Donegal County Council's audit committee is recommending that no decision be taken to extend the consultancy contract with One Sigma Ltd. until an independent evaluation of the Whole System of Work project has been completed and presented to council.
Between 2004 and 2009, One Sigma was paid almost 1.6 million euro for services which came under scrutiny when the Local Government Auditor found they hadn't been tendered for.
The current contract with One Sigma ends at the end of this month.
Last month, Donegal County Council's audit committee met for the first time in a year. Next Tuesday, it will meet for the second time in four weeks. The renewed activity stems from the Local Government Auditor's concerns about the council's reform programme, and the fact that two consultants attached to One Sigma were paid considerable amounts for services which had not gone out to tender.
Earlier this year, County Manager Michael Mc Loone explained this was because the two men had developed the Whole System of Work which he was using as the basis for reform of the council's structures, and their expertise was not available elsewhere.
One outstanding issue which does not seem to have been fully resolved is that of intellectual rights relating to the Whole System of Work model, which One Sigma continue to own. This is cited by the council's internal auditor, who notes, in a report dated October 2009 and presented to members this week, that a request for correspondence relating to the system took six months to be acceeded to because of the intellectual property rights issue.
The internal audit went on to question the amount paid to One Sigma, particularly asking why monthly payments rose by 50% from €20,000 to €30,000 in May 2006, with no clear explanation offered as to why. The payments were initially recorded as being for consultancy services, but that was changed to Research and Development in November 2008.
The internal auditor calls for a full and comprehensive review of whether or not value for money has been agreed. The audit committee makes no comment on value for money, saying it is not within its remit to offer a view. However, it does express concern that much of the tacit knowledge relating to the council's organisational development project rests with One Sigma, and this poses a risk to the council, particularly as so many senior managers, including Michael Mc Loone are retiring.
The committee says if it's decided to continue with the project, it's vital that appropriate training be provided for senior management and key staff.