NIPS Annual Report and Accounts 2012-13 - Department of Justice

ANNUAL
REPORT
and Accounts
20. Contingent liabilities disclosed under
IAS 37
At the year end the Northern Ireland Prison Service
has estimated contingent liabilities of £672k
(2011-12: £856k) in respect of litigation claims
against the Northern Ireland Prison Service. These
claims relate to legal claims against the Northern
Ireland Prison Service by staff, prisoners and third
parties for injuries and other damages including fair
employment and industrial tribunal cases. They have
not been provided for in the financial statements as
the Northern Ireland Prison Service considers that it
is not probable that they will be successful.
A contingent liability has also arisen in 2012-13
with respect to 27 members of staff who have
applied to leave the service under the terms of the
Voluntary Early Retirement (VER) Scheme. These
staff have been advised that their applications are
still under consideration but had not been selected
for departure as at this financial year end. No
obligation has arisen for these employees and no
provision has been made for potential payments due
to these individuals on departure from the service
in the financial statements of NIPS in the 2012-13
financial year. They have been advised that the VER
scheme panel will consider their applications again
in due course.
Until such times as this review has taken place and
some or all of those staff have been offered early
retirement NIPS will disclose this possible obligation
as a contingent liability; however the amount of
the obligation cannot be measured with sufficient
reliability.
21. Losses and special payments
(a) Losses
During 2012-13 losses payments were made in 9
cases (2011-12: 7). The total amount paid in these
cases was £6k (2011-12: £10k).
(b) Special Payments
Included in the provision note (Note 16) are special
payments. Amounts utilised during the year
included 109 compensation payments (2011-12:
133) totalling £560k (2011-12: £593k). There were
no individual payments exceeding £250k.
(c) Other notes
Over claiming and subsequent overpayments to a
single building contractor have been identified over
a five year period since 2002. Following a review of
internal procedures in 2007 the over claiming was
identified and remedial action taken immediately.
This case is currently the subject of arbitration
proceedings to recover the monies. (A total of
£130k is being retained on invoices submitted until
resolution).
A wider review identified two other contractors
who similarly have been over claiming on invoices
over a five year period since 2002. A total of £314k
is being withheld by the Northern Ireland Prison
Service on invoices submitted until resolution. DFP
approved the retention of unpaid invoices in full
settlement of both contractor cases. One contractor
has agreed with this approach and the case against
them is now closed. The remaining contractor
declined to settle on the terms offered and the case
is now subject to ongoing legal action to conclude
matters.
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