Official Report: Minutes of Evidence

The Chairperson (Mr McCrossan): I welcome Ian Snowden, permanent secretary, and Sharon Hetherington, finance director, Department for the Economy; and Mel Higgins, principal and chief executive, and Colm McKenna, interim chair, Northern Regional College (NRC). I welcome those who have joined us in the Gallery and also Dorinnia Carville, the Comptroller and Auditor General. Stuart Stevenson, Treasury Officer of Accounts, is also with us. Stuart, you are very welcome.

Mr Snowden, as you are aware, the Committee has asked that you attend today to answer questions on delayed financial accounts from your Department and to provide the Public Accounts Committee with an explanation for being in the serious situation in which the Comptroller and Auditor General has disclaimed her audit opinion on the accounts and financial statements of Northern Regional College for 2023-24. It is of further concern that it is not the first time that the Committee has invited you to brief members on unprecedented audit opinions. That said, Mr Snowden, I invite you to make your opening remarks, and we will then proceed with members' questions. You are very welcome.

Mr Ian Snowden (Department for the Economy): Thank you, Chair. As you said, you have invited us here today to talk about two issues: my letter of 5 June advising the Committee that the Department will not be able to meet the statutory timescale for laying its 2025-26 accounts; and the Comptroller and Auditor General's disclaimer of opinion on Northern Regional College's 2023-24 annual report and accounts. The two issues are connected, which will become apparent as we go through the evidence, but I will start by talking about the college's accounts.

As the Committee knows, a disclaimer is the most serious audit opinion that the C&AG can issue. It reflects the fact that the Northern Ireland Audit Office (NIAO) has been unable to obtain sufficient evidence to support the figures in the accounts in a number of material areas. That is clearly not acceptable for any organisation that is charged with managing public money. Weaknesses in the college's financial control environment, accounting records, reconciliations, working papers and quality assurance processes meant that the auditors could not obtain the assurances that they required on certain key transactions and figures in the accounts.

The Department has been taking the matter very seriously. Almost three years ago, officials from the Department's further education and finance divisions began to work with the college to tackle the issues with the quality and timeliness of its financial information. We first became aware of concerns about those issues during the consolidation process for the Department's 2022-23 group accounts, which were the subject of a Committee session in March 2025. The intensity and nature of the Department's engagement with the college has escalated as the scale of the issues has become clearer.

We started to formally challenge the college in the summer of 2023. In November 2023, my predecessor, Mike Brennan, wrote to the principal to seek assurances from him and the governing body on a number of issues. Since the beginning of 2024, we have provided practical support from our finance team and the further education division, and we have closely monitored progress, with weekly meetings during periods when the accounts were being prepared. By the end of 2024, I was concerned that progress was not being made at the pace that we wished. We asked the college to produce a recovery plan that focused on stronger controls, clearer ownership, audit-ready working papers, improved reconciliations and better-quality assurance and governance arrangements.

I held several meetings with the college's senior leadership — the chair and members of the governing body — during the early part of 2025. By the middle of the year, however, I was not satisfied that progress was being made. To allow us to introduce to the college people with the specific skills needed to turn things around and address the financial governance issues that we were finding, I recommended to the Minister that a number of members of the governing body not be reappointed for a second term. One of those members was the then chair of the college, and I am grateful to Colm McKenna for agreeing to step into the role of chair of the governing body to assist with that effort. In the summer of 2025, I commissioned an independent review of the college's financial reporting and governance, which has proved to be very valuable. It has helped us and the college to produce an effective recovery plan. Also, I introduced an enhanced monitoring and oversight regime with monthly stocktake meetings and quarterly accountability meetings with the chair and principal, and I chair those meetings. We have seconded a Northern Ireland Civil Service finance director and senior principal accountant to the college to provide additional senior finance capability.

Those measures are now producing measurable improvements. Earlier this month, the Audit Office advised that the college's draft accounts for 2024-25 had passed their hot review process, meaning that they are of a sufficient quality to allow the audit to begin. That is a significant improvement on the quality of the financial information that was produced by the college this time last year. We are not finished on this journey, however, and still have some way to go before I can be assured, as principal accounting officer, that the improvements are embedded.

The Department has been looking at what lessons it can learn from this case and at how it oversees its arm's-length bodies. We need stronger challenge of assurances, earlier escalation on finance as other issues and risks emerge, more evidence-based monitoring of audit recommendations and, where there are problems, continued scrutiny until improvement is maintained over more than one reporting cycle. In relation to the NRC specifically, the enhanced oversight regime will remain in place until I am satisfied that there is clear evidence that the recovery is secure and sustainable. The Department is looking at its sponsorship and assurance arrangements across the further education sector with a view to incorporating best practice that other Departments have introduced.

I now turn to the Department's accounts for 2025-26. The Northern Regional College is part of the departmental accounts. Therefore, the quality and timing of its financial information affect our ability to compile and have audited our accounts within the expected timescale. The quality of the college's accounts will, therefore, have an impact on our audit opinion. The delay in completing the college's accounts for 2023-24 means that we are now behind with our statutory accounts for the year ending 31 July 2025, the component accounts that go into the Department of Finance group accounts for the 12 months ending 31 March 2026 and the college's statutory accounts for the eight months ending 31 March 2026. There is a lot of overlap in the work that will be required in the college and the Audit Office on those three separate sets of accounts. As I set out in my letter of 5 June, that means that the statutory timescale for laying the Department's group accounts by 15 November cannot be met. That is deeply frustrating for me, Sharon and the rest of the finance team in the Department, because we put a huge effort into meeting the statutory timescale last year after two years of late accounts.

My priority now is to ensure that the NRC restores effective financial management reporting, that public accountability is upheld and that the Department's own accounts are progressed within the statutory timescales on the basis of robust evidence and full transparency. We will continue to work with the college, its governing body and the Northern Ireland Audit Office to secure that outcome.

Mr Mel Higgins (Northern Regional College): For me, as the college's principal and accounting officer, it is regrettable that the highest levels of governance and reporting were not upheld for this set of accounts. I have taken steps to rectify and make improvements to the accounts' production. However, during a period of transition, the highest standards were not upheld. The college has been performing exceptionally well, with growth in enrolment and the opening of two new superb campuses. However, it encountered a higher than normal level of turnover within a small and tight finance function.

I wish to place on record that I am happy to assist the Committee fully in the matters concerning the college's accounts and the finance function, but I am not in a position to comment on personnel circumstances, employment matters or the performance of individual members of staff. I respectfully ask that any questions be directed at the institutional and governance matters that are before the Committee today.

The issues arose during a period of significant organisational change, including the departure of several long-serving staff who had substantial corporate knowledge. We were also implementing the additional requirements of the Department's accounts and delivering major capital projects to the tune of £101 million. However, the college accepts responsibility for the weaknesses identified and has sought to implement a comprehensive recovery plan. Normal reporting and controls were not adhered to during that transition period, and a number of accounting assumptions, along with relevant supporting information, were not recorded in line with procedures. The handover to the new team was not effective, and new starts were less familiar with the college systems and requirements. That created challenges for the incoming finance team and led to significant additional work to support the preparation of those financial statements to the required timelines.

