I welcome the debate, which highlights the fine work of the Committee. I take the opportunity, as other Members have done, to thank the Committee staff for their sterling work in conjunction with the Audit Office. It is an area of work that came to the fore only because of devolution, before which no one paid much attention to what the PAC at Westminster was doing.

I am a member of the PAC and speak as such. However, as an individual, I have seen the benefit of having an Assembly Public Accounts Committee. Back in 1998, I was a member of the PAC during the first mandate. It was regrettable that the momentum was lost when devolution was suspended, and a few people went back to their bad old ways. We are three years into the current mandate, and the culture of good practice is returning. It is up to the Public Accounts Committee to ensure that delivery, value for money and best measures are put in place across the board.

The PAC has examined cases ranging from bad practice and maladministration to fraud. I will focus on one particular case of fraud in the Sports Institute Northern Ireland, which is an arm’s-length body and a joint venture company that was established by the Sports Council for Northern Ireland and the University of Ulster. The Committee learned from the Comptroller and Auditor General that a senior member of staff at the Sports Institute Northern Ireland had committed fraud.

The tale of this fraud — how it was committed, the control weaknesses that gave rise to it and the response of the company and its sponsors to its discovery — presents some important lessons for the public sector. Nearly £75,000 was stolen during an 11-month period from October 2005 to August 2006. The fraudster stole the money in several ways, including writing and cashing company cheques, but he took most of the money by abusing the company’s online banking system to make payments on his own behalf and manipulating the payroll records to cover his tracks.

He was able to get away with it for nearly a year, due largely to the lack of effective controls in the Sports Institute Northern Ireland. There was no functioning separation of duties in its finance section, and there was inadequate management supervision of the individual’s work. It was clear that the most basic controls and general governance arrangements were not in place. Such controls would have helped to prevent or detect the fraud.

More alarming is the fact that there was no evidence of any check of the fraudster’s academic or professional qualifications, which seems strange in this day and age. Nor was there evidence that references from previous employers were taken up before he was employed. It also appears that several warning signs in his behaviour went unnoticed by management for some considerable time, and an opportunity was missed to launch a fraud investigation when some absolutely damning facts came to light.

Once the fraud was discovered, the Sports Institute Northern Ireland took swift action to suspend the fraudster and report his activities to the police. He was subsequently dismissed and prosecuted. The Sports Institute Northern Ireland undertook a forensic audit to establish the history and extent of the fraud, but, unfortunately, it was not carried out by professional investigators and some of its activities could have compromised a prosecution. In the event, however, the fraudster chose to plead guilty in court.

We were pleased to be informed by the Department of Culture, Arts and Leisure (DCAL) that robust financial management and reporting has now been established in the Sports Institute Northern Ireland and that action has been taken to ensure that the lessons learnt from the NIAO’s report were applied effectively in the Department and in its arm’s-length bodies. We were also heartened by the improvements made to the Department’s arrangements for undertaking proactive and reactive counter-fraud work. DCAL has issued updated guidance to all its arm’s-length bodies detailing the controls that should be noted and requiring an assurance that such controls have been implemented. DCAL has also made significant progress on the sponsorship arrangements.

The Department states that it has a service level agreement for the provision of fraud investigation services, which provides sufficient resources for the Department and its arm’s-length bodies to respond appropriately to any suspected or, indeed, actual cases of fraud. It remains a concern, however, that £10,000 has yet to be recovered, despite the fraudster’s conviction in 2007. Some may say that we were lucky to get the balance back, but the Department has told us that it is considering options on the way forward. We expect to see the recovery of those outstanding public funds some time in the future.

No one is beyond the reach of the PAC, whether in a Department, an arm’s-length body, or even if they are at a hand’s length or a fingertip’s reach. Lessons are being learned and we expect to witness improvements across all Departments in the way that we did as time passed in the 1998 Assembly.