State spent almost €4m on property that was never used

Comptroller & Auditor General finds Dublin building was leased but not occupied

The Department of Justice spent €3.89 million on a leased building that was never occupied, a spending watchdog has found. Photograph: Google Street view

The Department of Justice spent €3.89 million on a leased building that was never occupied, a spending watchdog has found. Photograph: Google Street view

 

The Department of Justice spent €3.89 million on a leased building in Dublin that was never occupied, the Government’s spending watchdog has found.

The Comptroller & Auditor General said in its 2016 annual report that a building on Wolfe Tone Street in Dublin city, earmarked to be used for a community-based project funded by the Probation Service, was leased but never used.

The State incurred costs of just over €1 million in the rental of the premises and other related costs and paid out €1.8 million in the settlement of legal proceedings that arose on the building.

A further €1 million spent fitting out the leased building was written off.

The annual report of the comptroller details wasteful spending, cost overruns, and mismanagement of State budgets and programmes.

The comptroller said the department was legally advised that the draft lease agreement was in order when it was signed but it subsequently transpired that the building did not have the relevant planning permission for its intended use.

“Legal proceedings which subsequently ensued were settled in late 2016 on the basis of strong legal advice to do so, thus avoiding any further costs accruing to the State,” the comptroller, Seamus McCarthy, said in his annual report.

“Prior to that settlement, significant efforts had been made to find an alternative use for the property but to no avail.”

The State will face no further costs from the building because the State’s lease on the property has been terminated as part of the legal settlement.

Budgets

In a review of the department’s IT services, the watchdog found the department failed to prepare comprehensive project budgets for setting up systems at the Insolvency Service of Ireland, the Charities Regulator and the Private Security Authority.

The department also did not prepare a basic business case for the IT project at the Insolvency Service of Ireland.

About €4.6 million has been spent on external contractors such as developers and systems analysts up to the end of March 2017 by the three agencies.

“Detailed and realistic budgets assist in the consideration as to whether projects should be approved for development in the first instance,” said the comptroller.

“They also enable the monitoring of actual costs, so that potential cost overruns are highlighted at an early stage and remediation actions are possible.”

A number of shortcomings were found in “project governance,” the comptroller found, with a lack of clarity in some cases around the responsibilities for each party, the expectations of interested parties in the systems and the approach to quality assurance and testing.

Fianna Fail TD Sean Fleming, chair of the Public Accounts Committee, said it would be meeting the Department of Justice officials on the management of the IT projects and the “wasteful” expenditure of almost €4 million on the building that was never used.

“I am deeply concerned that the lack of effective planning in the public sector results time and time again in such wastage,” he said.