Not recognising the extent of the issues to be resolved initially led to an over-optimistic view that has undermined confidence in the production of our accounts. It was assumed that the existing resources would be sufficient to deal with the backlog and revert to normal reporting requirements. The team fell behind in some areas, and it took longer to get to where we needed to be. Further resources have now been put in place to improve quality and timeliness and to provide the necessary assurances on the accuracy of the information presented. Independent assessments and reviews concluded that strengthening measures needed to be put in place along the lines of the project plans, quality assurance and improvements to financial leadership, addressing some capacity issues, retraining and strengthening processes and controls, all of which have now been incorporated into the recovery plan, which is scrutinised by the college, the Department and our governors.

The Audit Office has identified a series of shortcomings in the production of the July 2024 accounts. A number of its priority 1s have been implemented by the college, subject to audit confirmation when the July 2025 accounts are completed. The July 2025 accounts that have been submitted to the Audit Office addressed a significant number of the matters. They have been prepared and reviewed extensively, with new technical staff producing them to a higher standard. Initial feedback from the Audit Office has been that the July 2025 accounts have passed the hot review, which has allowed them to progress through audit verification. Improvement actions are being taken through an escalated process and have included rebuilding capacity and capability in the finance team; reassigning the finance function to ensure continuity and proper governance; rigorous oversight by governors and the Department; enhanced checks and quality assurance; embedding cultural improvements in the college; and delivering on the agreed time frames.

I acknowledge and accept the observations of the Northern Ireland Audit Office. I recognise the importance of maintaining robust controls and compliance standards across the college. Appropriate corrective actions are being implemented to address the issues identified, and further measures are being progressed to strengthen processes, enhance oversight and mitigate the risk of recurrence. I continue to work closely with colleagues in the Department for the Economy and our governors to implement a comprehensive programme of improvement to address the matters raised in the Audit Office report, and I remain committed to continuous improvement, effective governance and the highest levels of accountability.

The Chairperson (Mr McCrossan): Thank you, Mr Higgins.

Best wishes to you, Mr McKenna, on your most recent appointment.

Mr Colm McKenna (Northern Regional College): Thank you.

The Chairperson (Mr McCrossan): Mr Snowden, your Department is fast becoming a record-breaker in this situation, which is regrettable. This is not the first time that we have invited you before the Committee to question you on unprecedented audit opinions and seriously delayed financial accounts being laid before the Assembly. You gave assurances to the Committee on the previous occasion that we would see improvements. Your Department continues to be a significant drain on the Northern Ireland Audit Office's expertise and resources. You said that lessons have been learnt. If lessons have been learnt, why are we sitting here again, and why have you not got your Department's house in order?

Mr Snowden: Chair, we have made very significant improvements and changes to the way the accounts are dealt with, and the fact that we have managed to get the NRC's accounts through the hot review process indicates that we are moving in the right direction. Yes, the Department's overall accounts were disclaimed, and, when I was here in March 2025, I advised the Committee that there would be a number of years of disclaimed accounts flowing from the prior year's adjustments. That disclaimer will follow through. We have dealt with the issues in relation to the student loans book, which was also part of it, and there are some other issues in the accounts relating to qualifications on, for example, the postgraduate award scheme and the irregular expenditure on that, which has also been dealt with.

Having put so much effort into getting our accounts delivered on time in 2025, I very much regret finding myself in the position of having to go back and being late. It is not for want of trying on our side, but the complexity of the existing issues in the Northern Regional College gives the Audit Office and us no option but to submit the accounts late this year. I wish that it were not the case, but there is no other option available to me at the minute.

The Chairperson (Mr McCrossan): Thank you. I will open the floor to other members to follow on with questions, and I will come in later in the evidence session.

Mr Honeyford: Thank you for coming as well, Colm, and I pass on my good wishes to you in your new role.

Mr McKenna: Thank you.

Mr Honeyford: I will start with you, Ian. What do you consider to be the key governance failures at the college?

Mr Snowden: On financial management, there were lots of issues in the finance function. To the best of our ability, we collectively traced the issues back to the fact that there was a bit of a change of staff. In the early part of 2024 or thereabouts, there were a number of interim finance directors, and other people were moved in and out. At that time, the college was delivering two significant capital build projects. It relied on an experienced member of staff, who left its employ. Our assessment is that, had that person still been there, a lot of the issues would not have arisen to the same extent. Then, the college finance team got behind with its work. The independent review that we had carried out said that the team had got itself into a position where it was constantly chasing the next deadline and always attempting to catch up with work, but there was no strategic, long-term thinking about how to get out of the particular bind that it was in.

There were issues with the governing body and the way that it operated for a period in the audit and risk committee. Members of the audit and risk committee resigned from the college because they were not happy with the way that some issues were being dealt with. Our assessment was that, for a period into 2024, a number of those members of the committee did not seem to grasp the seriousness of the problems in the finance function. There is plenty of evidence in the independent review that we had carried out that information was not being provided to the audit and risk committee and the governing body and that the information that was being provided may not have been fully understood or grasped and, significantly, was not being dealt with.

That is why, in the series of measures that we have taken, we have introduced new members with appropriate governance experience. Mr McKenna, for example, was the chair of the Department's audit and risk committee for six years, so he has plenty of experience in that area and knowledge of how the audit system works in the public sector. We have also introduced senior finance capability from the Civil Service into the team to support the improvement process, and that is where we are now starting to see the impact that is coming through.

Mr Honeyford: We are going back four years. Some of those changes have been more recent. Give us the timeline from when the issue was first identified and the measures that have been taken since. All of that sounds very recent.

Mr Snowden: We first became aware of issues in August 2023 during the process of the consolidation of the annual accounts. Problems were starting to arise in the information that was being produced for the component pack for the Department's group accounts at that particular time. At that stage, Sharon, as finance director, was writing to the college to try to follow up on some of those issues, and there was a chain of correspondence with the Audit Office and the college on the timeliness and quality of the information that was being provided. Interactions were taking place between the college and us over the late summer and autumn of 2023. As I said, my predecessor wrote to the college in November 2023 seeking assurances around measures that were to be put in place to address that. Mel responded to that letter at the end of 2023, and I took up post in the Department at the beginning of December 2023.

As a corporate body, the Department first became aware that there might have been a series of issues going on in the college in about February 2024 when the audit and risk committee of the Department received a number of reports on some issues that were happening, including the exchange of letters that had taken place towards the end of the previous year. During 2024, a total of 16 exchanges of correspondence and formal meetings were recorded. Those were specifically on the subject of the quality of the accounting material that was being produced, and a series of assurances was given about actions that would be taken to achieve improvements. The role of the Department, as it is with any arm's-length body (ALB), is to oversee the functioning of the college. Our job is to ensure that it does what it needs to do in order to run effectively. Our efforts were placed on seeking assurances in that regard.

