NI Water: “How did PwC get it so wrong?”
On Friday, Diana Rusk had an interesting take on the NI Water issue.
She highlights a memo from last April in which the Finance Minister, Sammy Wilson, responds to a request for an explanation for why Price-Waterhouse Coopers awarded Northern Ireland Water exemplar status on its procurement practice, when the same organisation has just sacked its Board for the same issue.
The questions sharpen somewhat when you take into account that PwC have a number of those £28 million worth of contracts thought by the Department’s Independent Review Team to have been ‘irregularly awarded’.
Now no one should infer that there was anything illegal, or even necessarily improper, here. That question appears to have been raised early on by the Auditor General and then quietly dropped in later correspondence. Even Messers Priestly and McKenzie could not claim at the PAC that anything had been done which actually breached the law.
But it raises (once again) the problem of closed loop reviews, in which there are obvious conflicts of interest. Like the Auditor General briefing the department before the PAC meeting, given the Audit Office is supposed to be independent, it doesn’t read well after the fact.
Besides, how can we take the PwC report passing everything at NI Water, at face value when another ‘independent’ player (the IRT) claims there is a serious problem? If one is right, surely the other is wrong?
Although Mopp, that indeed might make sense, as far as DRD are concerned, but doesn’t get them off the hook by a long shot…
Cheers.. Thanks… go raibh maith agat…. etc
William,
Posted in around the same time
With all due respect, Nevin, the NIAO is quite a costly part of government; indeed its budget has increased by around half a million quid each year over the last few years. I am still not sure what role they play in anything, other than take up a lot of time which could be otherwise better spent.
I had time for their role over the past fifteen years when receipts in certain central government departments were still being written on Post-its. But now? I’m not so sure. Not at the cost they are.
The phrase and the question was the Minster of Finance’s, not mine. PwC did not get it wrong in the same way that three internal audits did not get it wrong when they found no evidence of a substantial problem with procurement inside NI Water.
There is no real evidence of NI Water getting anything majorly wrong in procurement. That only happens when the IRT sits and uses *provisional* findings from the procurement review.
Findings which the Board get no sight of, and which do not conclude until two days after the IRT issues its final report on 25th February. And even then the report continues to be amended thereafter.
The problem is that throughout this period the Chairman’s reluctance to let the IRT have sight of an unfinished report is consistently mischaracterised in the virtual paper trail as ‘interference’…
Something which the IRT uses as a cornerstone justification in a submission (prompted by Priestly) to the PAC of their changes from draft 1 to draft 2… More on which later…
‘And even then the report continues to be amended thereafter.’
This appears to be absolutely routine and meetings where ‘it might be helpful’ would appear to be par for the course. And in this, it’s the NIAO’s role that requires the utmost scrutiny.
The purpose of ‘helpful meetings’ is for what we already know: aspects of ‘investigations’ are discussed to maximise the guilt of the accused on the flimsiest pretext, cherry-picking evidence (Declan Gormley’s testimony missing, for example) and downgrading elements where departmental failings are too uncomfortable.
NIAO are supposed to be independent, yet time and again we find that they’ve got their thumb jammed up the departmental ass.
http://www.bbc.co.uk/news/uk-northern-ireland-11145647
Conor Murphy is to meet the Finance Committee later today. According to the BBC ‘SDLP MLA Connall McDevitt said he and fellow Department for Regional Development (DRD) committee members wanted “some very clear answers” from the minister about his chief advisor’s suspension.
“Most particularly we need to know whether he still stands over the independence of the independent review which led to the dismissal of four non-executive directors at NI Water,” he said.’
Let us hope Mr McDevitt also raises questions about the independence of the NIAO.
‘I am still not sure what role they play in anything’
Does anyone know if the services they provide are open to anyone? Or is their role a de facto ‘single tender’?
I can feel my antennae twitching.
mopp, thanks for providing some clarification to the point I raised at 5.04 pm above. I’ve posted a link there to the report.
