THE OFFICE OF PUBLIC WASTE
OPW has wasted €31m and no one is answerable
CATASTROPHIC errors at the Office of Public Works led to over €30m in losses to the State and an emerging financial scandal, according to files seen by the Irish Mail on Sunday.
A damning auditor’s report into mismanagement of the transfer of the Department of Health’s Dublin headquarters reveals losses on the controversial project are higher than first believed – a staggering €28.3m rather than €15.8m.
Further administrative errors at a building leased by the OPW in Galway have tied the State into a lease that is costing €2.8m more than it should.
This means faulty administration led to €31.1m of an overspend on two State department buildings.
The error in Galway, as with the Health headquarters in the capital, came about because office space was measured incorrectly. It means excess rent is being paid for non-existent floor space and the State can’t get out of the contracts.
It has also emerged that in the case of the Health HQ at Miesian Plaza, on Baggot Street in central Dublin, consultants were paid €9,225 – which cannot be recouped – for ‘lease negotiation’ and ‘measurement of premises…on behalf of landlord and OPW’.
In spite of this there is not enough room at the offices for the Department of Health and Department of Children staff that should have been accommodated there.
The 2017 report by the Comptroller and Auditor General unveils a catalogue of financial errors and mismanagement at the State body yet there will be no disciplinary action against public servants.
When it was discovered last year that €15.8m was lost in rent due to a 17-month delay in moving staff from two offices into the new headquarters, the C&AG investigated.
Its unpublished report found use of an incorrect floor space measurement methodology meant the State mistakenly signed a lease committing it to pay €344,000 a year more than required. According to the report it will cost as much as €10.5m extra over 25 years.
There is no legal requirement for landlord Larry Goodman, to release the State from the lease. And the report shows a similar mistake at the Galway Revenue building which will result in an ‘excess payment’ by the State of €141,000 a year over 20 years – or over €2.8m.
The mistake was only found because the C&AG looked into 20 sample OPW properties. The Government wants all 344 OPW leases investigated and expects the mistake will have been replicated at a cost of millions to the Exchequer.
Fine Gael PAC member Kate O’Connell said last night: ‘This is a wilful waste of taxpayers’ money. If it is replicated across multiple leases, it is exceptionally serious.’
Fianna Fáil’s Marc MacSharry said the OPW needs a separate entity to manage its property portfolio as it does not have the expertise. He has discovered there will be no disciplinary action. ‘There is no tangible sanction and this is something we hear time and time again in the public service.’ The report says that in addition to the €15.8m rent paid for an unoccupied building, and the €10.5m wasted on nonexistent office space, a further €2,027,300 was paid on rent and upkeep at the old Health headquarters at Hawkins House and other offices at Mespil Road because of the delay in moving staff.
The OPW manages all the State’s properties, overseeing premises as varied as Leinster House, Garda stations and sites such as Kilmainham Gaol.
The measuring error is complex. The report explains that a previous Irish standard measurement was replaced by the ‘international property measurement standards’ or IPMS.
Yet this issue was raised. The report states: ‘In finalising the lease, the issue of the different measurement bases was considered. When reviewing the lease, the Chief State Solicitor’s Office requested the OPW to confirm with its inhouse valuer whether IPMS was the appropriate standard for measurement in this case.’
The report also says delays caused by inappropriate floor layouts led to losses.
Though the OPW is supposed to agree a ‘rent free period’ under State guidelines for any rental over 10 years, the report says ‘no rent-free period or break option is included in the Miesian Plaza lease. There is no evidence of an appraisal of the reasonableness of the rent agreed considering the absence of a rent-free period and leasebreak option.’
The C&AG says this is a major financial error.
The OPW did not respond to queries yesterday and its chairman Maurice Buckley did not return phone calls.
Speaking earlier this month before the PAC, Mr Buckley said he believed the taxpayer may have saved as much as €5m or €6m due to the rate of rent negotiated at the time of signing being ‘significantly below market rate’.
He also said the OPW had not ‘ignored’ advice from the Chief State Solicitors’s Office. The report says the reason for ‘not reducing the rent...in the lease is not clear’ and it notes that in relation to the Galway building ‘there are internal memorandums from OPW’s architects and valuers raising concerns about the change in the measurement basis.’ john.lee@mailonsunday.ie
Used incorrect floor measuring method State cannot get out of contracts
THE fact that so much Exchequer money is being casually wasted by State bodies is beyond reckless. We pay our taxes in the belief they shall be spent prudently and wisely. However, when that hard-earned cash is wasted or misused, it is a scandalous breach of trust between taxpayers and those who purport to govern them.
Yet, right across the State sector there is wanton waste. The Health budget is ballooning out of control, despite no evidence of shorter waiting lists or increased productivity. Meanwhile, hard-pressed families continue to live from hand-to-mouth without any promise of financial reward. As if to compound this scandal, we now have hard evidence of what one former employee described as a ‘seeming cultural indifference to waste of taxpayers’ money’ at the Office of Public Works.
In a damning report seen by this newspaper, the OPW – which manages property on behalf of the State – was discovered to have wasted €22m on the new Department of Health headquarters at Miesian Plaza in central Dublin. A further €3m was overpaid at the Revenue Commissioner offices in Galway. In both cases, vast millions were wasted because of incorrect measuring of office space.
This is much more than a ‘cultural indifference’ to waste. It is a shocking disregard for the hard-working people of this nation. Few of us mind paying taxes provided, of course, those who spend them are held accountable for every cent. Yet, as one Fianna Fáil TD correctly observed, ‘there will be no accountability here, no sackings and no disciplinary action’. Only when the State is compelled to account for how it spends our money, will this callous culture of indifference end. For taxpayers, it cannot happen a second too soon.