CRISIS OF CULTURE

University of Limerick mired in housing scandal after concerns around deal were ignored Property controversy has far-reaching implications for institution as a toxic atmosphere pervades, reports Wayne O’Connor

At the end of an unprecedented meeting last Thursday, a former University of Limerick (UL) governing authority member spoke of a culture underlying the college’s current crisis.

Dr Fergal O’Brien said that when he asked questions, he was seen a troublemaker. “One of the expressions that has entered the lexicon here is, ‘I take your silence as agreement’. My understanding, as an Irish person, is when I am being silent I am very much not agreeing with you,” Dr O’Brien told a room of hundreds of colleagues and students.

Many in the room did not get to speak, but all were there because they are unhappy with how UL is run.

They gathered to hear UL Chancellor Professor Brigid Laffan address the university’s controversial €11.44m purchase of 20 homes nearby in Rhebogue last year.

A student asked Prof Laffan how €5.2m went missing. A fact-finding report found the homes are worth about half of what UL paid for them last year. There is no planning permission to house students there, but UL moved them in anyway. No explanation has been given yet. “It is my experience, sadly, that when I did ask questions I was perceived as, and potentially portrayed as, somebody that was trying to cause trouble. I was not,” Dr O’Brien said.

He clarified he was speaking in a personal capacity but was on UL’s governing authority between February 2021 and April last year.

Others have made similar complaints of a toxic atmosphere around the university.

Prof Laffan said she was “alarmed and worried” when she heard details of the housing deal. She acknowledged “a very serious governance problem”, but insisted UL will do better under her watch. She was appointed chancellor late last year.

University officials first posed questions about the housing deal last May but these were ignored. The issue only came to a head when a stamp duty problem emerged later in the year.

A deal to purchase the houses from Silvergrove Developments was agreed in August 2022. The governing authority, which signs off on planning and policy decisions, approved a €10.88m spend. However, contracts were signed for €11.9m. It is unclear who approved the extra €1m cost.

This overall fee was eventually reduced to €11.44m when UL negotiated its way out of a rent share agreement with the developer and agreed to pay the full amount upfront. This payment was made last October.

Weeks later UL found out it was liable for a higher stamp duty bill than had been expected because a higher rate is charged on any entity buying 10 or more properties in a year.

This brought UL’s total cost for the homes to €12.58m, or €630,000 each. They are worth about €312,000 each on average, according to UL’s retrospective report. The terms of reference for this report were finalised in February, a week after the Sunday Independent first published details of the deal.

After the stamp duty bill arose, senior college officials asked why UL paid more to the developer than had been approved. This discrepancy is one of the key details that led to the Higher Education Authority (HEA) invoking special powers last week, ordering UL to conduct a more detailed review of matters around the purchase because of “significant” governance concerns.

This HEA move is the first step in a process which could see State funding being withheld or an external official appointed to oversee the operation of the institution. Senior figures in the Government have expressed concern over the deal.

In a letter sent to Prof Laffan, the HEA alluded to its own analysis of the deal. The HEA has had independent personnel in UL since last month asking questions about the purchase. This led to questions around due diligence, value for money and why the deal appears to have been at an advanced stage before being brought to the governing authority for approval.

One source said UL failed to present evidence of a “systematic appraisal of the available options”, and no alternatives to Rhebogue were considered.

Another source said there was “an effort to push this deal through” and staff, usually key to the completion of such transactions, were sidelined after raising questions about it early in the process. The HEA will spend three days on campus next month to determine its next steps and arrange terms of reference for the detailed review it has sought.

Other consequences are also apparent. Economics professor Stephen Kinsella said he spent most of last week assuring firms who invested in a UL software programme that their money was safe.

“I have been here for 17 years, and for 10 of those years we have had governance problems in this university,” he said on Thursday.

“We are naive if we think UL, and UL’s issues with property, is being understood as anything other than the organisation has something wrong with it. The good work that goes on here is tarred with this brush.”

Other staff are concerned access to research funding will be affected by governance insecurities. The university aspires to open a new veterinary school but will be competing with other institutions for the necessary funding. Recent events are unhelpful.

UL’s history is a factor too. The university is the subject of an ongoing garda fraud investigation over historical severance payments made more than a decade ago.