As I said in my opening statement, by the end of 2024 and early 2025, it was becoming apparent that those interventions were not having the effect that we wanted to see. We were still in the cycle that I described earlier: the finance team was chasing the next deadline and trying to get caught up, rather than thinking ahead about improvements to be made. As our interventions intensified in the early part of 2025 — I think that, at one point, Sharon had weekly meetings with the college to try to work through the details — it became apparent that some pretty fundamental procedures had stopped being done appropriately in the college. Around that time, we were also getting internal audit reports from the college that gave it unqualified satisfactory opinions on issues relating to the finance function. A board effectiveness review undertaken by the Department of Finance's consultancy services team gave the board a high rating, so there was contradictory evidence in the middle of the mix.

Our focus was on the finance function and how that was operating. By June of 2025, it was apparent to me that the previous chair and some of the members of the governing body did not have the experience or understanding necessary to drive through the changes that we needed to see in the finance function. However, that is not to say that they had not done a good job of dealing with some of the other issues that they inherited when they came into the organisation. Some improvements were made during those years on a whole range of governance fronts, but we were not seeing progress in the finance function. For example, when we asked for recovery plans, there were repeated failures to deliver them within the timescales that the college had given us. That was the point at which, in order to determine what the next steps ought to be, I commissioned that independent review, which identified all of the issues. That independent review has formed the basis of our recovery plan, and we have been implementing that since the latter part of last year.

Mr Honeyford: You said that the initial changes did not lead to improvements. Are you now assured that changes are having the desired effect?

Mr Snowden: We see plenty of evidence of that. My quarterly discussions with Mr Higgins and Mr McKenna indicate that they both grasp very clearly what the problems and issues are and what needs to be done to fix them. The involvement of the finance director whom we seconded to the college has had a massive impact on the quality of what we see coming through. Her attention to detail and commitment to making sure that everything is absolutely right have turned things around over the past six months. The quality of the material being supplied at this point from the college is very significantly improved from 12 months ago.

Mr Honeyford: Mr Higgins, this must be the third time that we have been through this. Do you, as accounting officer, accept responsibility for the disclaiming of the college's accounts?

Mr Higgins: As accounting officer and principal of the college, I accept the opinion of the Audit Office. It is regrettable that our accounts have been disclaimed. Up to this stage, we have had unqualified accounts in the college. In the previous years — July 2023 and July 2022 — those accounts were unqualified. As I mentioned, it is regrettable that, during a period of transition in the college, the accounts for July 2024 fell into the disclaimed opinion. However, with the actions that have been taken in the latter part of 2025 and into this year, significant improvements have been made to address the issues. A significant number of the priority 1s that were raised by the Audit Office have been taken forward, and implementations are in place. Likewise, the current set of accounts — July 2025 — are with audit for verification. They have passed the hot review checklist, which demonstrates that we are making improvements. We are getting feedback from our Department and the Audit Office that demonstrates clearly that we are on a path to improvement.

Mr Honeyford: You have mentioned the hot review twice. You make it sound as though passing it is a massive achievement, but that is the basic entry level of any Department. It is not something to aim for; it is the standard that should be there. You also said that you did not want to get into personalities. From your statement, it seemed that you were blaming new starts who came in because somebody had left. You do not want to talk about that, but somebody is responsible for this. It is not an achievement to get past the first rung of a ladder. There is no achievement. There is nothing to be proud of here. I am struggling to understand the dismissiveness. It is as though you are saying, "Sure, we will get it sorted". I do not get it. This lands on you.

Mr Higgins: I fully acknowledge my role as accounting officer for the college. In no way are we trying to dismiss the seriousness of the situation — in no way whatsoever. Passing the hot review is an achievement compared with where we were last year, which demonstrates —.

Mr Honeyford: Let us go back to before this. How did we get to this point? How did things deteriorate to the point where the auditor could not give an opinion?

Mr Higgins: We completed our July 2023 accounts, and they were unqualified. During the 2024 period, we experienced a changeover of particular staff. We also had the additional burden of completing reporting requirements for the Department's consolidated accounts. We were moving from six to four campuses and completing two new builds of £101 million. Some experienced staff left, and it took time to replace them. Temporary arrangements were put in place, but they did not come in immediately. It took longer than anticipated for those people to come on board. By the time that they had come on board, certain transactions had slipped and fallen behind, which had a negative impact on completing the July 2024 accounts.

Mr Honeyford: How many accountants and bookkeepers do you have in the NRC?

Mr Higgins: At that stage, there were three accountants.

Mr Honeyford: Three full-time accountants?

Mr Higgins: Three full-time accountants.

Mr Honeyford: How many people do the books?

Mr Higgins: In the finance team, there are approximately 14.

Mr Honeyford: You have 14 people, but they cannot produce the accounts.

Mr Higgins: The finance team was working on a number of areas and trying to progress key aspects that needed to be completed at that time. A backlog had developed, and, unfortunately, the team could not get ahead of that. Initial assessments did not identify how much needed to be done to complete the work. Steps have been put in place to support the team with an additional accountant and a dedicated finance director, and changes are being made in the finance function. A reorganisation also took place to reallocate roles. With that in place, improvements are being made in the finance function.

Mr Honeyford: Basically, you are saying, "We were building buildings, we had projects with substantial costs, and we got busy". You have 14 people. I just do not understand. Does that mean that we should see the NRC as a college that cannot deal with projects and other things — that you can do your function and that is it? Honestly, I do not understand the justification for it at all.

Mr Higgins: As was mentioned, at the time of the production of the accounts, the team was being stretched. There had been departures, and new people had joined. Some of those appointments were temporary. It was not until the tail end of 2024 that permanent posts were filled.

Mr Honeyford: You are the accounting officer. The buck stops with you. What review did you put in place at that point?

Mr Higgins: At that stage, I was engaging with the finance team and getting updates.

Mr Honeyford: I did not ask you whether you were engaging or getting updates. I asked you what changes you made.

Mr Higgins: At that stage, we brought in temporary support to take forward and deal with the issues. That did not have the desired effect, so, at the tail end of that year, personally, I took responsibility for the finance function and its oversight, restructured it, identified that the steps being taken were not being done quickly enough or making the necessary improvements, got an independent review completed, realigned the finance team, brought in a senior finance accountant and proceeded to bring in an interim finance director to support and take forward the changes, because the initial changes were not of the right quality or moving at the right speed.

Mr Honeyford: You increased the capacity of the finance team and brought in additional resources, but it did not change anything, ultimately, or we would not be sitting here, and the financial reporting is only now up to a standard where it can be looked at. Is the problem, therefore, not resource but leadership?

Mr Higgins: The financial leadership in the team was also reviewed. As I mentioned, we reassigned the complete finance function to a finance director, and that is making improvements in the team. There was a capability issue. That has now been addressed, and we are moving forward.

