Arts Council review to include role of auditors and accountability of board

Auditing of spending at the Arts Council is to come under the spotlight as part of a sweeping review of the organisation to be undertaken by external experts in the wake of a €5.3 million loss on an abandoned IT project.

Draft terms of reference for the review, which is to be approved by the Government shortly, also show that external experts will be asked to examine the role, composition and operation of the board of the Arts Council, as well risk management by the organisation and its oversight by the board.

The review is to be led by Prof Niamh Brennan, who chaired the expert advisory committee examining the governance and culture of RTÉ after the broadcaster was engulfed by scandal in 2023. The Institute of Public Administration (IPA) is to lead a parallel review into the Department of Arts and Culture itself.

Minister for Arts and Culture Patrick O’Donovan is expected to bring the terms of reference for Cabinet approval next week.

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The terms of reference outline that it will examine the oversight and management of third-party suppliers, including their accountability, as well as compliance by the Arts Council with legislation, public policy directives and circulars.

The accountability of the board and its chair to the Minister and the department will be examined, as will the accountability of the director of the Arts Council to its board.

The terms of reference explicitly ask the review to address the question of both external and internal auditing in the Arts Council, as well as internal controls, risk management and the visibility and oversight of the board of its operations – including oversight of spending and expenditure reporting. A spokeswoman for the Arts Council said its external auditor is BDO. The firm was contacted for comment on Friday evening.

The review will also address the role, composition and operation of the audit and risk committee of the Arts Council’s board. Two other external experts will be appointed, alongside Prof Brennan: John McCarthy, formerly the top civil servant at the Department of Housing, and corporate governance lecturer Margaret Cullen.

In parallel with Prof Brennan’s review, the IPA will be drafted in – for a second time after it reviewed the department in the wake of the RTÉ scandal – to examine the adequacy of risk management in the Department of Arts and Media, among other matters.

The IPA will also be asked to extract lessons from the Arts Council episode for the department, particularly in terms of governance oversight and project management. Communication channels across the department will also be examined by the IPA, including escalation measures – particularly mechanisms that should alert senior management to issues as they emerge.

Ministers will also be told that Mr O’Donovan has instructed that all bodies under his department disclose details of spending on capital projects above €500,000 – and also that they make a further disclosure about other projects where spending is below this threshold but where projects were abandoned or fell substantially short of their objectives.

The controversy at the Arts Council follows a lengthy scandal arising from undisclosed payments made by RTÉ to its then-star presenter Ryan Tubridy, which also engulfed Mr O’Donovan’s predecessor Catherine Martin.

Earlier this month it emerged that the Arts Council spent almost €7 million on an IT project designed to overhaul its digital systems, but that the project ultimately was abandoned after years of cost overruns and delays.

The disclosure sparked a firestorm of controversy and it is expected to be examined by the Public Accounts Committee once it is established by the Dáil. The Opposition have also questioned whether the previous government sat on the controversy until after the general election. Ms Martin has said a decision was taken to bring the report of the Arts Council to Cabinet once an internal review was complete. That was finished earlier this month.