The Department of Housing has not undertaken financial reviews of Galway City Council after it borrowed €45.5m to buy Crown Square – but reserves the right to in future.

The Department sanctioned the loan in December 2022 on condition the local authority agreed to “periodic financial reviews”.

According to the Council, annual repayments amount to €1.6m over 40 years, to cover the cost of purchasing new City Hall headquarters in Mervue.

Fit-out costs originally estimated to be €11m are to be sourced from within the Council’s own resources.

The Department confirmed to this newspaper – following a Freedom of Information (FOI) request – that it hasn’t yet carried out a financial review.

The ‘periodic financial review’ requirement stitched into the loan contract, was according to a spokesperson, “a contingency”, that gave the Department the right to undertake financial reviews if it was “appropriate or necessary to do so”.

The spokesperson explained that annual independent audits and financial performance reports of the City Council by Local Government Audit Service (LGAS), and National Oversight and Audit Commission (NOAC) could trigger financial reviews by the Department of Housing.

Asked why it hadn’t yet carried out a periodic financial review, a spokesperson said: “No issues have been raised or brought to our attention in quarterly reports or annual audit and oversight processes which indicate the necessity to undertake a financial review in relation to Galway City Council. If any issues were flagged during these oversight processes or in quarterly financial reports, we would then consider a review.”

The Department said the Council was required to draw-down the loan before the end of December 2022, because there was an annual limit on overall local authority sector borrowing that had to be complied with.

The transfer date from College Road was to have been December 2023, but 18 months after the loan was drawn down, Crown Square remains unoccupied and is at least another six months behind schedule.

Asked to comment on the delay, the Department said it was a matter for the Council.

“Local authorities are entirely independent corporate entities having full responsibility under law for the performance of their functions and the discharge of their governance and other responsibilities. The purchase and occupation of the Crown Square building is a matter for Galway City Council,” a Department of Housing spokesperson said.

Pictured: Crown Square: 18 months after loan was drawn down, the City Council’s new offices remained unoccupied.