Mr Honeyford: Is there a cultural issue?

Mr Higgins: The college finance team is dedicated and wants to perform as best it can and complete all its transactions. It has been given additional support and training. A review will also be undertaken of particular job roles to make it quite clear what is required and what is expected going forward. All those steps have been taken to help and to improve the cultural arrangements and to ensure that there is no reoccurrence of that in the future.

Mr Honeyford: Is there a cultural problem? You expect everybody who is paid to do a job to do their job. That is 101 for everybody who works somewhere. I am not questioning whether people are doing their job; I am asking whether there is a cultural problem rather than a resource problem.

Mr Higgins: No. We have addressed the issues in the finance function. The team is committed and dedicated to taking forward the necessary changes and is very willing to make those changes. The team is doing that daily at the moment. We have significant buy-in from the team, and it is working with us to address the changes and improvements.

Mr Honeyford: Everyone we get in always speaks in the future tense: "We are going to do this", "We are going to do that". We are three years in, and I still do not understand why this has not been nailed a long time ago. It ultimately comes down to you. You are the officer in control.

Mr Higgins: A dedicated improvement plan is in place. It has been accepted by our governors and the Department. The external reviews are supporting the areas that needed to be dealt with. All the steps identified and the recommendations are being taking forward to make the necessary changes. We are committed to doing that at the moment. We acknowledge that there were shortcomings in 2024, but we have taken the necessary steps to address that going forward.

The Chairperson (Mr McCrossan): Thank you for that, David. It would probably be easier to say that there seems to a cultural issue with the arm's-length bodies of the Department, Mr Snowden, because it is extremely bad luck that you have had this twice now. I sincerely hope that we are not sitting here again in the near future.

Mr Gildernew: Mel, you have largely answered the first part of my question in that, at this stage, you believe that you have put in place the measures that have corrected what led to the original disclaimed accounts. Can you confirm that the financial control issues have been adequately resolved?

Mr Higgins: I can state that I am confident that the steps that we are now taking are making significant changes. The —.

Mr Gildernew: I will pause you there. That is a different thing. Are you saying that there are further steps to be taken?

Mr Higgins: The improvement plan is for a period of 12 to 18 months and beyond. Various other steps are being taken as we move forward through that period. We have been able to complete our July 2025 accounts. There is a backlog. We still have to get back on track to get the Department's March 2026 accounts completed in line with its timetable and our own component accounts for March 2026. There are various other steps still to be taken to get us fully on track, and we anticipate that that will take 18 months.

Mr Gildernew: What steps are those?

Mr Higgins: Those steps include completing the July 2025 accounts for the end of the calendar year in December, complete the Department's March 2026 components for early next year in order for the audit to commence and complete our component accounts to March 2026 and have those ready for audit verification at the start of the next calendar year. Once those are in place, we will move into completing our March 2027 accounts and getting those back on track in line with the Department's reporting next summer. In order to do that, extra steps have been taken, with the securing of the finance director's help to produce the accounts and further support from the Department to keep us ahead of the reporting requirements. I have commissioned a review of the finance function to look separately at the roles and responsibilities of individuals. The plan will then be to transfer reporting requirements back to our team to take forward for the future year, which will be the end of March 2028.

Mr Gildernew: I will park that for now. I may or may not come back to it, depending on what else we learn.

This one is for you, Colm. The governance arrangements that were in place clearly did not identify the serious deterioration of financial controls. You have been in post for a year. Good luck in your post. Tá fáilte romhat. You are very welcome there. What changes have you made since you came into post to address the deficiencies, and what assurances can you give the Committee that the governance arrangements that are now in place would have alerted the system to the problems that have emerged?

Mr McKenna: If I may, Colm, I will make a brief introductory statement that will answer all, hopefully, or, certainly, some of your questions.

I joined the governing body as interim chair at about this time last year at the request of the Department to bring oversight and governance to the college. Nearly immediately, I engaged extensively with the Department and the Audit Office in order to be clear on the current issues and discuss them with the governing body. I quickly established that the situation was one of what I refer to — I am a banker by profession by the way — as overtrading. I immediately restructured and realigned the membership of the college's subcommittees, particularly the audit and risk committee and similarly the financial improvement committee, to provide the board with clearer governance reporting lines for escalation purposes. The governing body endorsed proposals from the principal to realign roles and add capacity. I chaired the appointment process for an experienced interim finance director, whom we now have in place and who has made a huge difference, as Ian said.

The July 2024 accounts were virtually complete when I arrived last September. My role has been to provide strategic leadership and oversight of the improvements to get the college into a better place. I rely heavily on the audit and risk committee, with its new membership, to discharge its role fully and to report and escalate issues to the board. I chair the financial management oversight committee. I engage directly with the Department on improvements and report to it monthly at stocktake and accountability meetings. I make improvements to support further actions, including on resourcing.

The board fully acknowledged the issues reported by the Audit Office and the steps being taken by the leadership team to rectify the situation and return to the normal cycle of accounting and reporting. The board acknowledges that that will take time and that the necessary improvements are being made, which will be evident in the latest set of accounts that the NIAO referred to.

Implementation of improvements and recommendations is monitored through detailed analysis and tracking of progress. That is supplemented by internal audit deep dives into financial processes to provide further assurances. Throughout the past 12 months, I have worked closely with the Department, and I have sought to rebuild the confidence of the Audit Office by meeting the C&AG and directors. I will continue to do so by raising standards and embedding a culture of openness, transparency, accountability and responsibility across the college.

Mr Gildernew: On governance, and given the outstanding work that Mel talked about, are you content, within the bounds of reasonable expectation, that you are not in an interim period during which further mistakes could occur?

Mr McKenna: I have a lot more confidence, given the committee structures that we now have in place. Before my time, there was an issue — Ian referred to a couple of resignations from the governing body because there was concern — and assurances were given by the then financial leadership of the college that turned out not to be particularly safe. I am satisfied now. Our new finance director is focused on excellence. Previously, things might have got through that were considered to be OK but that turned out not to be OK when they went to the Audit Office. Our finance director has a high standard of excellence, and, if the team does not meet that standard in its work, it does not go any further. That gives the governing body huge confidence. Ian mentioned the fact that a number of governing body members did not have their terms renewed by the Minister, but the Minister approved a process, which I went through in the summer, to appoint new governors. We have appointed six new governors with very strong backgrounds who will take up their positions tomorrow. Along with the new processes that I have put in place, I am satisfied that the strengthened governing body will do a better job of the oversight function.

Mr Gildernew: OK. Turning to you, Ian, on a similar theme, are you, as the Department's accounting officer, satisfactorily assured at this time that the college is making sufficient and timely progress in addressing the deficiencies raised?

Mr Snowden: We can clearly see that progress is being made. The seconded finance director —.

Mr Gildernew: Is it sufficient? That is the piece that I am after. We are all agreed that some progress is being made. Is it sufficient?

