The Department of Education paid €4 million above the amount set out in an independent valuation report for a site in Sandymount in Dublin, according to the Comptroller and Auditor General's annual report.

The independent watchdog's report says the Department completed the purchase of the five-acre site and buildings from the Rehab Group in October 2016 for €20.5m.

In May 2016, an independent consultant valued the property at €16.5m. 

The Dublin 4 site, owned by the Rehab group, was purchased in 2016 to accommodate a new primary and a secondary school. 

The Department of Education had initially offered just €12 million for the five-acre site.

The Department has told the C&AG that it agreed to increase its offer to €20.5m because it had been informed by the Rehab Group that several bidders were looking to acquire the property and the top bid was in the order of €20m. 

It said despite extensive searches no suitable alternative site could be acquired. The Department also cited a "pressing requirement" for the delivery of school accommodation in the area. 

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The valuation report referred to the potential continued occupation of the site by the Rehab Group for a minimum two-year period as a weakness. 

The report says the Rehab Group had exercised its option to remain on site and is continuing to occupy Roslyn Park College under a licence agreement. 

It was granted to allow continued provision of catering services at Roslyn Park College.

Under the licensing agreement the Department of Education will achieve possession of the full site in October 2021.

Additional reporting Aisling Kenny