Cianan Brennan: Delays spur PAC on to get to the bottom of University of Limerick's dealings
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On May 25, 2019 the University of Limerick (UL) sent a press release celebrating a “major leap forward” in its provision of educational amenities to the city.
Its then president, Des Fitzgerald, announced that the university had formally signed contracts to acquire the 5,500 sq m former Dunnes Stores shopping centre at Sarsfield Bridge in the city, setting the scene for the construction of a new UL city centre campus.
“Connecting this campus with the city has been a dream for everybody associated with the university for years,” he said at the time.
Twelve months later, almost to the day, Mr Fitzgerald resigned as president suddenly, citing personal health concerns relating to the Covid-19 pandemic, which was then in its early months. His salary continued to be paid until the end of the year, though he served out just two months of his six-month notice period.
His departure was a surprise, and came at a time when the university’s governance had been under scrutiny for several years, including in the significant 2017 Thorn Report into the handling of protected disclosures concerning the university’s financial governance, and by a 2018 Comptroller and Auditor General report which found that UL agreed €1.2m in ad hoc pension arrangements for two senior officials with no supporting documentation or contracts.
The €8m acquisition of the Dunnes site, however, may yet prove to be the straw that broke the camel’s back.
Mr Fitzgerald paid tribute to Dunnes back in May 2019 for the manner in which they had “facilitated” the deal.
Going by what we know now, you can perhaps understand why the retailer might have been so keen to facilitate it, given that they got a price more than twice the cost of a previous valuation carried out by the local authority just two years before.
At that time, Limerick City and County Council valued the building at €3.5m. UL did not commission an independent valuation, a key form of due diligence, of the site before embarking on its purchase.
How UL came to pay such a high price for the Dunnes site has been the subject of much speculation, particularly given that, immediately prior to acquiring the site, it had been in lengthy talks regarding the prospective purchase of the Opera site elsewhere in the city, which at the time had stood idle for 20 years.
The Opera site is now the subject of a €200m commercial development which will, when completed, be capable of employing 3,000 people on a 450,000 sq ft campus, though it was previously reported that works were five months behind schedule due to the Covid-19 pandemic.
UL submitted a 58-page application for funding from the Higher Education Authority on April 2, 2019, to facilitate the building of a new campus.
That application made clear that there were three options available to the university — buy the Opera site, build a new campus at the university’s main Castletroy campus on the city’s outskirts, or do nothing. However, three days later, UL’s governing authority officially approved the purchase of the alternate Dunnes Stores site.
That head-spinning turnaround was noted at the university’s most recent appearance before the Public Accounts Committee (PAC) in June 2021, when its governance was noted as being akin to that of a “hedge school in a banana republic” by then committee member Marc MacSharry.
Kerstin Mey had been the university’s interim president since the previous September. She has since been appointed to the role on a permanent basis. She endured a difficult morning of questions at that PAC meeting in June 2021, admitting that concerns regarding the due diligence or lack thereof of the Dunnes Stores site were raised by the governing authority at the time, and that despite those concerns the authority approved the purchase anyway.
Professor Mey further admitted that the consultant and negotiator of the Dunnes Stores purchase was appointed through a non-compliant procurement process.
Last July, the Higher Education Authority told the PAC it had been assured the Dunnes acquisition would be “a good deal”.
At the UL meeting, the PAC heard that consultants KPMG had been appointed to investigate the transaction. It has since emerged that UL set the terms of reference for the investigation. Ever since, the PAC has been on tenterhooks awaiting that report’s publication.
Last December, the Department of Further and Higher Education confirmed that €1.7m — 69% of the university’s State-sanctioned capital funding — had been withheld over concerns regarding its financial governance. That remains to be the case as of the time of writing.
Meanwhile, late last year, the KPMG report was finalised and distributed for the comments of the people named within, according to sources.
Last week, the university said it can’t distribute the report because it has received a legal threat from a key individual whose identity is not known but who is named in the report. That, in all likelihood, will mean a delay before the PAC can bring UL back before it to discuss the report’s contents.
“We had been waiting until this report was available,” PAC vice-chair Catherine Murphy said last week.
When asked about this report and the potential for further delays, a UL spokesperson said it had “no further update at this time”.
What does this delay mean in terms of further scrutiny of this deal, UL’s wider finances, and the university’s operations in general?
The coming PAC meeting had already been delayed for months because it couldn’t seem to find a date to get both Prof Mey and UL chancellor Mary Harney in the same room at the same time.
It is certain, though, that the appetite for further scrutiny among PAC members is growing and further delays will simply add to their frustrations as they wait for this crucial report to finally see the light of day.