Mr Snowden: I will come to that point now. In my opening statement, I said that I could not confidently give you a complete yes to that question until I have been able to see improvements through a couple of reporting cycles. At this point, I am taking a degree of comfort from the progress that is being made. Am I satisfied that sufficient progress has been made? No; I would need to see another period and set of improvements before I could answer that question positively.

Mr Gildernew: What eyes do you have on the situation in the interim period that would lead you to conclude that we are not going to be any better off in a couple of years' time?

Mr Snowden: We have the enhanced oversight arrangements in place. We are at a stage now where, if we were to have any more oversight over the finance functions of the college, we would have to take over the running of it ourselves. There is very close scrutiny of what takes place. There are regular meetings that go into some degree of detail. The fact that we have seconded civil servants into the finance team gives us a degree of communication and information that would allow us to see where things were not the way that we would like them to be.

We have to learn some lessons about the way in which our oversight and governance structures work. For example, I was speaking this morning to the chief inspector of schools, who also carries out education inspections of colleges. We were discussing the fact that she goes into, for example, Northern Regional College and produces very positive reports about the quality of the education that is being delivered by the college. However, that is divorced from and independent of whatever we are doing around the college's finances. The Department has to have a holistic view of what is going on there. In response to Mr Honeyford's question, I said that we were getting disparate pieces of information, some of which were suggesting that things were in good order, while others were suggesting that they were not. We need to learn how to pull all that information together and come up with a holistic arrangement.

Mr Gildernew: OK. That brings me to my final question. We have been focusing on NRC, but, given the significant impact that those issues have had and the fact that they have taken so long to emerge, does the Department consider that the governance arrangements in all the other further education colleges are robust and that there is not a potential "canary in the coalmine" effect that should have been picked up on? How has the learning here informed your approach to the other colleges?

Mr Snowden: As you can imagine, the experience with the Northern Regional College has caused us to look at the way that we have done things over the past year to 18 months. We have changed a number of things to do with the level of scrutiny of the colleges, including how we interpret some of the information that we get. We have learned a number of things. For example, we send a member of staff to attend colleges' audit and risk committee meetings as an observer, and that is quite a passive role. We are now becoming more active in how we do that. We have learned what kind of probing questions we need to ask in order to test some things out. At this point, one of the things to say is that five of the principals of the six colleges are accountants and finance directors by background. You would expect their standard of financial management to be robust. We have not seen any evidence in many of them that it is not. However, that is not the entirety of the governance that we have to look at.

The Committee will be interested to know that the Audit Office has initiated a review of the financial management of the colleges. I am assured that its report will come out before the end of this calendar year.

Mr Gildernew: Thank you.

Mr Wilson: I want to look at the wider themes in terms of resources. There appears to have been a significant resource requirement on the Department, specifically to do with overseeing all this and getting to where we are today. With that being the case, can you put a cost on that resource? As political people, we know that the public are astute in their criticism of the Assembly, the Departments and how money is spent. Given that this problem developed over a significant time, it is my view and that of the Committee that it has accrued significant cost. Are you able to put a cost on that for the Committee?

Mr Snowden: In direct costs, I mentioned the independent review that we undertook that was a detailed and forensic audit going back a number of years into how the current situation arose. The direct cost of that was £85,000. After that, the costs are all for staff time in the Department. For example, dealing with the issues at the Northern Regional College has taken up a higher proportion of my time than would be normal for any of our arm's-length bodies, but, then, that is my job. I would not say that there is an additional cost to that; it is part of my responsibilities as principal accounting officer.

Dealing overall with the accounting issues, Sharon's post, for example, is a second finance director post in the Department that was created specifically to deal with the financial accounting issues. Her team is relatively small — it has about 10 people — but that is an additional cost. If we did not have to deal with and rectify those issues, that team would not exist and those staff would be deployed to us.

Mr Wilson: That is on top of the cost of the college's system, which runs infinitely. It is a doubling of cost, really, is it not? It is oversight of what should be happening anyway.

Mr Snowden: It is an oversight function for arm's-length bodies, but, again, that is part of the Department's job. We have to make sure that we have appropriate mechanisms in place to provide the level of oversight, scrutiny and assurance that the Assembly would expect. The total amount spent on FE colleges this year is about £230 million to cover all their expenditure. Dealing with this issue is a tiny proportion of that overall budget, but there will be an additional cost in the college to strengthen its finance team. While we seconded two members of staff, the college has to cover the cost of them.

Mr Higgins: I will pick up on the point about the cost to the college. In the year to July 2024, an additional cost was incurred with the audit fee to provide the statutory requirement to complete the audit. That was approximately an additional £130,000. In the year to July 2025, with the review that we completed and the start of some additional staff, the cost was £170,000. We estimate that the cost of the extra support that is needed in the current year will be £300,000. That will reduce going forward. Those are the costs to the college for those three years.

Mr Wilson: It seems bizarre that the cost has risen to that from having in place a system that clearly was not working. What lesson have you learned from the cost of that failure, which is what it is?

Mr Higgins: The key lesson has been to build in capacity at an early stage. As I said, the team was coming off the back of preparing for consolidated accounts and dealing with the completion of two new builds at £101 million. A bit of restructuring took place before that with a voluntary exit scheme (VES), and some posts were being held to try to deliver against efficiency plans. The key lesson that has been learned is to build capacity and capability and to anticipate what is going to come down the line. That is what we are doing at the moment; building in extra capacity to get ahead of this so that we can move forward.

Mr Wilson: Focusing on the transparency aspect of the whole situation, accountability meetings are held periodically, I understand, and assurance statements are provided to the departmental accounting officer. What level of transparency was there between you both as to the issues that were being encountered? Why were they not flagged up earlier?

Mr Snowden: We get twice-yearly assurance statements from all divisions of the Department and our arm's-length bodies. This episode with Northern Regional College has flagged up the fact that those do not always identify what the significant issues are.

Mr Wilson: But those were significant.

Mr Snowden: Yes, but they did not appear as red flags or warning signals in any of the —.

Mr Wilson: Whose fault is that? Is it the fault of the person providing that? Do they have some blame, as in, "I do not want to reveal that", or, "If I do reveal it, it has consequences", or simply, "I do not think that it is a problem yet"?

Mr Snowden: I cannot get into the head of the person who always supplies the information or writes those things out. My interpretation —.

Mr Wilson: Does it go back to David's point about a problem culturally?

Mr Snowden: My assessment is that it was probably the third of those, certainly at the early stages. I will say this: our awareness of the problems did not come through those assurance statements. That is how the problems —.

Mr Wilson: They have failed as assurance statements.

Mr Snowden: Yes. They did not give me that. I am changing the nature of those assurance statements. Essentially, they are quite long tick-box exercises with about 90-something statements to be —.

Mr Wilson: Does anybody lift the phone in those processes or is it purely a paper exercise?

