AN INTERNAL banking unit for the north's Courts Service is not ensuring value for money for the £290 million it manages on behalf of 14,000 people unable to control their finances, auditors have found.
The Court Funds Office (CFO) holds and invests money for minors awarded damages in the civil courts or adults incapable of controlling their affairs due to mental incapacitation.
Despite spending £700,000 a year on stockbroker fees on top of £1 million annual operating costs, the Northern Ireland Audit Office found the CFO was not properly accountable.
Its findings included:
* The same stockbroker was appointed by the CFO for almost eight decades from 1930s to 2008 before competitive tendering was introduced for the first time. Two tendering processes have been conducted since then and on both occasions a new stockbroker was appointed.
* A modernisation programme started in 2004 to ensure the CFO was providing a modern, flexible, cost-effective service that met the needs of clients and stakeholders - but the programme is still not complete and much-needed legislative change has been delayed.
* None of the groups over-seeing the CFO have the necessary independent financial expertise to challenge investment policies or assess quality of stockbroker advice.
* The CFO has not sought sufficient information to understand the performance of its funds.
* It does not publish any standards to measure the quality of service it provides.
* Is not bound by any efficiency targets set by the Courts Service.
Auditor General Kieran Donnelly said: "Current arrangements and existing legislation for managing and protecting funds in court do not ensure value for money or proper accountability for clients' funds.
"The CFO is responsible for the stewardship of funds held under the protection of the courts on behalf of some of the most vulnerable members of our society. The interests of its clients must be at the heart of the service provided."
The CFO, which employs 24 staff, is a business unit within the Northern Ireland Courts and Tribunals Service that provides judiciary-approved banking and investment services.
It invests clients' money in a number of different ways, ranging from deposit accounts with fixed interest rates to buying shares on the stock market.
The most widely used vehicle is government stocks (gilts), which although offering a lower return also present a lower risk than equities.
Operating costs of £1 million should be recovered from deposit interest, but since 2012 the Court Service has borne these costs because interest rates have been too low to generate sufficient funds.
Auditors made a series of recommendations aimed at improving performance and accountability and ensuring better value for money.
The Department of Justice said: "We are currently studying the report from the Audit Office and welcome the recognition that improvements in the Courts Funds Office have been ongoing since the devolution of justice.
"We are committed to a programme of further improvements in performance and accountability, including modernisation of the systems to make the office more effective and efficient."