09 July 2004
The Northern Ireland Housing Executive put tenants' health and safety at risk and breached departmental rules in contracting for the installation of gas heating systems, according to auditor general John Dowdall.
In the period from 1997 to 2001, the NIHE spent £25m replacing solid fuel and electric heating systems in 10,000 homes with gas central heating.
But much of the contractors' documentation was incomplete and inaccurate, causing the NIHE's servicing programme to be unreliable and probably in breach of gas safety regulations, the auditor found. This placed tenants' welfare at risk and exposed the NIHE to possible prosecution and fines.
The NIHE had just two qualified staff to inspect the systems and they were unable to check properly all the work. Poor work by contractors was undertaken 'with impunity'.
Some contractors may have won work through collusive tendering, the Audit Office report added, confirming a view reached by the NIHE.
This conclusion should have led the NIHE to conduct an earlier, independent and properly resourced investigation.
Final contract costs are likely to lead to total overspends of more than £2.5m, because tenders consistently exceeded predicted prices.
Tenders were split into 52 contracts, but if they had been aggregated into fewer, larger contracts, the NIHE may have made significant savings, the report said.
While a number of would-be contractors were disqualified for having insufficient financial capacity, one contractor was awarded contracts worth £1.7m despite having capacity estimated by the NIHE at just £100,000.
The original decision by the NIHE to opt for gas heating itself breached guidance from the Department of Finance and Personnel on major policy changes, the report found.
The NIHE also failed to conduct robust research in its choice of heating systems, leading it to procure back boiler systems for 8,000 homes – many of which were subject to poor quality work. Eventually, it adopted wall-hung boilers instead.
A spokesman for the NIHE said that it had now addressed fully the Audit Office findings.
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