TWO of Donegal’s best known leisure facilities – both heavily financed by Donegal County Council – are running at a substantial loss according to new figures published by the local authority.
Details of the Local Government Auditors report for 2015, released by Donegal County Council earlier this week, show that the Aura Letterkenny Leisure Complex and Finn Valley Leisure Centre had a combined deficit of over €4 million.
Letterkenny Sports Complex Development Limited incurred a deficit of €475,000 for the year ending 31 December 2014, with accumulated losses of €3.342m. Of this sum, more than €3m (€3.063m) relates to depreciation of assets.
Finn Valley Swimming Pool Limited incurred a deficit of €295,000 for the year ending December 31, 2015, with accumulated losses of €707,000 at the same date.
In its Statutory Audit report to the members of Donegal County Council for the year ended, 31 December 2015, the Local Government Auditor said that the Council needs to improve its oversight and review of the eleven companies in which is recorded its interest in last year.
Number of issues
A number of issues were raised in relation to three of those companies, Finn Valley Swimming Pool Limited (FVSPL), Letterkenny Sports Complex Development Limited (LSCDL) and Letterkenny Theatre Management Limited (LTML).
With regard to FVSPL, the Auditor noted that the Council provided a €1.9m loan to this company.
“Agreement has not currently been reached between the Council and FVSPL regarding the terms and conditions attached to this loan. It should be noted that Donegal County Council are making repayments on this loan to the Housing Finance Agency on behalf of FVSPL,” the report read.
In reply, Mr Seamus Neely, Chief Executive, Donegal County Council, said the company was established for the construction and operation of the new leisure centre in Stranorlar.
“Donegal County Council, as part if its function in the provision of community facilities, acted as the lead in ontaining grant and loan sanction to facilitate the putting in place of this infrasturcture. This included the drawing down of a loan to facilittae the completion of the work.
“Due to a range of issues arising following the commission of the facility, the company has not to date been in a position to recoup to the Council of servicing the loan.
“This Council continues to have strong engagement on a regular basis with this company as its trading position matures and will continue to review options available in dealing with the issues raised,” Mr Neely said.
Meanwhile, Letterkenny Sports Complex Development Limited (LSCDL) incurred a deficit of €475,000 for the year ending 31 December 2014, with accumulated losses of €3.342m. Of this sum, more than €3m (€3.063m) relates to depreciation of assets.
These accounts include details of a loan payable to Donegal County Council for €19.954m although, the Auditor notes this loan is not recognised in the Council’s accounts.
LSCDL was formerly under the aegis of Letterkenny Town Council and the facility itself is managed by a separate private company under a management contract.
Mr Neely said the Auditor’s comments were acknowledged and the importance of improving oversight in this important area is recognised.
The Chief Executive said that a review of LSCDL, in conjunction with all other local authority companies, is currently underway.
“This includes a scheduled review by internal audit of all local authority companies with specific attention being given to leisure centres,” Mr Neely said.
Meanwhile, Letterkenny Theatre Management Limited had accumulated losses of €83k at the end of last year.
The Auditor referred to a letter, dated May 20, 2013, between the Council and LTML confirming that the Council was committed to the ongoing provision of any financial support to enable the company to manage the theatre facility and run its programmes.
LTML is the management company for An Grianán Theatre in Letterkenny and the council provides an annual allocation as a contribution towards its operational and programme costs.
“The company is aware of the need to address the deficit of €83k referred to in the Auditor’s report.
“It has been indicated that a modest reduction in the deficit will be reported for 2015, and further reductions have been targeted for future years with a view to eliminating the deficit over an appropriate timeframe in a manner that does not negatively impact on service delivery,” Mr Neely said.