Advertisement

We need your help now

Support from readers like you keeps The Journal open.

You are visiting us because we have something you value. Independent, unbiased news that tells the truth. Advertising revenue goes some way to support our mission, but this year it has not been enough.

If you've seen value in our reporting, please contribute what you can, so we can continue to produce accurate and meaningful journalism. For everyone who needs it.

There's been a series of controversies over the university’s property acquisitions in Limerick city PA

‘Significant failures’ in UL’s multi million-euro property deals, says spending watchdog

A retrospective valuation found that UL paid approximately one third above the market value of the Honan’s Quay property in 2019.

THE UNIVERSITY OF Limerick (UL) did not obtain a formal valuation of a multimillion-euro property it purchased above market rates, according to an official report which also found other “significant failures in due diligence” on the part of the institution.

The findings come following a series of controversies over the university’s property acquisitions in Limerick city.

In April 2019, UL applied to the Higher Education Authority for capital funding towards the development of a €45.2 million city centre campus.

That included an estimated €3 million towards the purchase of a site in Limerick’s Opera quarter.

However, just three days later, the university approved the purchase of a property at the nearby Honan’s Quay area for €8.3 million.

A report by the Comptroller and Auditor General (C&AG) into the matter has found that “there is no evidence of any additional benefits” of the Honan’s Quay property compared with the Opera site which would warrant the increased purchase cost.

The C&AG report said: “It is difficult to see how the purchase represented value for money.”

A retrospective valuation conducted last year found that UL paid approximately one third above the market value of the property in 2019.

‘No funding plan’

The university has proposed that a €3 million write-down loss be recognised in its 2022/2023 financial statements.

The C&AG added: “The university remains without a clear development and funding plan for the Honan’s Quay property.”

The report also found that while UL had received some valuation advice prior to the purchase, it “did not obtain a formal valuation report”.

This was against the public spending code.

Despite this, the proposal was presented to UL’s Governing Authority as if a valuation report had been obtained.

Elsewhere, the C&AG examined the circumstances around a proposal for student accommodation on a site at Rhebogue – three kilometres away from UL’s main campus.

The report found that there were “significant failures in the due diligence” associated with the development, which would have included 20 houses.

The purchase price proposed to the Governing Authority was based on the net rental yield method for valuing the property.

Even though the accommodation was generally configured as a standard housing development, information on the sales price comparison method for valuing property, which would have yielded a much lower valuation, was not provided to the Governing Authority.

The university completed the purchase of the houses in October 2023 at a cost of €11.4 million, representing an average purchase price of almost €572,000 per unit.

UL had not identified that the purchase was liable to stamp duty, resulting in an additional unanticipated cost of just over €1 million.

The C&AG said: “Prior to the purchase, planning advice from relevant professionals was not conclusive but the university did not seek clarification from the local authority.

“In December 2023, after the purchase had been completed, the university received a warning letter from Limerick City and County Council stating that the change of use to student accommodation without planning permission may represent an unauthorised development.”

‘Paid significantly more’

A March 2024 valuation of the Rhebogue property indicates that UL is likely to have paid “significantly more” than it should have, the report said.

UL has proposed to write down €5.2 million in its financial statements over the development.

The C&AG report said: “The university’s system of control and decision making were not adequately considered or investigated.

“A further investigation commissioned by the Governing Authority found credible evidence that legitimate counterarguments to the Rhebogue acquisition by relevant staff in the university had been dismissed or ignored.”

UL’s acting president Professor Shane Kilcommins said the university “fully accepts the findings and the recommendations” of the report.

In an email to the university community, he said: “I want to assure everyone – staff, students, and external stakeholders, as well as our funders through the state – that we will implement these recommendations without delay, incorporating them into our larger recovery plan.

“The report’s findings are very disappointing and are an understandable cause for anger and upset amongst our community.

“These events should never have occurred, and the university has paid a considerable price both in financial terms, due to the impairments carried on our accounts from both transactions, and in reputational terms.

“The issues surrounding the city centre campus purchase cast a long shadow over UL’s reputation.”

He added: “The institution recognises the damage that has been caused: to the university’s standing, to the trust placed in us by the public, and to the morale of UL staff and students.

“I deeply regret that this is the case.”

Prof Kilcommins said “many corrective actions” had already been taken but acknowledged there were “no quick solutions to win back trust”, adding that achieving accountability will take time.

Close
34 Comments
This is YOUR comments community. Stay civil, stay constructive, stay on topic. Please familiarise yourself with our comments policy here before taking part.
Leave a Comment
    Install the app to use these features.
    Mute Nick Vasilakis
    Favourite Nick Vasilakis
    Report
    Sep 27th 2024, 8:45 AM

    May it bring them great happiness

    184
    Install the app to use these features.
    Mute Alan Kennedy
    Favourite Alan Kennedy
    Report
    Sep 27th 2024, 8:55 AM

    You could buy a few bike sheds out of that!

