The Comptroller & Auditor General (C&AG), the fiscal review body of the State, has issued severe criticism towards University of Limerick (UL) regarding two ill-conceived property purchases that led to financial losses surpassing €8 million. The report, made public last Friday, cited a glaring waste of resources with a €5.2 million excess expenditure in the acquisition of 20 student residences back in 2022.
The extensive 107-page audit also questioned the wisdom behind a separate real estate transaction in 2019, resulting in a €3 million loss for the university. This matter has added more fuel to the ongoing unrest at UL, which ultimately caused Prof Kerstin Mey to step down from her position as university president in June.
In a different turn of events, a suspect was apprehended by Limerick police regarding the alleged intimidation of an official at UL. The person was subsequently released without facing any charges, with the case forwarded to the Director of Public Prosecutions.
The review also put forward concerns about the student accommodation purchase at Rhebogue, a site 3km from the UL campus, where a final contract amended nine days after settlement resulted in an extra cost of over €1 million. It is clear that significant failures took place in due diligence, despite UL’s implementation of new procedures following previous issues.
UL had obtained formal valuation reports but based its proposed purchase price on the net rental-yield valuation method, over a sales price comparison method that would have projected a substantially lower valuation. This information, according to the report, was not made available to the ruling authority of the university.
Moreover, the audit pointed out negligence on UL’s part in not realising that the settled purchase price of €11.4 million was subject to stamp duty, leading to additional unaccounted cost of just over €1 million. It was noted that despite receiving inconclusive professional planning advice, the university failed to seek clarification from the local authority.
In late 2023, a cautionary notice was given to the University by the Limerick City and County Council. It mentioned that the switch to student housing without obtaining the necessary planning permissions could potentially constitute an unauthorised project. An Bord Pleanála’s decision regarding the planning status of this development has yet to be finalised.
An independent senior counsel conducted an inquiry into a set of specific issues related to the acquisition which had been flagged to the Governing Authority through a protected disclosure, according to the regulatory body. Nevertheless, it was noted that broader implications about problems highlighted for the University’s control and decision-making procedures were inadequately addressed or explored.
There was an increased level of apprehension about the Limerick city deal after the University of Limerick (UL) acquisition of an old Dunnes Stores location at Honan’s Quay for a new city campus establishment. According to the C&AG report, this property was purchased at over €8 million post UL getting the Higher Education Authority’s approval for a city campus project of €45.2 million. This included €3 million for a site in Limerick’s Opera quarter designated for development.
The regulator made an assertion that it was hard to justify how the acquisition offered any value for money as there was a lack of evidence of additional benefits that the Honan’s Quay property offered over the Opera quarter site, thus justifying the increased cost.
It was in 2023 that a backdated valuation of the Honan’s Quay property revealed that the University had paid a third more than the property’s 2019 market value. The University has suggested recognising a €3 million impairment charge, or a write-down loss, in its annual financial statements for 2022-2023. The University still doesn’t have a definite development and funding plan for the Honan’s Quay property.
Despite acquiring “some valuation advice” regarding Honan’s Quay before purchasing, the University did not obtain a proper valuation report. The regulator stated that this was in violation of the public spending code, but it was nonetheless suggested to the University’s governing authority that a valuation report had been produced.