College officials will admit management controls were circumvented and concerns were not properly addressed before the purchase was completed.
UL Provost Professor Shane Kilcommins will tell the Dáil's Public Accounts Committee (PAC) that the €11.44 million purchase of 20 houses in Rhebogue, on the outskirts of Limerick, should never have happened.
A value for money report shows that UL overspent on the homes by €5.2 million.
Prof Kilcommins will tell the committee that UL will “rightly” be the subject of “intense scrutiny for some time” because of the deal.
His opening statement for Thursday morning's PAC meeting will also reflect the shock, anger and sadness that staff and students are experiencing over the overspending.
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“There was effectively a circumvention of management controls and the concerns raised about this acquisition were not adequately taken into account,” Mr Kilcommins is expected to tell the committee.
“This takeover should never have happened.
“Not everyone thought Rhebogue was a good idea and they conveyed their concerns and objections to the project sponsors. Despite this, the sponsors moved the project forward, ultimately to the governing authority for approval.”
He will tell the committee that a representative on behalf of Sivergrove Developments contacted UL Chief Commercial Officer Andrew Flaherty in late 2021 with a proposal for the university to acquire the properties.
Mr Flaherty and Gary Butler, UL's Chief Financial and Performance Officer, later became the lead sponsors of the deal as it went through internal approval processes.
A higher-than-expected stamp duty bill brings the total cost of the homes to €12.56 million – or €630,000 each on average, double the price of comparable homes in the area.
UL's governing authority had approved an expenditure of €10.88 million on the homes, but a contract for €11.9 million was signed. This was eventually reduced to €11.44 million, but this was still €560,000 more than approved by the board.
The Higher Education Authority (HEA) said it appears UL president Professor Kerstin Mey has approved the additional spending.
The deal was completed last October when the students moved into the homes. However, they do not have planning permission to be used as student accommodation, and the issue is the subject of a planning review by An Bord Pleanála.
UL wrote to gardaí last month to alert them to possible fraud. The case is currently the subject of an ongoing review by the Garda Economic Crime Bureau to see whether a criminal investigation is warranted.
Poison letters sent to the university last year are the subject of a criminal investigation into the alleged harassment and intimidation of a whistleblower who questioned the purchase.
The letter writer allegedly attempted to undermine doubts about the purchase, raising fears of harassment and threats regarding the transaction.
A fact-finding investigation carried out by Niamh O'Donoghue, a former secretary general of the Department of Social Protection, found that legitimate questions about the purchase were undermined and ignored.
It found that the takeover was approved without key decision-makers being fully aware of the risks.
A separate investigation by consultants Avison Young on behalf of the HEA found that UL ignored a cheaper housing solution that would have delivered more student housing, allowing it to continue with the Rhebogue plans instead.
The university is now the subject of a special HEA review of similar deals made over the past fifteen years. Governance, cultures and other issues of concern are also being explored.
UL Chancellor Professor Brigid Laffan, who was appointed to her post late last year, will say the PAC issues surrounding the Rhebogue deal came to light at the second meeting of government authorities she chaired.
Members of the Government Authority, a council responsible for planning and governance, raised concerns about due diligence, the high price per house and the guarantees they previously received, Prof Laffan will tell TDs and senators.
“I will not ask you to trust us or tell you that there is no need for significant change within UL. Instead, I want to convey to you my determination and the determination of the governing authority to ensure that UL emerges from this a stronger, better governed institution,” she will tell the PAC.
“I want to emphasize that the problems at UL do not arise from the institution's core academic mission or academic programs.”
PAC chairman Brian Stanley, a Sinn Féin TD, said he was keen to hear from UL's delegation.
“Matters that the committee intends to investigate include a governance review by the HEA, due diligence on property acquisitions and oversight by the HEA, student enrollment and retention, student housing shortages, subsidiary management and management of capital equipment,” Mr Stanley said. added.