Mr Snowden: It is purely a paper exercise, and it is done distinct from the oversight and sponsorship teams. There is supposed to be a second line of control, in the sense that the two things are independent, and then you get distinct reports, as opposed to everything being filtered through one set of people. Alongside that, of course, we have the governance and oversight team in the further education division, which has daily contact with all the colleges. The team will be aware of things that are going on in the operation of the colleges on a day-to-day basis and have a deep awareness and understanding of what is actually happening.

Again, that system of feedback was not identifying the problems in the finance function. As an example, in the early part of 2025, when we really started to escalate what we were doing in relation to it, one of the things that we found out was that part of the challenges that we were having was that there was no recorded or written-down finance manual for the college team. People had been there for a long time, and everybody knew their job, so nothing was written down. When people left, new staff came in and recorded things in different ways, so the information being keyed into their system was not being done in a consistent fashion. That is the kind of level at which the breakdown was happening.

With the actions that we have taken to strengthen the team, part of the function that we need to get done there, as well as fixing the errors that we are finding, is to put in place the proper systems and procedures to make it work.

Mr Wilson: From Mr Higgins's perspective, for the Department's having to step in here, has it been like a ground zero scenario that it has come into? It seems as though it is a complete reconstruction of what should have been a fully functioning and accountable unit within the body.

Mr Higgins: Previously, in the earlier years, the college had unqualified accounts. In the year in question, there was significant change to improve and strengthen the internal governance arrangements as well. There no longer is the use of a single source for that. Multiple sources are now being used to give those assurances to me, the audit and risk committee, our governors and the Department. Those extra sources are now utilised in internal audits to do deep, longer dives into the finance function. There were three internal audits last year and three this year. Independent checks, quality assurances and other reviews are being undertaken to give that significant level of assurance; likewise, we have opinions from external audit and from the Department. All of that is being used, and evidence is being gathered to support all of that. Doing that seeks to demonstrate clearly a stronger assurance system in the college.

We have had to rebuild upwards. We are currently doing that, learning from those lessons, and putting in place a stronger governance reporting system supported by evidence. In the recovery plan that we submit to the Department every month, an assessment of the actions that are done is attached. The colour of those assessments does not change from amber to green unless it has been demonstrated clearly that an independent external view has been obtained on that, from internal or external audit. Likewise, in those statements, every piece of evidence to support why our classification of an activity being done is attached to prove that. We are building up a system of driven evidence to support what we are reporting against and to demonstrate how we are making changes and improvements.

Mr Wilson: In gauging those changes and improvements, I am slightly concerned that you said that you would wait for another couple of reporting periods.

I love a bit of mechanicing. To me, that sounds as though you are saying, "We'll go to the MOT, wait to see what the inspector flags up and then fix that".

Mr Snowden: No, it is not like that.

Mr Wilson: Would you be content and confident to go into another reporting period, rather than waiting on that outcome?

Mr Snowden: I have been in the Civil Service for 34 years and have gone through a number of improvement processes. Something like this does not get fixed in one go. I can pass you to Sharon, who has a lot of experience as a former finance director of an FE college that was in similar difficulties a number of years ago. She will be able to explain that it will take 18 months to 24 months to correct those things. She has experience of turning a college around. It cannot be done in one step. That is why I said that I need to be assured that those improvements are not a one-off or very much dependent on the person whom we put in to support the college; they need to be embedded in the procedures and processes of the college.

Ms Sharon Hetherington (Department for the Economy): That is important. A lot of what we are talking about is very granular financial information not being recorded in an accounting system correctly. It will take a period to address that. Although you can have an improvement project to make sure that your systems, processes and procedures are much better, we are dealing with a backlog of accounts, so we cannot change what is in the general ledger. That needs to work its way through.

Ian referred to my previous experience. My view is that, when you are dealing with that lower level of financial information in your general ledger, that will take about 18 months to fix. You want to make sure that it is fixed to the point at which it is embedded as business as usual, so that it is just how people go about their business. It takes a period for that to become the norm.

I circle back a wee bit to the assurances for the Department. The requirement to produce consolidated group accounts has given us, as a Department, a much greater insight into the financial rigour and regimes in all of our ALBs. Before there were consolidated group accounts, Departments essentially dealt with the cash position of the ALBs, whereas this means that we are getting into transaction level detail with organisations. We have had a massive three-year improvement project. Part of the issue with DFE is that we have so many components, all of which are significant, and we produce a set of accounts outside of an accounting system. That is quite a task; it requires a number of accountants to make sure that that is managed properly. I have a team that talks to each of the ALBs weekly. We have introduced interim accounts. It is kind of like what I was talking about for Northern Regional College. I want to establish a rhythm and routine that becomes business as usual. I think that we have got there in the Department, and we are working with Northern Regional College. I have seen a significant improvement in Northern Regional College. I do not want that to sound as though I am saying that it is all fine and sorted. It is not; there is still a journey to be gone on. However, given what I see in the Department, and given my previous experience, I absolutely believe that we are on the right track to solving this.

Mr Wilson: Should that give us confidence?

Ms Hetherington: Speaking as the DFE finance director, I see a recovery plan that looks realistic. The timelines in it are realistic. I know that the issue cannot be fixed overnight. It is not like flicking a switch, so the fact that it is that period — in the space that I am expecting — gives me confidence. We have put in a finance director. The communication and conversations build up your confidence from a number of sources. We have seconded two more people into that team. It is absolutely the right size. It is not a massive team that is required, but, when you are dealing with a backlog and trying to resolve business as usual, you will not be able to do that with just what you have. You need a dedicated resource to make better the thing that is wrong; otherwise, the day-to-day work will take over. You need dedicated resources to keep your eye on the vision and what you need to deliver to change something.

Mr Honeyford: Mel, you talked about quality assurance, new methods and all that stuff in your answer to Gareth. That is all great. The problem is that 11 versions of your accounts were thrown back at you, and there were two that could not even be opened. You are telling us that there is assurance and new methods, but you are the chief accounting officer, so did you not review any of that?

Mr Higgins: The initial version of the accounts that was submitted came through our committee structure. For the purposes of expediency, some of the finance staff had to produce, update and upload some of the subsequent versions to the portal. We have made it clear that, going forward, we will operate with a first draft, record all the adjustments, then have a final draft. For expediency —.

Mr Honeyford: I am asking whether you reviewed it. You just told Gareth that all these new processes are in place and that it cannot happen, yet it happened 11 times. You are the chief accounting officer. Did you review those accounts before they hit the Audit Office?

Mr Higgins: Unfortunately, I did not see all the sets of accounts that were submitted in that year. That is why we have had to restructure, realign and take steps to strengthen the finance team. As a result of that, we have a finance —.

Mr Honeyford: Is that the finance team's fault or your fault?

Mr Higgins: I was relying on being advised by the finance function. I was not aware that all those submissions had gone to the Audit Office.

Mr Honeyford: OK.

