How could this happen?

Clearly the power to cut funding or not is within the mandate of the committee, so while people may not agree with the decision, it did not breach any rules in making it.

Where I think there should have been consultation was over the magnitude and timing of the cuts. I am sure that the recipients would have still been disappointed and would have understandably argued against them, but they would have least had input into ensuring the pain was as small and manageable as possible, possibly accepting some phased reduction.

The other mistake I think the committee made was not fully explaining why. As a committee with limited resources and a responsibility for economic growth it may well be that there are other areas which, if funded, could create greater economic growth. Directing funding to those areas would make sense, but their silence means that we just do not know where they were going to use the money, nor what benefits could have resulted.

Nobody should be surprised at the backlash created by the announcement. Two of the more interesting interventions were those by the presidents of Health and Education, who understandably made the points that sport keeps people healthy while the arts form part of our culture.

In a way, this is where things get a little messy. If the reasoning for the grants is more than economic development, there is an argument that the budgets of Health and Education, Sport & Culture should bear some of the cost.

Generally, we all want efficient government and we can debate whether issuing grants from three budgets is significantly less efficient than one, but we were in a position where the reasons put forward by the two presidents for the grants are outside of the mandate of the committee making the grant. Further, if, as Economic Development suggested, the economy can derive greater benefit from spending the money elsewhere, then we are in the strange position of a committee spending money in a way that it believes to be sub-optimal for progressing its mandate.

I was not surprised by the other two presidents’ criticism. A cynical person may suggest it is easy to spend another committee’s budget and I may be being unfair in pointing out that, as far as I know, neither offered to replace the funding.

Perhaps, had Economic Development at least spoken to the two committees, they might have been more understanding.

The resignation of a president cannot go un-commented on and I see two separate issues here, the possible conflict issue and a governance issue. It is the latter that is worth considering, because at the time of writing it has gone virtually unnoticed.

We know that the Office of the Public Trustee comes under the Committee for Economic Development. Not only does this mean that the committee is politically accountable, it is also financially accountable. There is one line in its accounts and budget relating to the Public Trustee.

The actual expenditure for 2016 was £26,000, while the budget for 2017 was £20,000. Hence why the Public Trustee needs authority to spend more than £20,000 – there is no budget for any higher spending.

Hold on a minute. The budget is only £20,000, so how did the Public Trustee spend around £300,000? I am not questioning whether or not spending such monies was needed or justifiable, what I am questioning is how the magnitude of these payments was not picked up earlier.

The Trustee’s budget is held by the committee and presumably all of its expenditure is paid by the central finance section of P&R at Sir Charles Frossard House – I doubt if anybody at Raymond Falla House has a pile of cheque books.

In general, the way payments are processed is that two signatories are needed and all payments are allocated to an expense category which is linked to a budget – it should be impossible to make a payment without identifying the expense category and therefore the budget the payment belongs to.

So, one question which the internal audit report needs to address is why did management at P&R not identify that these payments were in excess of the £20,000 budget as they were being paid?

There is one scenario where it is possible for P&R not to identify the budget-busting amount until it was too late, which is if the full £300,000 was billed by the law firm as a single amount. In such a case, nobody other than the Public Trustee would be aware that the total exceeds budget until the invoice is received, by which time it is too late.

If the £300,000 was paid in a number of amounts, then as soon as the amount went above the £20,000 warning flags should have been waving and no further payment made until the matter had been raised with the committee. Surely such reports exist.

Which brings us to the committee. As with my comment about P&R management, if the amount was paid in one sum, then it is possible that nothing would show up on the finance reports. But even then, normal financial reporting practice is for budget holders to regularly predict their total expenditure, so whoever was compiling the committee’s reports should have liaised with the trustee.

Also, how likely is it that the law firm billed such a large amount as a single bill? Hopefully the internal audit report will provide the answer.

If, however, there were a number of payments, then the fact the budget was being exceeded should have been identified by the finance staff working for the committee – whose management reporting lines are, I think, to P&R. If this is the case, why was it not reported to the committee and its senior management?

It is understandable, but unfortunate, that the resignation of Deputy Ferbrache is the focus of this issue because the apparent ease by which a budget can be exceeded, or more accurately, totally blown apart, does raise serious questions about the financial controls within the States.

While there is no suggestion of any fraud in this case, I assume that there was a very good reason for the spending.

The Lagan payment was as a result of poor controls and procedures, at which time the public was assured that all of the financial controls would be upgraded, but here we are with a situation where a budget has been exceeded by a whopping 1,500%.

Let’s hope the internal audit report is produced quickly and provides clarity as to how this was allowed to happen and whether there were control failures, ideally before the election of a new president.

If there were poor budgetary controls within the committee, there may follow questions as to who of the existing members is not suitable to be the new president.

Whatever is reported, we can all be comforted that ‘lessons will be learned’. Aren’t they always?