We have learned the Standards in Public Office Commission has decided to investigate the claims sent in an anonymous letter against the Donegal public representative.
It follows an informal investigation by SIPOC investigating officer Paddy Walsh.
Mr Walsh has now officially sent his findings to his senior officers at the commission office and recommended a formal investigation be carried out.
On November 12th, he officially recommended that a full, formal investigation be carried out.
A number of senior Donegal County Council officials including County Manager Seamus Neely have been made aware of the formal hearing.
Commission Secretary David Waddell has contacted officials by letter to inform them of the investigation.
The hearing is to be held at the Standards in Public Office Commission offices in Leeson Street.
A date for the hearing has yet to be set.
Senator O Domhnaill has claimed in the past that he is the victim of a political smear campaign.