An independent inquiry has been rejected by Dublin City Council over whether or not local authority houses are being given to people who do not qualify for them.
The move comes in spite of serious allegations of corruption in the system and six confirmed cases of housing being unfairly allocated.
The allocation of medical priority housing is decided by the council's chief medical officers.
However, an investigation by the council's internal auditors found that six properties in 2007 were given to applicants who had not been awarded overall medical priority.
It was later deemed that only one of these was a misallocation as the other five would have been housed anyway, based on their circumstances.
Independent councillor Mannix Flynn, who first obtained a copy of the audit and related documents, said: "I find the system untrustworthy and unsafe and I have not been given reassurance. The system has become corrupted."
A confidential case report obtained by the Herald gives details of a case where overall medical priority was awarded without any recommendation from the chief medical officer. The report, which is a grievance procedure against a member of staff, clears that person from any misconduct but states that "someone in this office has to bear responsibility for breach of the letting regulations."
The housing allocation system is currently under another internal investigation by the city council's Audit Committee, which is looking at 555 cases.
At last night's city council meeting, city manager John Tierney said: "With regard to the investigation, if I were to give a complete picture, I would have to divulge confidential information which would not be appropriate at this juncture."
Many councillors, most of whom have not seen the reports obtained by Cllr Flynn, expressed their confidence in the housing allocation system.
Independent councillor Christy Burke said: "The housing department should be commended on how it deals with people every day. It's disgraceful that we're here discussing this tonight."
Councillors rejected Cllr Flynn's motion to implement an independent inquiry. A motion by Labour Party councillor Dermot Lacey to allow the audit committee to continue the investigation was passed.
The audit makes 29 recommendations about how the housing allocation system should be improved.