Allegations of awarding contracts to friends were made against two senior Scottish Enterprise officials several months before they were suspended, it has emerged.
Allegations of awarding contracts to friends were made against two senior Scottish Enterprise officials several months before they were suspended, it has emerged.
The Herald revealed a fortnight ago that senior skills director Charlene O'Connor and her deputy Isobel Brown had been suspended pending an internal investigation.
But a whistleblower named the women in letters to chief executive Jack Perry several months ago, and the suspension came after a third letter was sent - this time to the agency's auditors, and copied to ministers and civil servants.
The whistleblower, a training provider writing anonymously for fear of losing future work, had read the report by auditors KPMG last month into an ill-fated computerisation project which was critical of contracts worth £8m being awarded without any competition.
As this was precisely the concern raised in the original letters to Mr Perry, the writer followed up with a letter on August 24 to KPMG, copied to Audit Scotland, senior civil servants at the Scottish Government, relevant ministers and the SNP back bencher Alex Neil.
Within days of this letter being sent, both Ms O'Connor and Ms Brown were suspended and an internal investigation launched. Scottish Enterprise acknowledged the existence of the letters yesterday but insisted that the agency's own internal system checks had picked up "potential irregularities in procurement procedures and rules on conflicts of interests."
A spokesman for Charlene O'Connor and Isobel Brown said last night: "We strongly refute the allegations made in anonymous letters. We will be vigorously defending our position."
Mr Neil said: "I have spoken to Jack Perry and he has assured me that there is a thorough investigation going on into these allegations, but I think the police will probably have to be called in because of the seriousness of them.
"I should stress, however, that the people named should be presumed absolutely innocent unless or until there is any evidence to the contrary."
The whistleblower pointed out to KPMG that sister companies, Proxime and Implement, were involved in both the computerisation project and the allegations about training contracts involving Ms Brown, who was said to be a personal friend of a director of Implement.
"In reality, in excess of £6m of public funding was let without competitive tendering to the same individuals," the letter alleges.
Implement list a company address in Glasgow but only a London phone number. The company did not return our call last night. Scottish Enterprise said it would be inappropriate for the agency to comment at this time, given that an investigation is under way.
The letters come with a health warning. Apart from the question of their anonymity, there are good reasons for some training providers to resent Ms O'Connor and her deputy, given that they have been tasked with weeding out those with a poor record.
A Scottish Enterprise analysis had shown that of £94m spent in one year on training contracts, one-third had gone to providers with the worst-ranked performance.
The twist in the Scottish Enterprise story came as the government suffered defeat in a Holyrood vote on its skills strategy. It is believed Scottish Enterprise's skills functions could also transfer to the new agency at some point.
But opposition politicians attacked it during a debate, voting by 47 to 72 against the government.
MSPs also voted down amendments from Labour, the Liberal Democrats and the Conservatives. This means the parliament failed to agree a stance, so ministers will be free to proceed with their plans.
