Professor Shane Kilcommins:

I am the provost, deputy president and acting chief officer. I am joined by the chancellor of the university, Professor Brigid Laffan, John Kelly, corporate secretary, and John Field, director of management planning and reporting. We welcome the opportunity to address the matters outlined in the committee’s correspondence.

Our staff, students, regulators, academics and business affiliates, and, of course, this committee, are justifiably shocked about what has emerged in regard to Rhebogue, coming as it does immediately after a poorly executed deal to buy the former Dunnes Stores building. There is sadness and anger, too, at the damage the Rhebogue controversy has done to the reputation of the University of Limerick, UL. We are in the media for all the wrong reasons. There are fears that UL's fine achievements, built upon the successes of students and staff, are being undermined.

As the person leading today's delegation, I want to say I am deeply sorry for what has happened. This acquisition should never have been allowed to progress. Although there are a number of internal and external reviews and investigations in train, we intend to be as open as we possibly can. I will set out the summary of events, after which we are happy to deal with members' questions.

Regarding Rhebogue, we provided to the committee the fact-finding review undertaken by Ms Niamh O'Donoghue. In summary, it found gaps in due diligence, non-adherence to UL policies and procedures, shortcomings in information presented to decision-making committees, inappropriate valuations, contractual changes made without approval and issues with planning permission. In late 2021, a representative of a developer approached the chief corporate officer with a proposal that purported to help address the accommodation crisis. Rhebogue, which had planning permission for 20 houses, was offered as a potential solution and was considered potentially viable. The proposal involved the adaptation of the houses to maximise the number of bedrooms. The project sponsors were the chief corporate officer and the chief financial and performance officer.

Not everyone thought the Rhebogue acquisition was a good idea. Those who were of that view conveyed their concerns and objections to the project sponsors. Notwithstanding that, the sponsors progressed the project and it ultimately came to the governing authority for approval. On 3 August 2022, a presentation was given to the governing authority in support of the proposal and, following discussion, it was unanimously approved. It has since come to light that key information necessary to enable the governing authority to make an informed decision was not provided, including vital particulars on planning risks, valuations and funding models. The governing authority was also given to understand that key individuals were part of the team and were fully supportive, but this was not the case. A planning warning notice has since been received outlining Limerick City and County Council's views on the use of the houses as student accommodation. A reply was provided and the matter is with An Bord Pleanála.

After the deal concluded, a stamp duty liability emerged. This increased the net cost of the houses, requiring UL to assess the carrying value of the assets. The valuation is subject to sign-off by UL's external auditors but the indications are that it will result in a significant financial impairment in the order of €5.225 million. When the stamp duty issue and a discrepancy in the approved purchase price emerged, the governing authority immediately referred the matter to the audit and risk committee, ARC. A fact-finding review was commissioned. It identified a series of shortcomings in the due diligence process around the acquisition. There was, in effect, an override of management controls. Concerns expressed about the acquisition were not adequately considered. All these matters now form part of both the internal and external reviews by the governing authority and the Higher Education Authority, HEA.

Regarding the city centre campus, the committee asked at a previous hearing whether UL overpaid for the former Dunnes Stores building. The answer is "Yes". An impairment review has also been carried out and the impairment figure is €3.04 million. UL occupies the building in collaboration with Limerick City and County Council. In time, it is hoped the new city campus will help to realise the potential of Limerick's world-class waterfront project plan.

On culture and accountability, the Rhebogue acquisition has brought issues of organisational culture to the fore yet again. It also shows that steps taken since the city campus purchase have not addressed some core governance issues at UL. Organisational culture must be a key focus for UL to return to the positive and supportive environment that was once pervasive. Members will have read the KPMG report last year and will be aware of the commitments given to our stakeholders, including this committee, in 2023. It must be acknowledged, given what has happened with Rhebogue, that those commitments do not bear up to scrutiny. The governing authority has engaged fully with the HEA in regard to the review undertaken under section 64 of the Higher Education Authority Act 2022. UL will be subject to intense scrutiny for some time arising from Rhebogue, and justifiably so.

As chair of this delegation, I offer my assurance to the committee and our other stakeholders that we are confronting the issues and working tirelessly to address them. I can only ask members to take these assurances at face value in order that we can later evidence to the committee the changes that will be made. The University of Limerick is a fine institution. It is a young, energetic and enterprising university with a proud record of innovation in education and scholarship. In terms of meeting our core objectives, we face many of the same challenges as our contemporaries. Overcoming these challenges and building our institutional profile, with the support and oversight of our stakeholders, should be UL's focus. No matter what the surrounding circumstances, a university should never do anything that could jeopardise its academic reputation and standing. The chancellor has emphasised that, in addition to reform, there must be accountability for what occurred to ensure it never happens again.