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Damning audit report on Social Investment Fund finds a shocking lack of transparency

Former first minister Arlene Foster (centre) pictured with DUP councillor Sharon Skillen, former Charter NI chief executive Dee Stitt, Charter NI chairman Drew Haire and project manager Caroline Birch in 2016. Charter NI had been awarded a SIF contract to deliver an employability project in east Belfast

A DAMNING Audit Office report into the allocation, management and value for money of the controversial Social Investment Fund (SIF) has found a "very concerning" lack of governance of the scheme.

Administered by the Executive Office the fund has previously been criticised amid allegations that it was a 'carve up' of Sinn Féin and DUP pet projects.

While set up to help disadvantaged areas across Northern Ireland, Auditor General Kieran Donnelly expressed concerns that the scheme did not operate transparently with serious conflicts of interest in how the £90 million pound fund was allocated.

It has awarded £79 million to 68 projects across Northern Ireland since it was set up in 2012.

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The money was initially intended to be spent in the three years to March 2015, but many projects have been delayed and the SIF delivery period has been extended to 2019-20.

The budget for the fund has been increased by more than £13 million.

SIF first hit the headlines in 2016 in a row over an alleged UDA boss's role as a chief executive of a charity awarded a contract to manage £1.7 million from the fund.

Convicted armed robber Dee Stitt stood down as chief executive of Charter NI in September but remains involved with the organisation. He said his decisions was due to the impact on his family of "media coverage".

Video - In 2016 Arlene Foster explained why she posed for a photograph with Dee Stitt:

Leading loyalist Dee Stitt who was CEO of Charter NI. Picture by Mal McCann.

The extensive 72-page report found that the Executive Office does not hold a clear audit trail in relation to the awarding of public money from the fund.

It also identified a number of concerns in the initial stages of the scheme including conflicts of interests which it found were not always appropriately dealt with.

Members of the steering groups, set up to choose projects worthy of funding, were at times also employees or board members of the groups chosen.

Lead partners were chosen without transparency

The report found 'lead partners', chosen without transparency, were responsible for the management and administration of 45 of the chosen 68 SIF projects. These lead partners will be paid more than £6 million in fees over the life of the project.

A single lead partner, overseeing an employment project in a socially deprived area, will receive more than £560,000 in fees.

The department spent a further £478,000 on consultants for the nine SIF steering groups.

Despite this the audit office said the department should have provided more guidance to what type of projects would be eligible.

In the absence of detailed guidance, steering groups operated without consistency.

In one zone projects that were primarily sport were excluded from consideration. In other zones, sport was a recurrent theme with SIF funding the construction of 11 3G pitches.

Documentation around project selection was poor and in some cases non existent, minutes when they were taken often lacked detail.

The report makes seven recommendations including the Executive Office holding a clear audit trail, "to justify why decisions were made and demonstrate that assessment processes have been applied fairly, consistently and transparently".

Mr Donnelly said the findings over the governance of the scheme are "very concerning".

Auditor General Kieran Donnelly

"The importance of good administration and ensuring conflicts of interest are adequately handled should be well understood in the public sector," he said.

"But in the case of SIF, the guidance produced by the department was inadequate, there was little evidence that procedures were followed, and a number of conflicts weren't declared. This is very concerning.

"Evidence from my audit work across the public sector suggests there is a role for additional expertise to support good governance and maintain high standards.

"Whilst audit plays a valuable role in identifying lessons to be learnt once schemes are operational, issues of propriety and conflicts of interest must be fully and properly explored when schemes such as SIF are being designed."

Executive Office response to the SIF audit

A spokesman for the Executive Office said the department accepts all the recommendations in the report.

"The Executive Office recognises that there were shortcomings in the early stages of SIF and welcomes the acknowledgement by NIAO that once projects became established, governance improved," the spokesman said.

"The report also identifies completed projects where outcomes to date are promising and value for money is likely to be achieved.

"SIF is a fund of £80 million which will deliver 68 projects up to 2020. To date, SIF revenue projects have improved the lives of almost 24,000 participants through employment, early intervention and education initiatives."

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