Statement by Minister O’Donovan on Arts Council 2023 Annual Report & Financial Statements

Statement by Minister Patrick O’Donovan on the Arts Council 2023 Annual Report and Financial Statements and the Report on the Examination of the Arts Council Business Transformation Project.

The Arts Council’s 2023 Annual Report and Financial Statements were submitted to my department last summer and brought to my attention on taking office two weeks ago. Within the annual report are details of an unsuccessful IT system development project at the Arts Council. The accounts include the Comptroller and Auditor General’s report, which notes an overall loss of value in respect of that project estimated at €5.3 million, up to June 2024. The total cost of the project to date is €6.675 million.

In light of these developments, the Secretary General of my department initiated an examination of the Arts Council project last year. This examination contains a number of key findings and 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.

In addition, clarifications were sought by my department in August 2024 under the financial reporting framework and accounting treatments under which it scrutinises annual reports and accounts. Responses to these queries were received from the Arts Council in late October 2024.

Today I brought the Arts Council’s report and accounts to Government. I met with the Chairperson and the Director of the Arts Council last week to convey my deep concern regarding all aspects of the project. The Arts Council have committed to implementing the recommendations contained in the examination. My department has put in place a range of actions to address the shortcomings in oversight which were highlighted in the examination.

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. The Annual Report and Financial Statements have been laid before the Houses of the Oireachtas and published on the Arts Council’s website. A copy of the examination can be found on the department’s website.

While the report on the examination sets out clearly the background to the project, it also points to a broader range of more fundamental questions about governance and culture within the Arts Council as to whether the corporate governance framework reflects best governance practice for State Bodies as set out in the Code of Practice for the Governance of State Bodies and complies with the provisions of all relevant legislation, including the Public Spending Code. Assurance is also required that the culture of the Arts Council, at all levels, is open and transparent and that it engages with all stakeholders, both internal and external, in a manner appropriate to its statutory remit to develop the arts.

Funding for the Arts Council has increased by 75% in recent years to €140 million in 2025. This is a very significant investment by Government on behalf of the taxpayer in supporting artists and developing the arts in Ireland. It is vital that all stakeholders can have confidence that these resources are being used appropriately, that the operations of the Arts Council reflect best practice 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. 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.