The University of Canberra is negotiating to sell former student accommodation building Arscott House, which it was gifted by the ACT government in 2011.
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The building, near the Belconnen town centre, was gifted to the university at the end of 2011, and in 2015 the university closed it for student accommodation.
Auditor-General Maxine Cooper highlighted the Arscott House deal in a 2015 report into the ACT government's loans and support to the university for affordable student accommodation.
She said then that the university should make a decision about its future. If it was no longer to be used for student accommodation and the university made a profit from it, it should make "an appropriate adjustment" to the ACT government.
Almost 18 months later, the 214-bed Arscott House is still empty, but a spokeswoman said the university was "in negotiations with a potential buyer".
"At the moment, there is a lease purpose that would need to be complied with, or if they desire, look to have it changed," she said.
Last year, the university told Dr Cooper that the closure of Arscott House was temporary, while the university assessed "options to refurbish and manage the facility".
Dr Cooper said the gift of Arscott House, valued at $9 million, was part of the $23 million the ACT government was required to stump up so the university could get Commonwealth funding under the National Rental Affordability Scheme.
She highlighted the university's urgency about the timing of the transfer. In response to a request to delay the decision to 2012, the university vice-chancellor wrote:
"It is imperative that Arscott House go through. We have pressed and pressed on this. Yes, it is important for the UC 2011 result."
The university's 2011 financial year was about to come to an end in December, Dr Cooper noted.
"The transfer of Arscott House in December 2011 allowed the UC to report an amount of $9 million as revenue. In 2011, the UC made an operating surplus before tax of $10.1 million."
The university said the transfer gave it the security of a lease before it spent money on the building.
The request for Arscott came from the university in August 2010, when it said the block would be upgraded and extended as part of the university's accommodation strategy.
"Central to this strategy is the need to upgrade and extend Arscott House as a priority," the university told the ACT government, asking for the building at no cost.
"The issue of a crown lease for the site would provide certainty for the university and allow it to make the necessary future significant investments in the property and its immediate environs.
"The university will provide the funds necessary to develop and manage the land."
Asked when the university expected to finalise the sale and whether it would make a payment to the government if it made more than $9 million, a university spokeswoman said the information was commercial in confidence.
A government spokesman said the auditor's recommendation about making a payment to the government applied if the university sought to profit by changing the lease purpose.
"Our understanding is that the university intends on selling the site under its current leasing arrangements. The university is not seeking a change in the lease," he said.
The transfer of Arscott House to the university in 2011 helped the ACT meets its obligations under the National Rental Affordability Scheme and enabled the university to access significant federal funding. In return, the university was required to develop and operate 1000 new affordable rental dwellings, a requirement it was expected to meet in early 2017, he said.
