Donegal County Council has been told that there is no evidence of corruption in the its purchase of five houses at An Crannla in Buncrana, some of which were found to have deleterious materials in their blocks.
Auditors BDO, who were commissioned by the council to carry out an independent review, presented their report last week, and it’s being discussed at a special meeting this afternoon.
CEO John McLaughlin told members he always knew there was no corruption or wrongdoing, but stressed that this not replace or negate any other review by any other organisation. He pledged that the council will cooperate and participate in any other review.
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Full report text –
3. BDO Report dated 24th June 2022
Summary as presented by the CEO
REPORT TO SPECIAL COUNCIL MEETING ON 11 JULY 2022 ON THE
OUTCOME OF THE EXTERNAL REVIEW OF THE ACQUISITION OF FIVE
HOUSES AT AN CRANNLA, BUNCRANA.
1. Introduction and Background
The Council acquired five houses at An Crannla in Buncrana after they had
been leased by the Council for ten years and occupied by five families. The
acquisition process started during 2019 and was completed in early
2021.The houses contained a certain level of deleterious materials in the
blockwork walls and that was known early on and verified by specialised
testing. There has been significant negative commentary over the past year
after the acquisition was completed from a small number of elected
members around the acquisition, and it has been alleged that there was
corruption involved in the purchase.
Naturally and in line with all our responsibilities and obligations, the Council
takes any allegations of corruption very seriously. The Council will seek the
relevant supporting evidence, pursue the direction that the evidence leads
and take all steps in line with our policies and procedures. That is what is
expected of a public body serving the people of the County.
The purpose of this report to Council is to specifically deal with the issue of
the external review into the acquisition of the five houses in Buncrana.
2. Previous Reports to Council and decision to seek an External
Review.
The Council had internally reviewed the allegations made and addressed the
issue of acquisition of the five houses previously and had provided detailed
reports and documentation to Council on 16th July 2021 and 6th October
2021. In addition, it was reported on at the Housing Strategic Policy
Committee.
Notwithstanding those internal reports, comments continued to be made and
I indicated at the Council Meeting on 21 February 2022, that while we did
not see any evidence of corruption, we would have an external review
carried out by an outside company and that an update would then be
brought to the elected members.
I have advised that this external review being undertaken by the Council
through an external and qualified company would not replace or impact upon
Report to Special Council Meeting on 11 July 2022 Page 2 of 5
External Review into Acquisition of Five Houses in Buncrana
any other review being carried out by any other party that may wish to do
so. The Council will cooperate fully with any such reviews, if required.
3. External Review.
The external review was conducted by a qualified private company named
BDO Ireland (BDO) following a competitive procurement process. BDO
engaged John T Garrett & Associates, Consulting Engineers, to assist them
with the review.
The reviewers were given access to all files and met the relevant staff. They
conducted a series of one to one interviews with the staff. Staff cooperated
fully with the review process, which was carried out in a thorough and
forensic manner and involved robust professional engagement.
I advised members on 6 July 2022 that the review had been concluded, and
I provided a copy of the report to all members along with the tender
documents which incorporates the scope / terms of reference ‘’to review the
process followed by Donegal County Council (the Council) in connection with
the purchase of five houses at the An Crannla estate in Buncrana (namely
houses 1 to 5)’’.
The full External Report prepared by BDO and the Scope/Terms of Reference
for the Procurement are attached here to this Report to Council.
The key findings / conclusions contained in the BDO Report can be
summarised below.
Allegations of corruption.
1) ‘BDO has not identified any documentary evidence of corruption,
systemic corruption or corrupt behaviour from our review of the
Council’s files’ and ‘is satisfied that there is documentary evidence
that demonstrates there was appropriate segregation of duties at
each stage of the leasing, inspection, approval and conveyance
processes’.
Allegations of cover up / concealing of evidence of the status of the
properties.
2) BDO is satisfied from their review of Council files ‘that there has
been no attempt to cover up or conceal evidence of the status of
the properties on the Council’s files, as all documentation referred
to in this report has been made available to BDO’.
