Weak financial controls at the Sports Institute for Northern Ireland (SINI) that allowed an employee to steal £75,000 were condemned in an audit office report today.
The institute was established by the Sports Council of Northern Ireland and the University of Ulster in 2004 to support world class athletes and coaches.
Richard Nash was appointed as finance and corporate services manager in February 2005, but within eight months he started defrauding the organisation. Between October 2005 and August the following year he stole just over £75,000 - making payments into the bank accounts of his wife and daughter and writing cheques out for cash.
He was finally found out and given an 18-month prison sentence, suspended for two years.
In his report today comptroller and auditor general John Dowdall said the ease with which Mr Nash looted the funds of organisation presented some important lessons for the public sector in Northern Ireland.
He said the fraudster was able to commit the fraud due to a “particularly weak control environment”.
“Most damagingly, no controls were established over the Internet banking system which was used to make more than 90 per cent of the fraudulent payments,” said Mr Dowdall.
He continued: “Most significantly his obstruction of internal audit from January 2006 onwards should have been the trigger for a review of his activities."
Mr Dowdall added: “Richard Nash was able to commit the simplest of frauds, and to go undetected for nearly 10 months, due to a control environment in SINI which was so weak as to be almost non-existent."
The institute took action to freeze the assets of Mr Nash, his wife and daughter, has recovered just over £64,500, and remains committed to pursuing its outstanding losses.
The report said action has been taken to improve internal controls following the fraud.
PA