A damning verdict on the way the north-east’s biggest concert and conference venue is run can be revealed today in a secret report to councillors.
Auditors gave a scathing assessment of how Aberdeen Exhibition and Conference Centre (AECC) operates.
They highlighted an unauthorised £1.3million overspend of public money on a failed hotel project at the Bridge of Don site.
And they described the centre’s lack of accountability to taxpayers and the city council as a “critical” risk.
The confidential report, seen by the Press and Journal last night, raises questions about the centre’s management, board of directors and Aberdeen City Council.
A raft of recommendations to tighten up the way the venue is run will be considered in private by councillors at a meeting next week.
AECC board chairman Neil Fletcher revealed last night that he would stand down next month and be replaced by Ed Gillespie, the former chairman of Aberdeen’s Glencraft furniture factory.
It was previously agreed that he would relinquish the chairman’s role to a non-council member.
Aberdeen City Council’s auditors – PriceWaterhouse-Coopers – were sent in to carry out a wide-ranging investigation into the running of the AECC in August.
The inquiry was launched after £2.3million of public money was written off in the wake of the council’s decision to take over the failed hotel venture at the site.
The auditors found:
Monitoring of the hotel project by the AECC board was “weak” – the directors approved £1million but £2.3million was spent.
Only £184,000 of the total was subjected to market testing to ensure best value for money, and no contracts were in place with key parties.
Overall control of the AECC was “weak” and lack of accountability to the council a “critical” risk.
The report also warned a “significant improvement” in profitability was needed for the AECC to repay £27.7million in loans to the council in 2017 and 2021.
Managing director Brian Horsburgh welcomed the report.
He said: “The AECC will implement its recommendations when directed by the AECC board.
“The report does concentrate more on the negatives and there has been a lot of positives.
“The AECC board does a good job within the constraints it is in.”
Mr Fletcher also said he welcomed the report.
“Many of the recommendations affecting the AECC are already being carried out,” he said.
“When I took over as chairman in 2007, I set as my main objective to ensure that the AECC operated within a defined revenue subsidy, and no longer built up annual operational deficits.
“This has been achieved, and the efforts of Brian Horsburgh and Graeme Cumming as finance director should be applauded for this massive turnaround.”
Mr Fletcher said he had been “uncomfortable” about the relationship between the AECC board and the council since he became a director in 2003.
He said Mr Gillespie will take over as chairman from next month when new directors posts would be advertised as well.
“I sincerely hope that the appointment of an independent chairperson will bring an end to Aberdeen politicians fighting amongst themselves over the investment required to bring some £80million per year into our economy through the activities of the AECC,” he said.
Aberdeen City Council’s corporate governance director, Stewart Carruth, said: “Work has already started on measures being put in place to address these findings.”