“NIW (Water Service) was well behind the field of 8 in the 2005/6 review but had overtaken the Housing Executive by 2009. Translink was well ahead of the field in 2009.”
“Live coverage of the Regional Development Committee.
Regional Development Minister Conor Murphy, and Dr Malcolm McKibbin, temporary head of the Department of Regional Development are briefing the committee on procurement governance for Northern Ireland Water.
The committee will also be briefed by the Construction Employers Federation.”
11.30 am – 12.30 pm
Procurement Governance in Northern Ireland Water. (Malcolm McKibbin, Gary Fair and the Minister for Regional Development)
The logic of Brian Feeneys article in todays Irish News might suggest that Minister Murphy could also have had a hand in the process surrounding the questionable IRT report and its covert objectives
but Ive lost the thread on the relationship between McK and the imported NIE director mentioned earlier-any enlightenment out there
I wonder if he “had a hand” in the IRT report covering the Rathlin Ferry Contract?
http://www.u.tv/News/NI-Water-investgation-begins-in-October/abf6787c-c3c8-4561-b9b8-8f268f6d0925
“The investigation, which is to be completed by the end of October, was announced by the Head of the Northern Ireland Civil Service Bruce Robinson on Wednesday.
In a statement Mr Robsinson said it will look at the events which followed the Public Accounts Committee (PAC) hearing on Northern Ireland Water on 1 July 2010, at which Mr Priestly was asked to step down “in light of information which emerged on that date”.
On Wednesday morning, Regional Development Minister Conor Murphy is to come face to face with an assembly committee at Stormont on Wednesday for the first time since the Northern Ireland Water scandal emerged.
Committee member Conall McDevitt said the minister needs to clarify his handling of an independent review which led to the sacking of the directors at the meeting.
“The minister needs to assure the committee that two major questions are being addressed,” the SDLP MLA told UTV.
“The first is what happened that led him to seek the suspension of his permanent secretary.
“The second is whether he still has confidence in the independent review team report which now has so many questions hanging over it.”
A statement from the Regional Development Committee said that at the meeting “We will be asking the Minister to explain to the Committee, with the utmost clarity, developments since he briefed us on the Independent Review Team’s report on 15 March 2010.
“We will also be asking him to set out the further action he proposes to take.
“There is no doubt that the current situation is serious, and we will continue to prioritise this matter.”
There is a feeling in some organisations that there needs to be an in depth review into exactly what was going on in DRD and with other Priestly commissioned Independent Reviews.
Interested
Can you give us a brief outline of what he said.?
interested, the Minister has already indicated his involvement but Delargy didn’t extract the detail:
Murphy (6.48 mins into his piece on UTV player): “.. so the core issue is here is that attention my attention was brought to the fact, initially in relation to one contract that there was something on-toward going on within NIW and I asked for further inquiries into that and that turned up 73 contracts with £24.5 million of awarding of contracts which couldn’t be defended which was done in an improper fashion”
The Patterson-McDaid letter [18 March 2010] gives a flavour of the Minister’s SpAd’s role in the selection process for the interim NEDs.
balanced! – its waffle attempting to protect the existing vested interests –and just in time for the Assembly meeting
“There is a feeling in some organisations that there needs to be an in depth review into exactly what was going on in DRD and with other Priestly commissioned Independent Reviews.”
So, in answer to my earlier posting, – it would appear so!
CRD stuck in a traffic jam in Downpatrick – running about 20 mins late
It would be dangerous to give outline-just a few snippets
ending first
“So pay attention to Conor Murphy and his efforts to break the old boys network. Its long overdue and you can tell hes having an effect from the people squealing, Theyre unionists who have been able to hold onto the reins of power in this place since direct rule came in, in 1972. Pay attention to whos being appointed to quangos and youll see the change”
” A couple of weeks ago, blogging from Hawaii(these Fenians are getting everywhere)Mairtin O Muilleoir raised the question of who was serving on the boards of state agencies, like Northern Ireland Water, for instance……..”
that is the starting and ending paragraphs -reversed-there is much in between but these paras give the line being taken against us unionists!!!!!!!!!!! (was it something like the asylum and the Marquis de Sade)
‘pay attention to Conor Murphy and his efforts to break the old boys network. Its long overdue and you can tell hes having an effect from the people squealing,’
If that’s an actual quote then it’s the poorest of piss poor analysis as I’ve read…ever.