The Sunday Independent can reveal a woman, aged in her 60s, was arrested in January in relation to the inquiry. The investigation relates to payments of about €450,000 to two former UL employees. She was the third person arrested, after gardaí said there were two other arrests made in 2022 as part of a Garda National Economic Crime Bureau investigation into “alleged corrupt practices at a public body in Munster”.

All three were released without charge within about 24 hours of being arrested. Files were later sent to the DPP and UL has previously said it was co-operating fully with gardaí.

Other issues have emerged at the university since the payments at the centre of that investigation were made. Many of these matters also relate to the use of public money.

In 2015 two employees were suspended after questioning spending. UL later admitted the suspensions were wrongful.

Later, an independent report showed how UL spent €1.7m on severance payments which breached public pay guidelines, with some recipients re-employed by UL.

The university has also been criticised over its handling of multiple protected disclosures, with one of these cases currently before the courts.

The most relevant matter being considered in light of the controversial housing purchase is another property deal completed in 2019 when UL overpaid again.

UL spent €8.3m on a vacant Dunnes Stores unit in the city centre. The building is worth about €3m less than that, according to a review of that deal. This was completed just two months ago. Governance and oversight of such spending was supposed to have been strengthened since 2019, but this does not appear to be the case.

When I did ask questions I was perceived as somebody trying to cause trouble

The longer I am here, and the more I experience, my enthusiasm for the job decreases

Overspending by €5.2m on the recent housing deal means UL has lost more than €8m on its two most recent property transactions, a sum which will be written off in accounts this year, resulting in a financial deficit.

The homes in Rhebogue were initially designed and granted planning permission for use as social housing. Limerick City and County Council warned UL putting students in them breaches planning laws, risking a fine of up to €12.7m.

Last Tuesday the council refused an application to retain permission for a boundary and landscaping works at the estate. “The retention of works associated would facilitate this unauthorised [student accommodation] use and therefore the planning authority are not disposed to granting permission,” the council said. UL officials fear this is a sign of things to come.

Many staff at last Thursday’s meeting complained about poor leadership, a lack of accountability and an inability to transparently address UL’s many crises over the last 10 years.

Prof Laffan said these messages worried her. She recognised a “very serious governance problem” around the Rhebogue deal, and accepted change was needed.

More than 70 lecturers, 10 members of the university’s executive and student representatives wrote to UL President Professor Kerstin Mey in the past fortnight saying she has lost their confidence. A change in president seemed inevitable until news emerged she had taken sick leave last week and will miss a scheduled appearance at the Dáil’s Public Accounts Committee (PAC) on April 11.

Prof Mey had launched a stern defence of her tenure in the days before taking ill, pointing to increased student numbers and a rise in global university rankings. Her recent absence on campus appears to have delayed a decision on her leadership.

While the governing authority approved a €10.88m outlay on Rhebogue, this was presented to the board as a purchase price of €136,000 per room — a sum seen as expensive but not excessive for purpose-built student accommodation.

Valuations of €10.6m and €11.2m were also presented, but given these homes were designed to house families and not students, the transparency of information presented to the board will be scrutinised further in the coming weeks.

Senior college officials who brought the deal forward for approval will also be examined. Chief corporate officer (CCO) Andrew Flaherty and chief financial and performance officer Gary Butler are understood to have played a role here.

Mr Flaherty has a close working relationship with Prof Mey. He previously worked as a human resources director before being promoted to CCO in 2020 without a competitive recruitment process. Prof Mey previously told the PAC this was due to a “recalibration” of senior management roles at the university.

Mr Flaherty was one of three executive committee members who did not sign a letter expressing no confidence in Prof Mey; the other missing signatures being those of the president herself and UL’s vice-president of global and community engagement, Professor Nigel Healey.

UL’s governing authority met on Thursday evening to discuss the fact-finding report it commissioned around the deal. Arising from this, Prof Mey, Mr Flaherty and Mr Butler are being given an opportunity to review the report and submit written observations on its findings. Other relevant staff will also be given this opportunity.

“Once responses have been received, the governing authority will meet to determine the appropriate next steps,” a governing authority spokesman said. This is unlikely to satisfy staff. A cultural audit by trade union Unite, completed at the start of this month points to poor morale among staff and issues around dignity, respect, welfare and bullying. It was done because a previous governing authority failed to deliver a similar audit before its term lapsed last year.

The audit shows staff are increasingly disillusioned by the university’s leadership. Staff were asked if leaders were concerned about staff welfare, but UL was rated 1.9 out of five in this.