Report to Special Council Meeting on 11 July 2022 Page 3 of 5
External Review into Acquisition of Five Houses in Buncrana
3) In relation to the structural condition of the properties, and
correspondence at conveyance stage, BDO has ‘reviewed the
correspondence between the Council and its conveyance solicitor
and is satisfied that the query response was further contextualised
and included references to “some level of cracking” and a “potential
risk of further degradation with freeze/thaw action’.
Technical considerations & due diligence.
4) BDO is ‘satisfied that there was consideration given as to the likely
need for repairs following the geological tests undertaken by a
recognised specialist geologist before a decision could be taken on
whether the houses could be purchased’.
5) John T Garrett & Associates, Consulting Engineers is of the view
‘that the Council’s rationale at the time for the purchase of the five
houses can be mapped to the categorisations (building grouping)
and remediation options set out in IS 465’ and ‘is of the view that
the Council’s rationale at the time for the purchase of the five
houses can be mapped to the categorisations (building grouping)
and remediation options set out in IS 465,’ and ‘notes that Option 5
remediation’ (i.e. the lowest remediation option within IS 465) ‘ ..
has not been necessary to date, and it is not known at what point
any of the above options may become necessary in the next few
years‘.
6) BDO is ‘satisfied that property valuations were carried out by an
independent estate agent licensed by the Property Services
Regulatory Authority.’
Correspondence with Department of Housing.
7) BDO find ‘that the written notification to the Department on the
condition of the five houses could have been qualified and/or could
have included the details of the geological tests the Council had
carried out in 2019. BDO notes that in respect of new build houses
which commenced being purchased by the Council in 2021, such
information is being provided to the Department.’
It is clear from the Report that there has been no corruption, systemic
corruption, no attempt to conceal or cover up the fact that the houses had
Mica, and that appropriate segregation of duties and internal controls were
in place throughout the leasing and acquisition process.
Report to Special Council Meeting on 11 July 2022 Page 4 of 5
External Review into Acquisition of Five Houses in Buncrana
4. Impact on Staff
Many of our staff involved in this purchase process have been subjected to
repeated and unwanted verbal attacks at meetings, and abuse, threats and
allegations by e-mail and social media. This has occurred over a sustained
period and has been done without any regard for the reputations of the
individuals affected, the right to their good names and without due process
or basic fair procedures of any kind whatsoever.
It is now clear from an independent report from a professional reputable firm
with significant expertise in such matters, that the allegations made in
respect of the purchase of the five houses at An Crannla are without
foundation, and the independent report therefore fully and independently
exonerates staff involved in the acquisition of the houses.
Staff cooperated fully with the review process, which was carried out in a
thorough and forensic manner and involved robust professional engagement.
It is important to state unequivocally that the reputation and good names of
individual staff have been fully upheld, and I would like to commend the
staff involved for their continued professionalism including their engagement
with this process, which was undoubtedly extremely difficult and stressful on
a personal level for the individuals concerned.
The level of public scrutiny and ongoing commentary on this matter has
been of a nature that public servants would never expect in their day to day
work. The stress and hurt is also felt by the family members of the
individuals affected.
5. Impact on Tenants
It is acknowledged that these houses are the homes of five families. They
had already lived in these homes for 10 years as part of a Council lease. The
Council was thinking of these families and how their housing need could be
met when it extended the lease and acquired the homes. These families
have been the subject of much media coverage and unwanted scrutiny over
this past 12 months. It is hoped that this unwanted attention for those
families will now stop.
Report to Special Council Meeting on 11 July 2022 Page 5 of 5
External Review into Acquisition of Five Houses in Buncrana
6. Summary
The Council is satisfied with the external review carried out by BDO and their
Consulting Engineer. The Council is pleased that BDO as a competent and
reputable firm in this area of work, so clearly and unequivocally stated that
they found no evidence of corruption or wrongdoing. The Council staff have
been fully vindicated and their good names and reputation have been
upheld. The five homes which continue to be lived in by five families have
been purchased in line with normal procedures.
Yours sincerely,
_________________________________
John G. McLaughlin
Chief Executive
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