Cork City Council slated for lack of financial records on properties

Cork City Council has been criticised by the local authority spending watchdog over a failure to keep proper financial records of its lands and buildings.

The Local Government Audit Service (LGAS) also expressed concern about the lack of proper controls on more than €700,000 spent by the council in sponsoring the music initiatives, Pulse of Tradition and the Lee Sessions.

Despite raising the issue last year the LGAS said a review of the council’s annual financial statement for 2015 showed problems persisted in relation to the financial management of its fixed assets.

It pointed out that the council was renting one of its properties to a medical practice for €10 per annum for the previous nine years when the open market rent for the property was independently valued at €27,500.

A credit union adjacent to the medical practice had similarly paid €10 rent per annum to the council over the previous eight years. The property was sold earlier this year for €283,000.

The review also noted that there was no record in the council’s housing stock or fixed assets register of a house that had been repossessed in 1995 but which had remained vacant ever since.

The LGAS discovered that the council had leased a field in Mahon to a development company but failed to ensure that the terms of the lease had been complied with.

It also found out that a number of council properties are being occupied by third parties without any formal lease or licensing arrangement being in place.

The LGAS stated: “The council needs to improve its governance and financial controls over its land and buildings.

“There should also be an inspection regime covering the physical assets to ensure properties are being used for the purposes specified and checking boundaries are properly secured and the assets properly protected.”

The council’s chief executive, Ann Doherty, said that the completion of a property interest register and its reconciliation with the local authority’s fixed asset register would improve governance and financial control over its land and buildings.

On the council’s funding of Pulses of Tradition at the Triskel, and the Lee Sessions at various venues in the city, the LGAS said an audit completed in August concluded that poor financial controls made the projects high risk for the council.

LGAS auditor Patrick J Healy recommended a cost-benefit analysis of funding for the two music projects should be carried out.

The council said it had carried out an internal audit earlier this year and financial controls had already been substantially improved with further controls to be achieved in 2017.