The Arts Council breached the public spending code, did not follow governance rules for State bodies and probably contravened EU procurement procedures in its dealings with a failed computer project which led to a loss of at least €5.3 million, the Cabinet has been told.
Ministers were furious at revelations about the project, which was abandoned last year. Minister for Public Expenditure Jack Chambers described the episode as “a massive waste of money”.
Minister for Arts and Culture Patrick O’Donovan told Cabinet that in 2019 the Arts Council started a business transformation programme aiming to bring together five existing systems including those dealing with grants.
The project was to be developed over 2½ years with a budget of just under €3 million.
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Taoiseach Micheál Martin and Tánaiste Simon Harris are understood to have been highly critical at Cabinet over the revelations.
Mr Harris is said to have told Cabinet the revelations came on the heels of the RTÉ scandal, while Mr O’Donovan was “scathing” of the Arts Council and of his own department. A Cabinet source said the Government believed it was facing a “significant” issue – with Ministers understood to have discussed how it was a bigger version of the Oireachtas bike shed controversy.
Mr O’Donovan said the project ran into difficulties, particularly with the operability of the core infrastructure. Last June, following a technical review, the Arts Council scrapped the project, by which time €6.5 million had been spent.
Ministers criticised both the Arts Council and the Department of Arts, maintaining the oversight, monitoring and reporting arrangements were inadequate. Mr O’Donovan said there were a number of governance failures within the Arts Council.
[ Arts Council mothballs multimillion overhaul of ICT systems after years of delaysOpens in new window ]
Mr O’Donovan and Mr Chambers said the cost of the project had not been adequately or properly estimated, nor was a final estimate given as required under the public spending code.
They maintained that between 2021 and 2024 the Arts Council approved additional funding without this being authorised, also required under the code.
Mr Chambers said that the Arts Council “frequently changed and extended contracts with certain suppliers, going over the allowed limits for cost increases in several cases”.
“These actions likely contravene public procurement procedures. Additionally, exceeding prescribed contract value limits without re-tendering also breaches EU procurement rules on substantial modifications to contracts,” Mr Chambers told Cabinet.
“The Arts Council also failed to report these breaches in the chair’s [annual] letter to the minister, as required by the code of practice for the governance of State bodies.”
Mr Chambers said he had “serious concerns” in relation to governance and oversight by the department, which “did not have appropriate representation on project governance structures” which had been specified when it had been sanctioned.
Mr O’Donovan and Mr Chambers maintained there had been “no formal process” for the department to monitor compliance, report to its management board or to escalate warnings to senior officials or the minister.
