University of Limerick to apologise for housing deal at centre of garda probe

Officials from the college will admit management controls were bypassed and concerns were not properly considered before the purchase was completed.

UL provost Professor Shane Kilcommins will tell the Dáil’s Public Accounts Committee (PAC) that the €11.44m purchase of 20 homes in Rhebogue, on the outskirts of Limerick, should never have been allowed to progress.

A value for money report shows UL overspent €5.2m on the homes.

Prof Kilcommins will tell the committee UL is “justifiably” going to be the subject of “intense scrutiny for some time” because of the deal.

His opening statement for Thursday morning’s PAC meeting will also reflect shock, anger and sadness experienced by staff and students because of the overspend.

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“There was, in effect, an override of management controls and concerns expressed about this acquisition were not adequately considered,” Mr Kilcommins is expected to tell the committee.

“This acquisition should never have been allowed to progress.

“Not everyone thought Rhebogue was a good idea, and they conveyed their concerns and objections to the project sponsors. Notwithstanding that, the sponsors progressed the project, ultimately to the governing authority for approval.”

He will tell the committee a representative on behalf of Sivergrove Developments contacted UL chief commercial officer Andrew Flaherty late in 2021 with a proposal for the university to acquire the homes.

Mr Flaherty and UL chief financial and performance officer Gary Butler later became the main sponsors of the deal as it went through internal approval processes.

A higher than anticipated stamp duty bill brings the total cost of the homes to €12.56m – or €630,000 each on average, double the price of similar homes nearby.

UL’s governing authority had approved a €10.88m spend on the homes, but a contract for €11.9m was signed. This was eventually reduced to €11.44m, but this was still €560,000 more than had been approved by the board.

The Higher Education Authority (HEA) said it appears UL president Professor Kerstin Mey sanctioned the additional spend.

The deal was completed last October when students were moved into the homes. However, they do not have planning permission to be used as student accommodation, and the matter is the subject of a planning review by An Bord Pleanála.

UL wrote to gardaí last month to notify them of a possible fraud. The matter is currently the subject of ongoing assessment by the Garda Economic Crime Bureau to see if a criminal investigation is warranted.

Poison-pen letters sent to the university last year are the subject of a criminal investigation over the alleged harassment and intimidation of a whistleblower who questioned the purchase.

The letter writer is alleged to have tried to undermine doubts raised about the purchase, sparking fears of bullying and threats concerning the transaction.

A fact-finding review carried out by Niamh O’Donoghue, a former secretary general at the Department of Social Protection, found legitimate questions about the purchase were undermined and ignored.

It found the acquisition was approved without a full awareness of risks being presented to key decision-makers.

A separate review by consultants Avison Young on behalf of the HEA found UL ignored a cheaper accommodation solution that would have delivered more student housing so it could instead pursue the Rhebogue plans.

The university is now the subject of a special HEA review of similar deals completed in the last 15 years. Governance, cultures and other issues of concern are also being examined.

UL chancellor Professor Brigid Laffan, who was appointed to her post late last year, will tell the PAC issues around the Rhebogue deal began to surface at the second governing authority meeting she chaired.

Members of the governing authority, a board responsible for planning and governance, expressed concerns around due diligence, the high price per house and assurances they were previously given, Prof Laffan will tell TDs and Senators.

“I will not ask you to trust us or tell you that there is no need for considerable change within UL. Rather, I want to convey to you my determination and the determination of the governing authority to ensure that UL emerges from this as a stronger, better governed institution,” she will tell the PAC.

“I want to emphasise that the problems in UL do not arise from the core academic mission or academic programmes of the Institution.”

PAC chairman Brian Stanley, a Sinn Féin TD, said he is keen to hear from UL’s delegation.

“Matters the committee wishes to examine include a governance review by the HEA, property acquisition due diligence and oversight of this by the HEA, student enrolment and retention, shortages in student accommodation, management of subsidiary operations and management of capital assets,” Mr Stanley added.