The Arts Council is to cover a €196,000 loss which was incurred when a company to which it had transferred money went into liquidation.
The Oireachtas Public Accounts Committee has heard the money was intended for up to 10 small arts bodies in the area of film production and they would not have the ability to advance fund their own projects.
Comptroller and Auditor General Seamus McCarthy told the committee the Arts Council had transferred the money to a “third party” which was seen to be “best placed to process applications” from smaller bodies in the sector. However the third party, a company which was not named, went into liquidation.
Mr McCarthy said most of the money related to the 2017 accounting year, but some €26,000 predated that year. He said the explanation he had received for this was that the money was paid to the third party in January 2017, before the accounts for 2016 had been received. Therefore about €170,000 of the loss related to 2017 and €26,000 related to 2016.
‘Replacement funding’
Asked if the arts groups who were the intended recipients of the funding were out of pocket, Mr McCarthy said “the Arts Council is effectively undertaking to provide replacement funding.”
But he said the incident had revealed a “weakness” in the accounting system and the Arts Council had undertaken to put procedures in place to ensure it did not happen again.
However Independent TD Catherine Connolly told the committee “it is difficult to sit here and listen to this when so many arts groups are struggling”.
Chairman of the committee Sean Fleming said when the “Arts Council paid on the double” some other groups would have to lose out because the body had a finite budget.
David Cullinane TD said the arts council budget was €67million a year and he questioned whether the experience should have been classed as a “weakness” in the system, or a “failure” in the system.
Catherine Murphy TD said the money had been handed over the the third party before the previous 2016 accounts had been received “so that is a very obvious weakness”.
Summing up Mr Fleming said the committee would seek the name of the third party and check to see who were the principals of that company.
“We need to find out who the company was to know who or what we are talking about. We will do a Companies Registration Office search” he said.
Mr Fleming also said the Arts Council would be asked to contribute to the discussion. He said he did not accept the comptrollers’ comment that that the Arts Council was “putting procedures in place”. That he said was “total wool. That is woolly stuff.” he said.
