Charter NI: 'Root and branch' reform of funding needed
The Ulster Unionist Party leader has said the National Audit Office should examine the awarding of public money by the Social Investment Fund.
It has emerged that Charter NI was represented on the east Belfast steering group which awarded £1.7m public money to the organisation.
The Charter NI representative was Sam White, a former UDA member.
Charter NI has been at the centre of controversy after comments by its CEO, Dee Stitt, to the Guardian newspaper.
No vote took place about the allocation of the funds to Charter NI.
UUP leader Mike Nesbitt described the allocation of money by the Social Investment Fund as a "scandal" for the Northern Ireland Executive.
"I think there needs to be a root and branch review and I think it is so serious that we need an external body like the National Audit Office to come in and take a look," he said.
Sir Alistair Graham, who is the former chairman of the committee for standards in public life, described the SIF grant process as "flawed" and said there is a clear conflict of interest in the system.
First Minister Arlene Foster said the criticism was disappointing.
"It is disappointing that when we do try and do something different, something innovative to try and make a difference and deliver on the ground that this is the attitude that is brought forward," she said.
"We're focused on delivery, we're not focused on process issues and people can look at those process issues, because we have absolutely nothing to hide."
The Executive Office says the process of allocating money by the SIF was established after a full public consultation.
According to the executive, a "formal vote was usually not necessary" in deciding which organisations should get funding.
The Social Investment Fund was set up by the previous Stormont Executive which included members of all five major political parties in Northern Ireland.
The fund supports a range of projects across Northern Ireland, from improving employability, reducing fuel poverty and education and early years initiatives.
In total, the fund amounts to £80m of Northern Ireland taxpayers' money. The BBC's Nolan Show has been investigating how that money is distributed.
The former first minister, Peter Robinson, and the current deputy first minister, Martin McGuinness, appointed people to steering groups which would decide who would oversee projects to regenerate local communities.
But the Nolan Show has revealed that the steering group members can allocate funding to their own organisations.
The Executive Office does not perform any background checks on the staff employed by the lead partner.
Mr McGuinness said reputational damage was being done to worthwhile social investment projects as a result of the UDA leader's involvement.
There has been speculation surrounding Mr Stitt since he told the Guardian newspaper that his band, the North Down Defenders, were like "homeland security".
Mr Stitt denies he is a UDA leader.