Accountancy giants decline council’s request to carry out ‘nepotism’ audit of Derry community groups
A Northern Ireland council has again failed to find a company willing to carry out an investigation into claims of nepotism within groups it helps to fund.
ast year, Derry City and Strabane District Council said it was aware of “public concern about reports of widespread nepotism, poor governance and recruitment procedures” among some community groups in Derry city.
As a result, the council, which has allocated more than £11m in funding to community groups in the last five years, agreed to undertake an independent audit of governance and recruitment procedures in community groups which had received funding during that period.
However, the council has so far been unable to secure the services of a company to carry out the audit, and the Sunday Independent has learned another recent procurement exercise has also been unsuccessful.
Earlier this year, this newspaper also revealed a number of the world’s top accountancy firms had declined to take on the audit as they believed the work would be “too political”.
The council first agreed to carry out the audit in May 2021 after a councillor raised concerns around employment practices within the community sector in Derry city. People Before Profit councillor Shaun Harkin claimed the alleged issues undermined confidence in the ability of the sector to provide crucial services and support to the public in an “impartial manner”.
A motion to carry out the independent audit was passed but was not supported by Sinn Féin, the largest party on the council.
In September last year, the council contacted 20 accountancy firms to gauge interest in carrying out the investigation. Eight companies responded and they were sent the tender documents which outlined the details of the work to be carried out.
Among the top accountancy firms which received the tender documents were Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers. However, none submitted a bid for the audit contract.
The council contacted some of the firms in a bid to establish why there had been no interest. Among the reasons given was while the companies realised the council was involved in local government politics, there was a perception the audit was “too political”.
Other reasons for not bidding for the contract included claims the scope of the audit was “too large” and it was difficult to quantify how many days it would take to complete the work.
One company said the costs of providing senior staff to work on the audit would average £1,450 per day and they would not be able to commit senior resources to complete this work.
A council report written following the initial tender process stated, based on the feedback received from the companies, the risk of receiving no submissions if the tender was reissued would be “extremely high”.
Despite this, following a review of the terms of reference for the audit, the council issued a new tender for the audit last July.
The tender was first issued to eight companies on a council-approved list of accountancy and audit firms. However, no bids were received from these companies and the tenders were then issued publicly, with a closing date for bid submissions of September 2.
Fourteen companies initially expressed an interest in the tender but, again, no final tender submissions were submitted.
A report brought before the council’s audit committee last week said feedback had been sought from the companies to ascertain why no submissions were received.
The companies that responded provided a number of explanations, including being unable to put a team together due to the volume of existing work and being unable to put the right team in place.
No decision has yet been taken by the council on how to progress the planned audit.
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