Statement by Minister Patrick O’Donovan on the Review of Governance and Organisational Culture in the Arts Council

I am today announcing the details of an external review of the governance and organisational culture in the Arts Council. Two weeks ago, I brought to Government the Arts Council’s 2023 Annual Report and Financial Statements, as well as a report on an unsuccessful IT project at the Council. This project, which failed to deliver and cost €6.675 million, has given rise to fundamental questions about governance within the Arts Council. I have been clear that these governance failures must be addressed quickly in order to safeguard public funding and to prevent a recurrence of issues of this kind.

At the meeting of Government today, I presented the terms of reference for the external review which will be conducted by an Expert Advisory Committee. I will be appointing three experts with a strong background in the governance of large and complex organisations to the committee: Professor Niamh Brennan (Chair), Dr. Margaret Cullen and John McCarthy. The committee will ensure that the review process is robust, fair and transparent, and will lead to practical, actionable recommendations to improve the Arts Council’s governance arrangements. I will keep Government informed of the review’s findings as it progresses.

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. I wish to restore trust and confidence in the Arts Council. The public must be satisfied that the Arts Council’s corporate governance framework is fit for purpose and supports the delivery of its statutory responsibilities. Assurance is also required that the organisational culture of the Arts Council, at all levels, is open and transparent and that it engages appropriately with sectoral stakeholders.

Further to this, I also presented to Government the draft terms of reference for a review of my department’s internal governance operations focusing on governance, risk and escalation processes. This review will assess the learnings for the department from the Arts Council project, the adequacy of its risk management procedures and the escalation measures to alert Management Board of the department to relevant issues.

The review will ensure that the department has a comprehensive and effective oversight and governance framework for all bodies under its aegis to ensure full compliance with all public policy directives. My department has also written to the bodies under its aegis to seek details of capital projects being implemented with a cost of at least €500,000 or other projects where there has been significant expenditure which were abandoned or have materially failed to deliver, in order to provide assurance around financial management and value for money principles.

Terms of Reference for the Review of Governance and Organisational Culture in the Arts Council

1. Consider whether the Arts Council’s 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 all relevant legislative provisions.

2. This review will include but is not limited to:

• procurement
• oversight and management of contracted performance with third party suppliers, including their accountability
• overall project governance, including project planning, design and management (including IT projects)
• compliance with the provisions of all relevant legislation, public policy directives and circulars
• role and composition of the Board of the Arts Council (“The Board”)
• the operation of the Board, including the visibility to, and oversight by, the Board of the operations of the Arts Council and the Board’s oversight of expenditure and expenditure reporting
• the accountability of the Board and its Chair to the Minister, the department and the Oireachtas and the reciprocal channels for that accountability, providing assurance that the Arts Council complies with the stipulations attached to its Oireachtas grant and funding and that the department provides the Arts Council with the necessary advice, guidance and oversight consistent with its parent department role, including under the Code of Practice for the Governance of State Bodies
• the accountability of the Director to the Board
• the role, composition and operation of the Audit and Risk Committee of the Board
• external and internal auditing in the Arts Council
• risk management by the Arts Council and its oversight by the Board and the Audit and Risk Committee
• internal control system in the Arts Council

3. Review the Arts Council’s work practices at board level and below-board level and assess evidence of any organisational-level cultural issues, arising from the business transformation programme issue.

4. This review will apply but is not limited to the following areas:

• appropriateness of the legislation and regulations applying to the Arts Council
• capacity and capability to deliver on the Arts Council’s statutory remit
• the Arts Council’s relationship with key sectoral stakeholders including the department and relevant representative organisations, in terms of appropriately delivering on its statutory responsibilities as set out in the Arts Act 2003 in an open and transparent way

5. Where applicable, make recommendations to the Minister on any required reforms to the Arts Council’s corporate governance framework, organisational culture or legislative basis, or in relation to any issues in the governance relationship with the department, to ensure robust governance practices are in place to deliver value for money for the exchequer and to support adherence to government policy and practices and effective disbursement of public monies.

To avoid duplication, the Review will build on the department’s Report “Examination of the Arts Council Business Transformation Project” (2025).

Membership of the Expert Advisory Committee

• Chair: Professor Niamh Brennan, Emeritus Full Professor at University College Dublin. She founded the UCD Centre for Corporate Governance in 2002
• John McCarthy, former Secretary General at the Department of Housing and Local Government; and
• Dr Margaret Cullen, Corporate Governance Lecturer and Governance Advisor

Draft Terms of Reference of Review of the department

The review will assess:

- the learnings for the department from the Arts Council BTP, specifically in terms of governance oversight and project management

- the adequacy of the measures undertaken to date, in relation to implementation of the recommendations of the IPA report, training, ICT Tracker, Risk Management, Capital Inspection, and ICT Capacity along with further proposed measures

- the information/communication channels in operation across the department, including escalation measures with a particular emphasis on the mechanisms to alert senior management / Management Board to relevant issues

- the adequacy of the risk management procedures/policy currently in operation across the department

- the processes and procedures around appointments to State Boards with an emphasis on the skillsets required for effective board membership and operation

- any further changes to governance processes in the department that is deemed appropriate and necessary on foot of the review to ensure that value for money is obtained, and that the department has a robust, comprehensive and effective oversight and governance framework for all the bodies under its aegis to ensure that there is full compliance with and adherence to:

• the 2016 Code of Practice of the Governance of State Bodies
• Public Financial Procedures
• Grant Circular 13/2014
• Public Procurement Guidelines
• Circulars and Guidelines on Digital/IT projects and initiatives
• Rules and Guidelines on Ethics and Propriety
• relevant conditionality and requirements specific to a body
• other rules, guidelines and requirements relevant to this review

The arrangements for this review will be finalised shortly and the department has had preliminary discussions with the Institute of Public Administration in this regard.