A report showing local authority refunds of more than half a million pounds to borrowers has led to a call for the setting up of a national housing authority.
The report, compiled following an investigation by the office of the Ombudsman, reveals that an analysis of 6,411 accounts shows refunds of about £547,000, ranging from £1 to £3,500.
The Labour spokesman on the environment, Mr Eamon Gilmore, said last night that the report highlighted a serious problem. "There is an obvious need for a national housing authority which would provide the necessary expertise and advice to local authorities in this area. After all, they are expected to provide a service similar to banks and building societies."
The report, which will be presented to the Dail, reveals that Donegal County Council made refunds totalling £122,823, and had a credit balance remaining on one account for almost 19 years. A borrower with Athlone UDC paid 46 consecutive monthly instalments on a fully paid-up loan.
The investigation was prompted by a complaint to the Ombudsman in 1998 that Meath County Council had continued to accept payments from an elderly borrower relating to a housing loan which had been fully paid up for almost two years.
The report shows that seven of the 42 local authorities investigated had proper procedures to ensure that there were no overpayments on mature and redeemed housing loans. They are the county councils in Cavan, Laois, Monaghan and Offaly, and the corporations in Drogheda, Galway and Kilkenny.
Other local authorities, the report adds, had either no proper procedure, or ineffectual procedures, in place to check revenue balances on loans regularly. It recommends improved administrative procedures, staff training, interest auditing and the introduction of information technology. Compensation should be paid for the loss of purchasing power in cases where the credit balance remained on a revenue account for more than two years and where the amount was equal to or in excess of £100.
The report notes that the majority of local authorities placed a higher priority on the collection of loans and loan arrears than on refunding credit balances which were held on borrowers' accounts. "While many borrowers may have been remiss in not cancelling their standing orders, this did not diminish the obligation on local authorities to have proper and secure financial management systems in place to protect both their own interests and those of their borrowers."
The report notes that most local authorities made immediate arrangements to refund overpayments as soon as they came to light during the Ombudsman's investigation. They also took steps to review their administrative procedures.