Staff pointed to “poor communication with little transparency”, “a sick organisation with incompetent leadership” and “the perception of wilful chicanery and strokes” as reflected in the media and PAC appearances.

One employee complained of a “vile and reprehensible” culture at UL. Another said: “The longer I am here, and the more I experience, my enthusiasm for the job decreases.”

A spokesman for the university said a new culture and engagement group is developing processes and structures “to help enable a positive organisational culture to thrive within UL”.

Senior college figures will engage with Unite about its survey in due course.

The spokesman said UL would also work with the HEA on its review of the Rhebogue deal.

Prof Laffan said she expected the terms of reference will be broad as UL enters a period of “extreme oversight”.

Instead of a letter this week, here’s a cautionary tale. It’s about what happened when good people were let down by bad leaders. It’s also a story with an unappreciated and largely unknown hero. More on him later.

This saga begins with a letter of a different kind, sent to me by email on September 15, 2015. A complaint about a Limerick Leader story, to be precise, wrapped up in a threat.

I’ve been sent plenty of legal letters over the years, including a corker from the cycling cheat Lance Armstrong, but the gold medal for shamelessness goes to the University of Limerick (UL).

Their complaint was about a page-one report which revealed, among other things, a culture of inappropriate spending at the university.

In response, a six-page letter drafted by UL’s learned friends, Arthur Cox, made Armstrong’s approach seem almost friendly. It demanded a craven front-page apology running to 300 words. For reporting the truth.

Our reply was shorter and could be summed up in six words: get stuffed, see you in court.

As if to prove the point, UL threw good money after bad by issuing High Court proceedings against the paper and — for good measure — me personally. Suffice to say this attempt to crush the Leader didn’t end well for UL.

I mention it because, alas, a university that excels in many areas has still to emerge from the shadow cast by that front-page story, which was followed by many more revelations of recklessness, misspending and alleged fraud.

On page 10 this week, Wayne O’Connor writes about the latest financial fiasco to beset UL — an overpayment in excess of €5m on 20 houses purchased at double the going rate.

It was Wayne who broke this story in the Sunday Independent and his distinguished reporting mirrors that of the Leader’s Anne Sheridan nine years ago. Both are UL graduates, by the way. The university has produced much excellence, but it hasn’t come from the top for a very long time — hence the cultural malaise.

Back in 2015, after the defamation writ landed, we were extremely grateful for whatever little support we could get locally. At this point, enter the hero — and another letter.

Jeremy Callaghan, a retired university administrator who had briefly worked at UL, sent us the best letter I’ve had the privilege of publishing in 14 years of editing newspapers. It finished with a line that has stuck in my head ever since: “UL needs to learn that those who are its strongest critics are also its greatest allies.”

Unfortunately, nobody in a leadership role had the humility or the intelligence to recognise the absolute truth of that statement. It was much easier to ignore Callaghan the arch critic.

And so vast sums were spent on reports, inquiries, investigations, reviews — and lawyers. None of them achieved anything of any consequence. Three presidents have failed miserably to get on top of the problems that kept coming.

Jeremy was unrelenting in excoriating what he described as “the wild west brought to the mid-west”. When I moved to this newspaper, his letters followed — in all, he waged a heroic eight-year, one-man campaign.

UL could not be relied on to put its own house in order, he repeatedly said. Outside intervention of an unprecedented nature – the arrival of a so-called “Visitor” with the powers to address institutional failure – was needed. He made these points not just in newspaper letters, but in correspondence to ministers, government agencies and others. He simply wouldn’t let it lie.

But eventually, exasperated by the State’s continuing failure to intervene, he declared himself defeated. In the face of official apathy, he could do no more. “I will sheath my pen,” he wrote in a “final protest” on our letters page last May.

And then UL really went and did it, spending – for reasons as yet unknown – more than €630,000 each on 20 houses a few miles from the campus which are officially valued at €312,000. In his report this week, Wayne O’Connor raises the possibility of an external official being appointed to oversee UL after years of failed governance. At the very least, the university has entered a period of “extreme oversight”.

I’m not sure what Jeremy Callaghan will make of that. But I’m very much hoping he’ll come out of letter-writing retirement to let us know.

It could even be that someone high up at UL, someone new, might decide he’s been consistently right all along, and thank him for his endeavours. But I wouldn’t count on that.

Have a lovely Easter weekend — and I hope our offering this week adds something to it.