An internal banking unit for the Courts Service is not ensuring value for money for the almost £300 million it manages on behalf of 14,000 people in Northern Ireland unable to control their finances, auditors have found.
The Court Funds Office (CFO) holds and invests money for minors who have been awarded damages in the civil courts or adults who have become incapable of controlling their affairs due to mental incapacitation.
Although it spends £700,000 a year on stockbroker fees, on top of its annual operating costs of £1 million, the Northern Ireland Audit Office found that the CFO was not properly accountable.
Auditor General Kieran Donnelly said: “Current arrangements and existing legislation for managing and protecting funds in court do not ensure value for money or proper accountability for clients’ funds.
“The CFO is responsible for the stewardship of funds held under the protection of the courts on behalf of some of the most vulnerable members of our society. The interests of its clients must be at the heart of the service provided.”
The CFO is a business unit within the Northern Ireland Courts and Tribunals Service that provides judiciary approved banking and investment services.
It invests clients’ money in a number of different ways, ranging from deposit accounts with fixed interest rates to buying shares on the stock market.
The findings of the Audit Office report included:
l A modernisation programme began in 2004 to ensure that the CFO was providing a modern, flexible, cost-effective service that met the needs of clients and stakeholders. The programme is still not complete.
l None of the groups overseeing the CFO have the necessary independent financial expertise to challenge investment policies or assess quality of stockbroker advice.
l The CFO has not sought sufficient information to understand the performance of its funds.
lIt does not publish any standards to measure the quality of service it provides.
Auditors made a series of recommendations aimed at improving performance and accountability and ensuring better value for money.