    82
    Install the app to use these features.
    Mute Sergio Reddan
    Favourite Sergio Reddan
    Report
    Sep 27th 2024, 10:01 AM

    Kyle Hayes legal fees sorted

    73
    Install the app to use these features.
    Mute Thesaltyurchin
    Favourite Thesaltyurchin
    Report
    Sep 27th 2024, 9:35 AM

    Would you give some money to the staff if it was you?

    43
    Install the app to use these features.
    Mute Sean O'Dhubhghaill
    Favourite Sean O'Dhubhghaill
    Report
    Sep 27th 2024, 10:50 AM

    @Thesaltyurchin: The shop gets a prize too, to be shared among the staff. Not sure how much it is, though.

    45
    Install the app to use these features.
    Mute Ol Dirty Bstard
    Favourite Ol Dirty Bstard
    Report
    Sep 27th 2024, 12:54 PM

    @Sean O’Dhubhghaill: 50 percent for the shop

    9
    See 1 more reply ▾
    Install the app to use these features.
    Mute Thesaltyurchin
    Favourite Thesaltyurchin
    Report
    Sep 27th 2024, 1:04 PM

    Thats correct Sean. “Shop gets €25,000 for selling a Euromillions winner, €10,000 for an Irish Jackpot winner, €3,000 for Lotto Plus 1..” and so on. Always thought if I won I’d give em all 10K or something… Euromillions like! they’d get nothing for the Canadian lotto ;)

    17
    Install the app to use these features.
    Mute David Lambe
    Favourite David Lambe
    Report
    Sep 27th 2024, 11:40 AM

    5.5 million isnt even a lot these days oh wait it is from where im standing!

    21
    Install the app to use these features.
    Mute CP
    Favourite CP
    Report
    Sep 27th 2024, 3:23 PM

    @David Lambe: 3 security huts and keep a million then sure

    12
    Install the app to use these features.
    Mute martin finnegan
    Favourite martin finnegan
    Report
    Sep 27th 2024, 1:13 PM

    Nice congratulations to whoever is. Be gone out this country if was me .

    23
    Install the app to use these features.
    Mute James Rowan
    Favourite James Rowan
    Report
    Sep 27th 2024, 11:51 AM

    Probably bought by JP Mcmanus

    16
    Install the app to use these features.
    Mute P. V. Aglue
    Favourite P. V. Aglue
    Report
    Sep 27th 2024, 11:39 AM

    5 million doesn’t go as far as it use too.

    14
    Install the app to use these features.
    Mute Alan Kennedy
    Favourite Alan Kennedy
    Report
    Sep 27th 2024, 2:05 PM

    @P. V. Aglue: Jaysus, I’d give it a go!

    32
    Install the app to use these features.
    Mute marklars81
    Favourite marklars81
    Report
    Sep 27th 2024, 11:59 AM

    They forgot to put the sponsored tag on this article.

    6
    Install the app to use these features.
    Mute Phillip Smyth
    Favourite Phillip Smyth
    Report
    Sep 27th 2024, 3:37 PM

    Dolores where art thou.

    6
    Install the app to use these features.
    Mute Rory Wilson
    Favourite Rory Wilson
    Report
    Sep 27th 2024, 3:12 PM

    Anyone wonder why the profits from the Irish Lotto go to the Canadian Teachers Pension Fund?
    More stupid than bicycle sheds!

    16
    Install the app to use these features.
    Mute John Mulligan
    Favourite John Mulligan
    Report
    Sep 27th 2024, 10:07 PM

    @Rory Wilson: they own the company. Nothing strange about it.

    4
    Install the app to use these features.
    Mute P. J.
    Favourite P. J.
    Report
    Sep 27th 2024, 11:40 PM

    @Rory Wilson:
    You’re both out of date by nearly 2 years!!
    The Ontario teachers pension board, along with their partners An Post, sold all of their shares in the Irish national lottery company to the owners of the French national lottery, FDJ in January 2023.
    The Canadians had been trying to offload it for a while.

    4
    Install the app to use these features.
    Mute Robert Halvey
    Favourite Robert Halvey
    Report
    Sep 27th 2024, 11:22 AM

    Coolaboola

    5
    Install the app to use these features.
    Mute Paul
    Favourite Paul
    Report
    Sep 27th 2024, 12:07 PM

    Lotto winnings should be taxed.
    No different to CGT.

    4
    Install the app to use these features.
    Mute martin finnegan
    Favourite martin finnegan
    Report
    Sep 27th 2024, 1:14 PM

    @Paul: we pay enough tax here on everything

    55
    Install the app to use these features.
    Mute Patrice Ahern
    Favourite Patrice Ahern
    Report
    Sep 27th 2024, 4:01 PM

    If I won that amount I’d give it all to my charities but I don’t like to talk about it.

    2
Submit a report
Please help us understand how this comment violates our community guidelines.
Thank you for the feedback
Your feedback has been sent to our team for review.

Leave a commentcancel

 
JournalTv
News in 60 seconds