Differences in underground rock formations discovered after building work began contributed to a project at Cork Institute of Technology (CIT) running 45pc over budget.
A new administration building and student centre at the Bishopstown campus were supposed to cost €13.7m but the final bill will be €19.9m, according to a report by the Comptroller and Auditor General (C&AG).
The report noted that a new form of contract in place since 2007 should reduce the risk to the State in these types of cases.
Despite reservations on the part of the design team, who identified a number of potential weaknesses in the tender, the CIT contract was awarded to the lowest bidder.
The project soon ran in to cost and time overruns for a number of reasons including the necessity to divert cables and a water main, and because an alternative foundation was necessary because rock levels varied from data available before construction.
A geophysical survey of the site was not received by the structural engineers until 2002 but the CIT said that, in any event, it would not have identified the underground problems.
The CIT and contractor became embroiled in a dispute, and the C&AG noted that the form of contract used at the time left considerable risk with the CIT.
Meanwhile, the C&AG also found an overlap and lack of measurement of the result of programmes funded by the €510m Strategic Innovation Fund, which was introduced to fast-track reform at third-level.
The Higher Education Authority is tackling the issues identified by the C&AG.