will now be asking if Ilex is capable of delivering on Fort George and Ebrington.