Donegal County Council internal audit raises concerns at Bundoran Waterworld

An internal audit into Bundoran Waterworld conducted by Donegal County Council has revealed a series of financial governance issues at the company which operates the swimming complex.
With four of its seven directors either elected members or employees of the local authority, Bundoran Waterworld CLG is one of the Council’s associated companies.
The audit, commissioned as a follow-up to similar exercise carried out in 2022, highlights concerns around the outstanding debt owed to the council by Bundoran Waterworld, potential tax liabilities, and also questions whether appropriate insurance is in place for the operating company.
The first draft of the audit was issued to the relevant parties in January, with the final report issued in May and subsequently published on the council’s website.

Read more: Bundoran Waterworld re-opens after refurbishment

At the time of reporting, Bundoran Waterworld owed Donegal County Council €432,368 - with approximately 85% of that debt dating back more than a year and some as far back as 2019.
Much of the debt was incurred during covid-enforced closures, but with revenues rebounding back to almost €1 million in 2023, the auditor queried why such a sizeable debt remained unpaid and why no formal repayment plan had been agreed.
Although discussions have been held between the facility and council officials, a definitive arrangement has yet to be finalised at the time of the audit's publication in May.
The audit found that the leisure centre balanced its books annually in each of the previous three years, recording neither a profit nor a loss.
The auditor recommended that management immediately agree on a structured repayment plan with DCC to address the outstanding balance.
As the owner of the building, Donegal County Council pays the centre’s electricity bill, and then recoups the money from the operating company. However, there were arrears of just over €97,000 unpaid by the company at the end of December 2024.
Lease arrangements were found to be incomplete. The initial lease was signed between the operators and Bundoran Town Council in 2013, and was taken over by Donegal County Council following the abolition of the town council the following year.
No new lease to reflect that has been signed, and the internal auditors recommend that a formal lease agreement, first proposed in 2017, be finalised and signed.
The annual cost to the company for leasing the premises is €24,600, however the audit found that this fee was not paid in any of the years 2022-24, and that forms part of the debt owed to the council.
While the report confirms improvements in staffing and operational procedures, it flags uncertainty over whether the Bundoran Waterworld operating company has sufficient insurance coverage in place. With the facility vulnerable to natural events - such as damage sustained during Storm Barra - the audit stresses the importance of adequate insurance to ensure financial resilience.
The audit calls on management to review the existing insurance policies held by the centre to verify if adequate coverage is in place for the company.
The audit also highlights potential non-compliance with Professional Services Withholding Tax (PSWT) regulations. The auditor recommends that, as a matter of urgency, the liability be calculated and settled with the Revenue Commissioners, and that a wider review of other companies under the umbrella of Donegal County Council be undertaken to examine whether they are similarly exposed to the under payment of taxes.
Under tax law, subsidiaries of accountable public bodies like Donegal County Council are required to deduct PSWT on certain payments.
Bundoran Waterworld, deemed a subsidiary due to the local authority's directorship influence, has failed to deduct and remit PSWT on relevant professional services and the auditors have recommended that this be rectified immediately.
Earlier this month, Bundoran Waterworld re-opened after a closure during to facilitate a €2.4 million refurbishment of the premises which first opened more than three decades ago.
The upgrades include a new reception area, new changing village and new toilets and showers.