Murphy’s calling the shots? It’s all politically motivated?
Nothing to do with alleged procurement matters?
What next? Feeney claiming it is all a Baldrick-like clever plan by Murphy as some ongoing ‘greening of NI’? SF moles were planted in NIW to create procurement concerns? I’m sorry, it’s just simply moronic.
The accounting rules are different between a GoCo and an NDPB.
I think it’s the difference between the market value of £1b, ie what someone would pay for it, and replacement value of £6b, based on the slightly unreal assumption that all the assets need to be replaced.
agree with your analysis DC-NI is also too small and the system has enabled a much too localised and introspective culture-not really engaged with Europe, for instance, even though benefiting hugely from funding transfers from both London and Brussels.
‘Mr Robsinson said it will look at the events which followed the Public Accounts Committee (PAC) hearing on Northern Ireland Water on 1 July 2010, at which Mr Priestly was asked to step down “in light of information which emerged on that date”.’
I would have imagined the obvious jumping on point was where McKenzie’s antennae twitched, and the conversations that flowed from that to instigate the IRT within days.
‘There is a feeling in some organisations that there needs to be an in depth review into exactly what was going on in DRD and with other Priestly commissioned Independent Reviews.’
Ah, no.
Let’s go for a Public Inquiry instead.
Sarah Vanning was Ops Director at NIE and is now Ops Director at NIW.
“Live coverage of the Regional Development Committee.’
At 215pm, ‘the committee is sitting in private’.
It appears there are some issues so corrupt at NIA level that the great unwashed can’t be permitted to hear them.
‘the Construction Employers Federation;
Another quango with plush offices on the Malone Road whose staff are all doing well, thank you very much, on the toil of those who actually do break sweat.
As I pointed out previously (30Aug) the audit report as presented to the IRT would normally have drawn censure and identified required actions to be taken but not the dismissal of an entire board (cept one).
As the Regulator and particularly NIAO would be well aware – if this standard for dismissal was applied universally many Boards and accounting officers would be packing their bags. NIAO have identified much more serious failings which have not resulted in anything other than censure if that!
For reasons that are far from clear this audit report (which we must remember was carried out by the same team that had failed to pick up any such breaches prior to this audit and to detect the much much larger problems that have taken the Steria Contract to court,) has been blown out of all proportion to the actual findings or other government failings. No doubt this is why it is not being published.
The fact that a report which at IRT identified 24 contracts has we are led to believe been augmented to include 70 or is it 73, or 78 contracts is not surprising. It would be clear to anyone that the audit report presented to the IRT (which is more of a comment on the audit team than anyone else) would not be seen as sufficient for the actions taken by the Minister when other government failings are taken into account.
However if the Minister, NIAO and others are going to insist that this report warranted such actions then we the people should insist that all other government departments, goco’s quango’s that eat up our tax pounds immediately are judged on this same standard – bring on the audits !
As for the disparity between PWC findings and this issue you have to remember that the PWC probably made their assessment based on NIW current practices where as the audit report has had to reach back to already changed practices and extinct contracts to justify their position and increase the numbers to something more sensational.
No doubt all government entities need to get better at spending our money but the worst thing that can happen to NIW is to have a CEO in charge supported by a Board of yes men. When it comes to money our money conflict and challenge is good too much of this chumminess stuff is not good.
NIAO’s role and review of other IRT’s would also be important.
Now it would be interesting to see how that appointment was made – competitively ?
‘NIAO’s role and review of other IRT’s would also be important.’
I agree. So far NIAO seem to be ‘getting away with it’ (i.e. their patent failures and lack of independence).
