NI Water: External auditor offered NIW a retro-fit..

MLAs are preparing to go into discussion of the NIAO’s long awaited report into the ongoing NI Water debacle that led to the sack of four out of five Non Executive Directors (even though apparently there was no fault found inside the organisation). They will find that the total value of the 74 cases investigated by internal Auditor Nicola Brennan in her ‘deep dive audit’, comes to £6 Million more than was orginally found.

Interestingly of these, 41 (that is more than half of the total) were legacy cases from the days when the Water Service was under the direct control of the Department for Regional Development. This chimes very much with Ms Brennan’s belated (and apparently unauthorised) disclosure to Internal Auditing magazine.

It also chimes with that rather frenetic point in the story when Mr Priestly warned his Independent Review team not to allow blame to be apportioned to the Department (rather than Northern Ireland Water) for an offence he later prompted the Minister to sack the four NEDs.

But there’s more. This is a passage from an internal email which specifically discusses how they might overcome the problem of non compliance with Nicola Brennan, then working for the accountancy firm, Ernst and Young. She suggests either evidence that the problems have been resolved, or, intriguingly, a ‘retro fit’. An interesting term for what was then the external auditor to use.

That should give the PAC some food for thought. It will be interesting to hear what the NIAO have to say on that matter, given they spent weeks camped at NI Water going over most of the detail. It would also be interesting to see what they have to say on the matter of the Steria customer services IT contract, since two of the people cc’ed on this letter were, at that time, staff members of Steria.

The Steria contract is where this whole story began. You know that moment when Mr MacKenzie’s antennae went up? It that’s Contracting Out contract which got junked for the entirely unexplained reason that costs were ‘identified’ rather than ‘delivered’.

Ms Brennan’s already incurred the wrath of the Permanent Secretary Malcolm McKibben, as you can see from his letter to PAC chair Paul Maskey for putting her relatively candid analysis (some would say coming pretty close to exonerating the sacked NED) into the public domain before the PAC had completed its ongoing investigation.