Mr Gildernew: I will also follow up on something that Gareth touched on. We heard from you that part of the problem was people leaving and the new people coming in not being aware. There was no continuity manual, and people started doing things differently, in a way that did not align. There is a continuity planning and procedures issue in NRC. Has that been corrected in NRC? Equally importantly, has it been checked in the other colleges? Has that been cascaded down to them? Have you inspected to see that they have continuity plans in place? Have you built that into your governance checks? There are two sets of failings here: the college's failing and the fact that you never picked up on it. Have you built that into fundamental procedures? That is only one element, but a very understandable element, of how things could go wrong.

Mr Snowden: I will let Mel speak to what they have done to put procedures in place in Northern Regional College, but you can take a degree of assurance from the fact that we brought in assistance from other colleges to help Northern Regional College try to put the systems in place. Drawing on those colleges' best practice and procedures, which are robust, is part of how we were seeking to respond to that before we seconded in the finance director. Now, we —.

Mr Gildernew: Ian, are you telling me that you know specifically that the other colleges have continuity planning in place and that you then brought them into advise NRC?

Mr Snowden: That is a slightly different question.

Mr Gildernew: That is the question that I want answered. It is not actually different; it is still my same question.

Mr Snowden: On the issue of continuity of staff members, none of the colleges has a very large team. Finance teams number at around a dozen members of staff. Mel's might be one of the largest at the minute, because we are trying to work through those issues. Typically, however, there are 11, 12 or 13 people in a college finance team. In such a small team, there is frequently a risk of losing a key member of staff and there being a problem. We can take assurance — this is where the procedures are important — from the fact that it should be possible for a member of staff to leave a team like that, for them to be replaced by somebody else with appropriate qualifications, and for that person to pick up the processes that are applied in that organisation. That is how we would —.

Mr Gildernew: I agree that that should be possible. I am asking whether it is possible. Is a system now in place in each of the colleges whereby, if somebody goes off unexpectedly and a new member of staff comes in, there will be continuity?

Mr Snowden: The colleges have the procedures in place that would allow for that continuity to happen. That was quite a long-winded way to answer your question. Yes, because the procedures are in place, there is a continuity arrangement that will allow the problem that happened to be avoided.

Mr Gildernew: I am saying that that has clearly been a factor. Let us make sure that that factor is addressed in the other colleges before one of them develops the same problem. Will you now include that in your inspection of your arm's-length bodies? Have you a continuity plan?

Mr Snowden: We are working through a reform programme called Further Education: Fit for the Future. It is not about structural change or anything like that; it is about taking the best practice, in education and in administration and finance, at each of the colleges and applying it more generally across the sector. One of the things that we are looking at is how to consolidate some back-office functions to make them more efficient and more robust. We may end up with a single finance function for the whole FE sector, which would address those problems and make it less likely that they will occur. It will take a couple of years to work all of that through. It is a process, and we have to work through the detail of it, but that is the direction that we are looking in to make sure that the system is more robust.

Ms Hetherington: Procedures are really important, but, sitting alongside procedures, there is a layer of experience in a team that makes a handover work well. At Northern Regional College in that time, there was an excessive churn of staff, particularly in 2024. We knew that Northern Regional College was trying to recruit, but it was just reflective of the market for getting accountants at the time. Even though we looked at procedures and at continuity, having really high staff turnover made it challenging. Of course it is better to have procedures, but that was a challenging time.

Mr Gildernew: I think that you are overcomplicating it. All I am really asking is this: we now know that that was a factor, so have you emailed the other colleges to say, "A learning point has emerged here"? Experience can sometimes overtake procedure, because people know it so well. Procedure can fail, albeit it is important that it be there. Are you updating, in real time and as you go along, the other colleges on the learning that is coming out of this on the simple stuff?

Mr Snowden: I would not rely on doing something as simple as sending an email or a letter about this.

Mr Gildernew: Right. What do you do?

Mr Snowden: If it were as simple as that, I could say, "Yes, we've done that", but that is superficial. I am more concerned about making sure that the true learning is taken and applied in colleges. We have regular meetings involving all the colleges at which we discuss governance. At a meeting that I attended before the summer, we went through a number of the issues. There are plenty of things that we can do, and will continue to do, that go beyond my saying, "I've done my duty, because I've sent a letter to everybody".

Mr Gildernew: I am not saying that that would be your duty discharged. All I am saying is that you have identified an issue that could be relevant to other colleges, so let them know that it is an issue. We should not wait until we know everything that went wrong before we go to the colleges. When we learn things, we should share them.

Mr Higgins: With the extra support through Sharon's team — those individuals will join us shortly — alongside a specialist individual from one of the other colleges, we intend to deliver training. Having identified with our finance director the very point that you made, once our team has done the training, we will offer it across the colleges so that the lessons from our college are learned. It will cover all the issues and difficulties that we have encountered. It will be delivered by the sector and some of the DFE people who are coming to join us. We will pass that knowledge on, making it clear to the other colleges how we overcame the issues that we encountered and making them mindful of planning their accounts production accordingly as they go forward. That will take place shortly.

Mr Gildernew: OK. Thank you.

The Chairperson (Mr McCrossan): Ian, does your Department have 16 ALBs or 20?

Mr Snowden: Seventeen.

The Chairperson (Mr McCrossan): OK. The colleges are part of one of them. Is there knowledge of any skeletons in any other ALBs that will potentially come out in the next year, or are you satisfied that all the others are doing what they should be in their accounts? We have been here with student loans, and now we are here with this. Is anything else coming down the tracks?

Mr Snowden: We have not seen any evidence that there are problems to be concerned about in other areas. Some ALBs provide us with a potentially excessive, disproportionate level of detail about small errors. I will give just one example. In the Civil Service, we do not take out insurance, because the Government are supposed to be self-insuring, but Invest NI buys travel insurance when it sends trade delegations overseas. If you are going to buy insurance, you are supposed to get the approval of the Department of Finance first in all circumstances. Invest NI will raise things. For example, it will say, "We spent £900 on insurance and did not get DOF approval first". Invest NI reports to us on a very low level of mistakes that they have made. Lots of organisations provide those kinds of reports to us regularly. I cannot put my hand on my heart and say that there are no red flags, because we do not know what we do not know, but, at this point, we see no red flags to give us reasons to be concerned in the financial realm. That is not to say that there are no issues in the governance arrangements and structures of other organisations. For example, Southern Regional College is without a chair at the minute. We are having to go through a process of putting an emergency chair in place. We continually deal with such governance arrangements in all our arm's-length bodies.

The Chairperson (Mr McCrossan): OK. If you would keep us informed as things arise, that would be helpful.

Mr T Buchanan: A lot of the issues have been thrashed out, but, Ian, when you wrote to the chief executive of Northern Regional College requesting robust financial information and audit-quality supporting information to be provided within a certain time frame, it neither came within that time frame nor was of sufficient quality. Did that raise a red flag?

