Controls 'overridden' to allow approval of UL housing purchase
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Controls put in place at the University of Limerick to prevent a repeat of an ill-fated transaction which cost the institution millions were “overridden” in order for the purchase of 20 houses to be approved.
The Public Accounts Committee heard that the controversial €11.4m purchase of those houses for student accommodation was presented to the college in such a way as to create the “strong possibility” the deal would be approved.
The purchase, at an estate in Rhebogue, close to the university, has since been found to be €5.3m above market value.
Chief officer and provost of the university Shane Kilcommins said a number of meetings were held with the university’s executive committee and other sub-committees before the deal was brought to the governing authority, which had final sign-off.
However, the committee heard that those meetings were held and the project was progressed throughout 2022 on the basis of due diligence taking place, something which did not happen.
When asked by Labour’s Alan Kelly if the process had seen an element of “manufacturing” in order for the deal to be secured, Mr Kilcommins replied that “the real concern is that the controls put in place were being overridden”.
This is a reference to procurement templates put in place in the wake of UL’s purchase of the old Dunnes Stores building in 2019 for €8.3m without a proper valuation, a deal which eventually cost the college €3.4m.
Director of management planning and reporting at the university John Field said he had been “extremely alarmed” in early 2022 that nothing about the transaction had been put “in writing”.
“You can’t do due diligence with nothing written down,” he said, adding that at a meeting on March 23, 2022, he had raised his “significant concerns” with the deal, which he said “wasn’t fit for purpose”, but that he and chief corporate officer Andrew Flaherty had “agreed to disagree”.
When Mr Field was asked by Mr Kelly if “the presentation of information [for approval of the deal] was done in such a way as to create a strong possibility of a certain outcome”, he replied “yes”.
The committee heard that following the governing authority’s approval of the transaction in August 2022, Mr Kilcommins was pressurised to sign off on the deal, despite not having the authority to do so.
It also heard that following the governing authority approving the deal for €10.9m, a separate agreement was brokered which saw €11.4m paid after stamp duty unexpectedly fell due on the purchase, and that this new agreement was never brought to the authority’s attention.