A strategic payment?

Another week, another NI Audit Office report that is critical of the allocation of funds by government. This time its the Department of Social Development, who have been criticised for awarding the Fernhill House Museum a “rescue package” grant of £98,175, by Belfast Regeneration Office of the DSD, under the Making Belfast Work (MBW) initiative, after a written request by the Museum’s Manager – full report available here – The interesting point to note, as well the museum’s manager being Tommy Kirkham of the UPRG, is that throughout the report the Department deny that they acted improperly, despite the fact that the Audit Office’s view is that the grant was irregular and the report’s conclusion that – “We are of the view that the Department’s assessment of the application did not conform to the minimum requirements for an economic appraisal required by DFP nor did it satisfy the Department’s own requirements.”From the report’s Conculsions and Recommendations –

36. We are of the view that the ‘rescue package’ of £98,175 for Fernhill House Museum was novel and contentious expenditure which required the prior approval of DFP[Department of Finance and Personel]. Having failed to obtain DFP approval, payments were, in our opinion, irregular. AS Fernhill’s application for funding was notsubject to the usual application and assessment process, it might well be perceived to have had more favourable treatment than other applicants for funding. We consider that the value for money of the funding decision has not been demonstrated. We are of the view that the Department’s assessment of the application did not conform to the minimum requirements for an economic appraisal required by DFP nor did it satisfy the Department’s own requirements. We are particularly concerned that, in failing to appraise the project in line with DFP guidelines, the Department has acted contrary to an undertaking given to PAC [Public Accounts Committee] in 1998 (paragraph 6).

37. We recommend the Department take action on the following issues in light of the concerns raised by its funding of Fernhill House Museum:

– The Department should ensure that where an assurance is given to PAC as to how a programme is operated, this should be adhered to, even when that undertaking was given by a preceding body:

– The Department must ensure that all projects submitted for financial assistance are subject to assessment and appraisal in accordance with DFP guidelines;

– The Department needs to introduce defined policies and procedures if it is to introduce ‘rescue packages’ or ‘buying time initiatives’;

– The application process must continue to be fair to all applicants. Fast-tracking fuinding application where time is of the essence, is reasonable in practice, but nevertheless requires pre-arranged priority procedures which ensure proper controls and safeguards; and

– Officials need to be alert to the requirements of Government Accounting Northern Ireland on circumstances requiring DFP approvals. The Department should consider further training for its officials.