But as the affair seems ready to rumble on, daily, until mid-November at least (shortly after this investigation into Priestly and DRD concludes), I feel there is plenty of time in which to wait for the spotlight to swing around onto the NIAO.
There may well be questions asked by PAC when they re-convene that swing the spotlight around very firmly onto PAC. And if it doesn’t, it will tell us much about PAC’s determination on the matter, or their willingness to challenge NIAO’s role in the round. A body of evidence is slowly mounting against NIAO.
William, the other option being putting out audit services to the private sector? I’d still believe it to be a waste of time.
Anyway, they’re a wing of a government department. They undertake audits across most, if not all, of the public sector. They will cost £9m this year. They have around 140 staff. They spent £40,000 on consultants last year.
And they compile reports. On anything that takes their fancy.
William M
I have followed this from thebeginning and I have come to the conclusion that you are much to close to the action to be objective.
Excuse me?
You’re excused.
I think Samy said yo were “too close to the “action”…
Though judging by today’s performance “action” is hyperbole…
Yeah. I’m wondering how commentators on the internet are ‘too close to the action’.
Of course, part of the problem lies in the minister, the civil service, various CEOs and so forth not, apparently, being close enough to the action, so maybe Sammy’s right.
William
How would that tie in with the rest of Slugger?
Might be just a bit impossible if ” you are too close to the action”?
‘Might be just a bit impossible if ” you are too close to the action”?’
I guess everyone brings some degree of experience or knowledge to Slugger, on a variety of topics.
Lucky Pete Baker. No one can accuse him of being ‘too close to the action’ regarding stuff he posts that’s several light years away.
There was a particularly perverse opinion piece by Brian Feeney in today’s Irish News (surely worth one of Slugger’s bloggers unpicking it).
Headed “Ability not loyalty must be the criteria for board selection”, Feeney’s piece cites Mairtin O Muilleoir’s blog-from-Hawaii which was also picked up, which talked about about ability coming second to loyalty in the past when it came to these sort of non-exec director posts.
Feeney takes up O Muilleoir’s ball and runs with it, talks of how there was supposedly “no kind of selection process” even goes on about those horrible unionist councillors – with nary a nod to the fact that this was a former Sinn Féin councillor being appointed by a Sinn Féin Minister with little evident by way of selection process! (a little bit “jobs for the boys”, Brian, no…?)
Breathtaking even by Feeney’s standards.
Then there’s his closing paragraph…
“So pay attention to Conor Murphy and his efforts to break the old boys’ network. It’s long overdue and you can tell he’s having an effect from the people squealing. They’re unionists who have been able to hold onto the reins of power in this place since direct rule came in, in 1972. Pay attention to who’s being appointed to quangos and you’ll see the change”.
Now, is he referring to Slugger’s investigative work on Northern Ireland Water and DRD here? What do Sluggerites think?
Maybe he’s referring to Declan Gormley? Or is he talking about John Dallat and Patsy McGlone? Pesky “unionists”.
‘Headed “Ability not loyalty must be the criteria for board selection”, Feeney’s piece cites Mairtin O Muilleoir’s blog-from-Hawaii which was also picked up, which talked about about ability coming second to loyalty in the past when it came to these sort of non-exec director posts.’
I’m perturbed by the manner in which this party political angle is sneaking in, to the detriment of the much more important and wide-ranging issue of government ‘culture’ that the NIW affair has turned into a three ringed circus. And also perturbed by the emergent tribal faultlines.
We should leave aside the tribal party politics and simply focus on Feeney’s heading.
‘Ability not loyalty must be the criteria’. So what does Feeney think has changed? It’s quite obvious that the NIW board is now stuffed with noddies loyal to McKenzie.
William Markfelt
“I feel there is plenty of time in which to wait for the spotlight to swing around onto the NIAO”.
I dont agree the PAC is depending to heavily on NIAO to give credence to the oral evidence given by Mackenzie and Priestly and the NIW audit report. The lack of independence of the NIAO in general can probably wait but in respect of this issue it needs to be investigated now.