Mr Snowden: Yes. Are you referring to a letter that my predecessor sent, in November 2023, or the one that I sent subsequently, the following year? Either way, it was a concern for us. It was a frustration in the sense that we had asked the governing body, throughout the first half of 2025, to produce a recovery plan. Dates were provided by which a recovery plan was to be made available to us, and those deadlines were not met. Ultimately, that is what led to my recommendation to the Minister that we should not renew the terms of appointment of a number of members of the governing body, including the chair at the time, and then attempt to bring in people with the experience, the background and the skills to drive that action forward. Yes, it raised red flags, and we have escalated the action throughout the past couple of years in response to what we found at each stage.

Mr T Buchanan: When the problem was identified, why did it take so long to put robust action in place to deal with it? Surely it was a matter of urgency that needed to be dealt with swiftly. Why did it take so long to get that done?

Mr Snowden: The Department's role is to put in place the boards of our arm's-length bodies who will govern the activities of their arm's-length body in line with the Minister's policy directions. The boards then appoint the executive teams and hold them to account. That is the arm's-length bodies arrangement. Having put that structure in place, our expectation is that, if we identify issues and raise them with the governing body or board of an arm's-length body, it will take action to address them. As I said, our initial step is to say, "We've identified this problem. You need to fix it". We then ask, "Have you fixed it? Tell us when you're going to fix it. What have you done so far?". We keep pressing through the stages of pursuing and chasing up the issue to see what action is being taken. We make the decision to move to the next stage of intervention only if we do not get satisfaction from that. Otherwise, we end up, in effect, running the arm's-length bodies ourselves, at which point we do not need to have governing bodies or boards of directors of the arm's-length bodies, which come with an overhead of cost. That is the function of our oversight. There has to be an escalation process.

I said that we had learned lessons and taken best practice from other Departments. The Department of Health has introduced a system for the health and social care trusts when things such as this arise. It has a five-stage escalation process that formalises when the Department moves to the next stage, depending on what it sees, and when it can come back down if it sees improvements. That kind of structured arrangement would have helped us in the NRC case. If we had had that in place, we might have moved a bit faster towards the position that we are currently in. However, to be honest, I am not entirely sure that it would have happened in that way, because we have to work through the steps of giving the college the opportunity to correct the mistakes. It is the governing body's responsibility and that of the executive team to do that.

Mr T Buchanan: Given what you have been through with Northern Regional College, are you satisfied that the arm's-length bodies in your Department can deliver what they are meant to deliver?

Mr Snowden: Yes, I think, is the answer. Within the resources that we are able to allocate to them from our budget allocation, they are performing well. We get annual reports on the outputs and outcomes that they produce. For example, we can see from Invest NI's performance reports that it has supported the highest number of investments into Northern Ireland in more than a decade; Tourism NI is producing high levels of tourism expenditure and has been a very effective organisation; over the past two decades, Northern Ireland Screen has led on the delivery, from basically nothing, of a very large screen and creative industries sector in Northern Ireland; the colleges receive positive reports from the Education and Training Inspectorate (ETI) on the quality of education that they deliver; and we have high-performing smaller organisations such as the Consumer Council. There is plenty of evidence that the arm's-length bodies are performing. There was never any question about the quality of what was being delivered by Northern Regional College; the problem was always the quality of the financial management underneath that, which meant that we could not be assured that money was being spent most effectively to get value for money, and we could not rule out the possibility that fraud or error could be going on, undetected.

Mr T Buchanan: Are you satisfied that the governing bodies in the colleges specifically are of sufficient quality to deliver and to not run into the situation that Northern Regional College ran into?

Mr Snowden: Every year, we have a process of performance assessments for all the chairs and chief executives, during which they are assessed against a number of criteria. Nobody has been found to be unsatisfactory, and some people are very good and constructive in their roles. We have to look at the circumstances in each college and determine whether those people have the right balance of skills to take the college to the next step when a different set of appointments is being made. A live competition for the chairs of a number of regional colleges is running at the minute. Colm is currently interim chair, so his is one of the posts that is out for recruitment. As I mentioned, the position of chair of Southern Regional College is also vacant. A number of chair appointments are under way. We have a set of criteria, person specifications and skills that we require for both chairs and governing body members. There is an open and competitive process to appoint people to those positions. At this point, we are satisfied that we have the range of skills that we require across the colleges.

Mr T Buchanan: Thank you.

The Chairperson (Mr McCrossan): Ian, the Committee recognises the fact that the extremely serious issues of weaknesses in financial control and production of quality accounts will take some time to rectify; you have said that previously, and you are saying so now, and we understand that. We welcome the actions that have been taken and those that are under way to address the concerns that have been raised. Given how significant those issues have become in NRC and the Department for the Economy, however, I suggest that the proof of the pudding is in the eating with regard to whether your actions have been effective and successful: that will be determined by whether the audit that the Northern Ireland Audit Office carries out this year is able to report positively on progress on timelines and the quality of those reports. These audit opinions are of such significance and are so rare that this Committee and our successor Committee will continue to monitor the audit reports closely. I ask that you keep the Public Accounts Committee updated on the effectiveness of the actions that you are taking, as we continue to receive the audited financial statements.

Mr Snowden: I will do that.

The Chairperson (Mr McCrossan): I thank the three of you for being with us. Before I let you go — it is very warm in this room, actually —.

The Committee Clerk: There are four.

The Chairperson (Mr McCrossan): Four.

Mr Gildernew: Maybe he is not going to let them all go.

The Chairperson (Mr McCrossan): It is not your accounting but mine that there might be something wrong with. [Laughter.]

Sorry: the four of you.

Mr Gildernew: Is Dorinnia one of them?

The Chairperson (Mr McCrossan): It is very warm in this room. [Laughter.]

Dorinnia, is there anything that you would like to add?

Ms Dorinnia Carville (Northern Ireland Audit Office): It is important to say that I concur with the evidence that you have heard. The set of accounts that NRC submitted this year has, in fact, passed our hot review checklist. The audit is under way, and we hope to conclude it in December. That will be laid before the House once we are in a position to do so. You will be updated automatically once that process is complete.

The Chairperson (Mr McCrossan): Thank you. Stuart?

Mr Stuart Stevenson (Department of Finance): I thank the Committee for keeping a focus on this episode and on the wider financial reporting arena. The statutory deadlines for the laying of accounts are very important when it comes to openness and transparency. Overall, NI has a good reputation, but there are issues around this particular topic. I know that it is frustrating that we have now had several witness sessions on the topic. It will take some years for it to completely unwind, but the focus sends an important message regarding where our standards of public-sector financial reporting are, and I thank the Committee for that.

The Chairperson (Mr McCrossan): Thank you, Stuart. The message is quite clear, I think: we understand the complexity of the challenges that you face, but we want to see lessons being learned, and that those mistakes are not repeated by other arm's-length bodies, or, indeed, within the Department. I thank the four of you for being here with us for a lengthy period today, and wish you well, Colm, in your role of trying to rectify this.