A report undertaken by the Comptroller and Auditor General (C&AG), the state’s auditor, has revealed significant issues surrounding two major property purchases made by the University of Limerick (UL).
The report released last week, shone light on two major purchases in 2019 and 2023 which were carried out without proper due diligence.
In one case in 2019, the C&AG report revealed that the university purchased a site at Honan’s Quay in Limerick City without carrying out a valuation of the property in violation of the State’s public spending code.
Initially the site was hoped to be purchased at a cost of €3m but over the course of seven months, this price increased to over €8m.
The initial suggested offer of €3m had been based on the amount paid for similar properties at the time. The report, however, revealed that a “succession of progressively increasing offer amounts were referenced in emails received by the President and Deputy President between September 2018 and April 2019”.
Following negotiations after the university’s first formal offer of €6.5m for the site, the purchase was made at a cost of €8m. In addition to this, UL paid €343,000 in order to cover the tax liabilities of the site’s seller. The purchase saw the university pay over €3m more than the site’s actual value.
The report also details a serious lack of planning on the institution’s behalf. Prior to the purchase, and still five years later, the university has not formed a strategy for the development of the site at Honan’s Quay.
In an attempt to ensure the proper use of public funds, UL contains a body, the Finance, Human Resource and Asset Management Committee (FHRAMC), responsible for ensuring clarity and due diligence. The C&AG’s report has revealed that this body was bypassed and left out of negotiations for the site’s purchase.
When contacted for a comment surrounding the issues with the site’s acquisition as well as details in regard to the site’s future, UL did not respond.
The C&AG’s report also provides worrying details surrounding UL’s purchase of 20 student houses in 2023.
Here the report describes a lack of an objective appraisal for the homes which again resulted in a breach of the state’s public spending code. The report describes how the homes were purchased at a cost of €12m, or approximately €600,000 each. This purchase represented an overspend of approximately 100% with UL having paid twice the value of the homes in question.
In addition to this, the university failed to acquire the planning permission required to change the property’s residential use to that of student accommodation. The report provides details of a letter sent to the university by Limerick City Council which stated that a move to change the homes’ usage may “represent an unauthorised development”.
The report highlights a variety of other issues with the purchases including failures to account for the cost of the properties’ stamp duties. In the case of the twenty student houses, this resulted in an additional €1m of unexpected fees. There is also evidence of key information having been withheld from members of the university’s board.
Speaking on the matter, the Chair of the Oireachtas Public Accounts Committee Brian Stanley TD described the report as “shocking”.
In a statement following the report’s findings, UL President Dr Shane Kilcommins expressed his disappointment and stated that the university would implement the report’s recommendations with haste.
