A chief executive of the Northern Ireland Events Committee (NIEC) was involved in "covering up" debts of almost £1.5 million with misleading and sometimes fabricated documentation, a damning report has found.
Janice McAleese was singled out for criticism by the Audit Office, as it emerged that the PSNI is "in the final stages of an investigation into the NIEC's funding of several specific events between 2004 and 2006".
Ms McAleese resigned from the quango in 2007, just before the Department of Culture, Arts and Leisure (Dcal) wound it up after the seven-figure debt was revealed.
She was chief executive and accounting officer between 2003 and 2007, despite there being no evidence she was sufficiently qualified or had enough management experience for the job, according to auditors.
Among the findings are that Ms McAleese failed to declare two significant conflicts of interest.
One was the award of a £120,000 contract for building a Motocross track, without documentary evidence of a competitive tender process, to a man she was in a relationship with.
She also employed a relative, through marriage, to a senior managerial role without a declaration.
"In our opinion the standard of leadership provided by Janice McAleese fell well short of what is expected from an accounting officer," the report said.
"This included conflicts of interest which were poorly handled and covering up escalating financial losses with misleading and, on occasion, fabricated documentation which was provided to the board and to Dcal."
Auditor General Kieran Donnelly said it was one of the worst cases he had seen of failure to meet the conduct expected by holders of public office.
"I am not aware of any other accounting officer failing so comprehensively to uphold the Nolan principles of conduct in public life," he said.
The Department of Enterprise, Trade and Investment is "considering potential disqualification proceedings" which ban an individual from being a company director in the future.
The NIEC, which was set up in 1997, was involved in bringing international superstars such as Elton John and Luciano Pavarotti to perform in the grounds of Stormont.
Eleven years and £18 million of public funding later, it collapsed amid a financial scandal, now only existing as a shell to pay off creditors.
Deti inspectors found a deficit of almost £1.5m - £1.3m of which was run up overspending on events it promoted between 2005 and 2007 alone.
The majority - £1.1m - related to promoting five Motocross and Supermoto motorbike events, spending which "spiralled out of control". The shortfall was later met by Dcal.
Auditors said it was "unclear exactly how much the promotions company [paid around £450,000 by NIEC] actually contributed to the cost of the two events"
A further £350,000 was paid directly to various suppliers.
Today's report is heavily critical of oversight failures by the NIEC's board, with its chair, Mervyn Elder, accused of "placing undue reliance on the information provided to it by Janice McAleese"
It also reveals that the board did not meet its external auditors for a decade and had been "technically insolvent" for two years before anyone noticed.
Dcal is criticised for failing to identify and prevent what happened under Ms McAleese's stewardship, and failing to investigate "a number of whistleblower complaints" that might have identified problems "much earlier".
The report said in 2005, without the formal approval of the board or Dcal, Ms McAleese exposed the NIEC to far greater financial risks by steering the company from offering grant funding to private sector promoters to promoting its own events.
She and another senior official, Jasper Perry, made personal loans of thousands of pounds to cover mounting cash flow problems.
Mr Donnelly acknowledged that Dcal has since moved to improve governance structures within its other arm's length bodies.
