THE Department of Justice has spent €2m renting a building that cannot be used.
The 25-year lease was acquired for a probation services project that can not be used because the building has no planning permission.
The building on Dublin's Wolfe Tone Street was intended to rehouse The Bridge Project and was fully fitted out before proceedings were issued.
The Public Accounts Committee said it has received legal advice that it can pursue the matter at public hearing.
The issue of the disputed lease, which had attracted strong local opposition, had been highlighted by the office of the Comptroller and Auditor General.
But Eileen Creedon, Chief State Solicitor, has told the PAC committee that the case is "still live" and can not be discussed.
"I wish to assure this committee that risk assessment is a matter that is taken with the utmost seriousness by me and my office," said Ms Creedon who is making her first appearance before the PAC committee since her appointment last year.
The PAC is this morning examining the 2011 appropriation accounts of the Department of Justice and the Chief State Solicitor's Office.
The future costs and liabilities of the Morris Tribunal as well as costs in relation to immigration and asylum will also feature at today's hearing chaired by John McGuinness TD.
The Department of Justice's vote for the end of 2011 was €400m, with salaries accounting for some 36pc of the overall vote.
Secretary General Brian Purcell said that 24 audit reports were conducted within the department in 2011 and 26 such audits in 2012.
Ms Creedon told the committee that the gross outturn for her office in 2011 was €32.915m, staff salaries accounting for 44pc of the overall sum.
Almost a third of the CSSO's budget in 2011 was spent on legal fees and Ms Creedon revealed that sanction is required from the Department of Public Expenditure and Reform (PER) for any brief fee to barristers in excess of €9,525 In June 2008 the Probation Services leased premises located in a largely residential building in Wolfe Tone Street for use by the Bridge Project.
The Chief State Solicitors Office negotiated the lease with the owner of the premises on behalf of the department.
The Planning Office of Dublin City Council issued a warning letter to the Bridge Project in March 2010 stating that the permission granted in 2001 for change of use of the premises to commercial use had expired in January 2006.
As the planning permission did not revert to previous uses once the permission for commercial use expired, this meant the department would have to apply for planning permission for any type of the use of the building.
However, because of strong local opposition, permission to house the Bridge Project would be "difficult to secure" the committee heard.
Ultimately, the Department had incurred expenditure in relation to rental and fitting out of the premises amounting to over EUR2m without any benefit having been received, the C&AG found.
The legal dispute is between the Department, the landlord/receiver and the architect of the landlord/receiver according to the CSSO which said a "full response" to the C&AG will be made at the conclusion of the case.