THE GOVERNMENT IS facing further difficult questions over taxpayers’ money being wasted, after it was revealed today the Arts Council spent €6.67m on a failed IT development project.

The spend by the Government agency was brought to the attention of the Department of Culture and Arts last summer, when Catherine Martin held that portfolio.

It was not publicly disclosed at the time.

Arts Minister Patrick O’Donovan announced today that all activities of the Arts Council are to be subjected to an external review as a result.

The matter is also likely to come before the incoming Public Accounts Committee.

Raising the issue in the Dáil today, Social Democrats TD Aidan Farrelly questioned whether the Government “deliberately” sat on the report’s findings until after the general election last November.

A spokesperson for the Taoiseach said this evening that it is his understanding that neither the Taoiseach or Tánaiste were made aware of the overspend at the time.

Asked if the Taoiseach, Tánaiste or Arts Minister Patrick O’Donovan have made contact with Catherine Martin today in light of the overspend, a spokesperson for Tánaiste Simon Harris said he was “not aware” of any contact being made. 

In a statement, the Arts Council said today that the organisation greatly regrets that the project was not complete and that it is now engaging with its contractors with a “view to seeking legal redress”.

At Fine Gael’s parliamentary party meeting tonight it is understood Simon Harris told his party that he was “furious” at the spend. 

When the matter was raised at the meeting, Harris said: “This raises very serious questions about the governance and controls within this agency. This is the sort of issue that rightly infuriated the Irish people. I welcome the swift action of the new Minister today on this.”

Speaking to reporters today, Finance Minister Paschal Donohoe said that he was concerned with governance issues over the IT project and the relationship between the Department and the Arts Council.

“The government is extremely concerned about a report with regards to the IT system of the Arts Council that was presented to the Cabinet today,” he said.

Donohoe said he is particularly concerned with governance issues in relation to how the scheme was being developed but then actually not implemented within the Arts Council.

Secondly, he had concerns about the relationship between the Arts Council and the government department itself, stating that the length of time it took for these issues to be alerted was an issue. 

“All that being said, I do want to recognise the really good work the Arts Council does do, we have to do that.

“We have writers, we have musicians, we have filmmakers, we have dramatists who are doing so well across the world due to the support they have received from the Arts Council. That does have to be acknowledged,” added Donohoe.

‘Not prepared and inadequate oversight’

The secretary general of the Department of Culture initiated an examination of the Arts Council project last year and made 36 recommendations.

It found that the Arts Council was not prepared for the scale of the project and did not put in place adequate resources to deliver it.

The examination also found that the oversight, monitoring and reporting arrangements by the department over the lifespan of the project were inadequate.

O’Donovan said he has expressed “deep concern” to the chairperson and director of the Arts Council over “all aspects of the project”.

“The governance failures arising from this project must be addressed quickly in order to safeguard public funding and to prevent a recurrence of these issues,” he said in a statement. 

He said there are a range of “fundamental questions” about governance and culture within the Arts Council as to whether the corporate governance framework reflects best governance practice for state bodies.

Funding for the Arts Council has increased by 75% in recent years to €140m this year.

O’Donovan said it is vital that the taxpayer has confidence that these resources are being used appropriately and that waste is being avoided.

“I want to see these questions addressed as a matter of urgency and accordingly I have instructed my department to commence an external review of governance and culture at the Arts Council,” he said.

“The review will extend not only to capital projects but to all activities and expenditures under the remit of the Arts Council and will commence shortly.”

‘Regret’ that project was not completed

In a statement this afternoon, the Arts Council said that in 2018, it “requested sanction to develop new IT systems” as its “ageing online systems were presenting challenges and required improvement”.

Capital funding was approved and development of these systems began in 2019.

The Arts Council acknowledged that the project was “ambitious in nature”.

It said that two IT contractors were procured through the public procurement process to help us deliver this complex objective, but the project was “not delivered”. 

The Arts Council said it “acknowledges the significant expenditure on this project and the associated write-off of this expenditure of €5.3m.

Arts Council chair Maura McGrath said she is “deeply concerned at the non-delivery of this project and the costs incurred”.

“I have assured Minister O’Donovan that whatever measures and reforms are required will be rigorously pursued by me, the Arts Council Board and the executive. We will work with the Department to address this issue and ensure it cannot recur, and I have already initiated an external governance review.”

The Arts Council’s 2023 annual report can be read in full here.

PAC review

Social Democrats TD Aidan Farrelly said that full scrutiny of the millions wasted by the Arts Council “must be a priority for the incoming Public Accounts Committee”. 

Farrelly, who is the party’s arts spokesperson, said the revelation is “the latest in a litany of spending scandals involving the needless waste of taxpayers’ money”.

“I find it difficult to understand how so much money could be spent on a failed project. At what stage of its design or rollout did it because apparent that the system was not fit for purpose? This is the type of information that needs to be put into the public domain,” he said. 

“While it is welcome that the government has ordered a full external review of the Arts Council, new Arts Minister Patrick O’Donovan must still answer questions on this matter in the Dáil,” he said. 

“I am also calling for the Arts Council’s annual report and financial statements to be subject to a robust interrogation by PAC when the committee reconvenes.”

With reporting from Jane Matthews, Christina Finn and Press Association