Billy Bell: Chairman of the Public Accounts Committee

Speaking during the debate, the chairman of the PAC, Billy Bell, said such frauds were unacceptable.

"To have one major fraud could be described as unfortunate," said the Ulster Unionist Party assembly member.

"For a further set of frauds to occur within a short period quite honestly, it smacks of incompetence."

Alliance Party assembly member Seamus Close, who is a member of the committee, said he could not understand how the frauds had been allowed to happen.

"I might live in the Lagan Valley constituency but I did not come down the Lagan in a bubble," he said.

Investigation

"It is beyond comprehension that with that catalogue of events that you still think, oh inefficiency, nothing to do with fraud.

"Why would you give someone the benefit of the doubt after that catalogue of events?"

At the time, LEDU held an investigation into how the fraud occurred and what might be done to prevent it happening again.

A number of failings were highlighted by this report.

However, subsequently the staff member who spotted the initial fraud himself perpetrated frauds totalling �40,000 - and attempted frauds totalling another �60,000 between 1998 and 2000.

Weaknesses

Both individuals were later charged and sentenced to jail terms.

Although LEDU introduced new control procedures following the first incident, a report by the public spending watchdog, the Northern Ireland Audit Office, was highly critical of LEDU's procedures.

It said many of the weaknesses highlighted by the first case were present in the second and that LEDU failed to implement guidance given by the department's own auditors.

It is the second time this week that the Public Accounts Committee is hearing cases of fraud.

On Tuesday, the committee criticised a huge increase in compensation payments being made for brucellosis infected cattle in Northern Ireland.

It said it was greatly concerned at the increased payments and the evidence that some farmers were deliberately infecting their herds.