The Abbey Theatre is set to record a deficit of around €900,000 this year, the Dáil Public Accounts Committee was told yesterday.
The committee heard how in the aftermath of a major financial crisis earlier this year, the national theatre is to be restructured. A new operating company and a new board are to be established shortly, and the existing National Theatre Society Ltd is to be dissolved.
Comptroller and Auditor General John Purcell said his office had received assurances from the Abbey board that its financial deficit for 2004 would be around €110,000. However, actual losses for the year were in the region of €1.85 million.
A report by consultants KPMG subsequently concluded that accounting errors, misreporting of revenues and poor financial controls led to significant under-recording of the losses.
Mr Purcell said the Abbey Theatre recorded a financial deficit of nearly €600,000 in the first six months of this year and that this was projected to reach €900,000 by December 31st.
The Abbey's new director of finance Declan Cantwell said the root of the problems had been that there was little investment in accounting and financial reporting systems.
He said management had been forced to make assumptions on costs and revenue, but that the actual revenue and cost figures were different from those set out in the management financial reports.
Fianna Fáil deputy Michael Smith said the deficit recorded in 2004 ran to some 15 per cent. He said he was staggered that this could occur when "hardly anybody knew".
The new director at the Abbey Fiach MacConghail said a new management structure had been put in place in recent months.
He said "the two biggest beads on my rosary" were the continuation of the Abbey as the national theatre and the proper management of public money. The new operating company would have legal requirements in relation to its financial and audit committee, and alarm bells would go off early in the event of future problems, he added.
Mr MacConghail said the Abbey would be looking for a substantial increase in State funding. The provision of State funding on a year-by-year basis also caused difficulties, he said.
