Derry council to relaunch tender, seeking auditor to check nepotism claims
A new bid is underway to find a firm willing to investigate allegations of nepotism among certain council-funded groups in Northern Ireland.
n January, the Sunday Independent revealed that a number of the world’s largest accountancy firms had refused to undertake an audit on behalf of Derry City and Strabane District Council because they believed the work would be ‘too political’.
However, the council has now re-tendered the controversial project, which was launched last year after concerns were raised about governance and recruitment procedures at council-funded community groups.
The tender document says the proposed audit will focus on groups that have received more than £20,000 from the council.
“The purpose of the audit is to establish whether governance, policies and practices in the nonprofit sector are transparent, accountable, ethical and capable of managing the conflicts of interest that inevitably arise in organizations often overseen by committees volunteer management,” the document adds.
The board first agreed to carry out the audit in May last year, after an adviser raised concerns about reports of ‘widespread nepotism, poor governance and recruitment procedures’ at the within the community sector of the city of Derry.
In September last year, the board contacted 20 accounting firms to gauge their interest in carrying out the audit. Eight companies responded and subsequently received tender documents outlining the details of the work to be carried out.
Among the companies that received the tender documents were Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers. However, none of these companies submitted a bid for the contract.
A report prepared for the board’s insurance, audit and risk committee following the failure of the bidding process indicates that officers from the board contacted the eight companies to try to determine why none offer has not been submitted.
Among the reasons given was that although the companies realized that the council was obviously involved in local government politics, there was a perception that the audit was ‘too political’.
According to the report, based on feedback received from companies, the risk of not receiving any bids if the tender was re-issued would be “extremely high”. Despite this, the council has now launched a new call for tenders inviting bids from companies interested in carrying out the audit.
A council spokesperson said that following two motions passed by councillors, the council’s internal audit team was tasked with auditing the governance of community groups receiving council funding.
“At the Board’s Assurance, Audit and Risk Committee in September 2021, members approved the terms of reference and were informed that the Board’s internal audit team does not have the resources or authority to perform the work.
“Therefore, it was agreed that officers would begin a sourcing exercise to appoint external support to complete the work and present the results of this exercise to members for approval, prior to appointment,” they said.
“At the January 2022 meeting of the Assurance, Audit and Risk Committee, members were informed that, with respect to this audit request, the procurement exercise had been completed and no submissions from call for tenders had not been received.
“As a result, members agreed that a Tasks and Finishes Working Group would be set up to review and revise the scope of the original terms of reference and report back to the committee.
“Subsequently, at the June 2022 meeting of the Assurance, Audit and Risk Committee, members agreed to a revised Terms of Reference and a sourcing exercise to begin appointing one or more consultants. to finish this job.”
The council spokesman said there was no cost for the initial bidding process.