The Irish Mail on Sunday

THE OFFICE OF PUBLIC WASTE

OPW has wasted €31m and no one is answerable

- By John Lee

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.

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