Mr. Seamus McCarthy:

Go raibh maith agat a Chathaoirleach. Ar dtús ba mhaith liom a chur in iúl don choiste go bhfuil leagan Gaeilge den cúntas leithreasú, agus den chaibidil le fáil, má tá suim ag éinne iontu.

The Appropriation Account for Vote 33 - Arts, Heritage, Regional, Rural and Gaeltacht Affairs, reported gross expenditure of €368 million in 2016. This was distributed across five expenditure programmes, as indicated in the figure on screen. The largest programme was in relation to arts, culture and film, accounting for expenditure of just under €174 million or 47% of the total for the year. This included grants of €60 million to the Arts Council and €15.6 million to the Irish Film Board. Funding of almost €42 million was provided towards the general expenses of State museums and art galleries, with €21 million spent on cultural activities, including funding of €5.5 million provided to Culture Ireland. A total of €28.4 million was spent in 2016 on the programme for the Decade of Centenaries 1912 – 1922.

Chaith an Roinn €53.3 milliún ar a clár ar son na Gaeilge, na Gaeltachta agus na nOileán. Bhí san áireamh sa mhéid sin nach mór €21 milliún de mhaoiniú d’Údarás na Gaeltachta agus €13.3 milliún a caitheadh ar sheirbhísí do phobail oileáin. Caitheadh €13.5 milliún ar scéimeanna tacaíochta don Ghaeltacht agus don Ghaeilge, lena n-áirítear €639,000 d’Oifig an Choimisinéara Teanga. Caitheadh €1.9 milliún ar fhorbairt Theach an Phiarsaigh, rud a rinneadh mar chuid den tionscadal ‘deich mbliana na gcuimhneachán’.

Expenditure of €48 million under the Heritage programme included €17 million in support for natural heritage through the National Parks and Wildlife Service, grants to the Heritage Council of €5.2 million and support for built heritage totalling €4.5 million.

Under the Vote's North-South co-operation programme, the Department supports two cross-Border implementation bodies established under the Anglo-Irish Agreement. Waterways Ireland received €26.6 million from Vote 33, while the Language Body received €13.2 million. I audit these and five other cross-Border bodies jointly with my counterpart in Northern Ireland.

The final programme funded under Vote 33 in 2016 related to regional development and rural affairs. Responsibility for the programme transferred into Vote 33 as part of the restructuring of portfolios following Government formation in June 2016. Under a further reconfiguration in July 2017, responsibility for regional development and rural affairs transferred again to the newly formed Department of Rural and Community Affairs. Vote 33 was then renamed "culture, heritage and the Gaeltacht".

While responsibility for the programme was transferred into the Vote only at mid-year, the account presents the full-year Estimate and outturn for the programme in line with transfer of responsibility rules. As shown in the account, expenditure under the rural development programme in 2016 amounted to €51.7 million. The largest elements of expenditure were just under €25 million spent on national rural development schemes, €10 million spent on the Leader rural economy programme and €9.9 million spent on town and village regeneration. For comparison purposes, note 6.7 showing the change from year to year has been provided. It is not on the face of the appropriation accounts. I have also provided a diagram for members, which aims to summarise the public bodies within the Department's aegis. Members should note that the Western Development Commission has been under the aegis of the Department of Rural and Community Development since 2017.

I have given a clear audit opinion on the appropriation account. However, I draw attention in the audit report to non-compliant procurement disclosed by the Accounting Officer in the statement on internal financial control and to chapters 7 and 15 of my report on the accounts of the public services for 2016. Chapter 7 refers to the dormant account fund which was examined by the committee on 8 February. As noted then, oversight of that fund is now the responsibility of the Department of Rural and Community Development.

Turning now to the chapter, the report before the committee this morning concerns the administration and management of the provision of €8.4 million in public funds over many years to assist in the development of an art house cinema in Galway city. The largest funding contributions came from the Department, with a final contribution of €3.5 million, while Galway City Council contributed €2.4 million and the Irish Film Board contributed €1.1 million.

In 2006, the Department launched the second arts and culture capital enhancement support scheme, which is generally referred to as ACCESS II. The aim of the scheme was to provide cultural and arts organisations with funding to build new cultural infrastructure and develop existing facilities. A private company called Solas/Galway Picture Palace Teoranta applied for funding in 2006 under the ACCESS II scheme to establish a specialist art house cinema in Galway city. By May 2007, the total committed or projected public investment for the project amounted to €6.3 million, including a €2 million ACCESS ll grant. In 2008, Galway City Council purchased a site for just under €2 million and made it available to Solas under a 99 year lease. Solas applied for and received planning permission for a 360 seat cinema complex, which represented a 30% increase in capacity relative to the original proposal.

In July 2009, following a tender competition, Solas awarded a contract for the construction of the cinema and the project commenced in the months that followed. The project experienced significant difficulties and by June 2010, it became evident that an adjoining property was physically at risk and the work was stopped. Following negotiations, Solas agreed to demolish and rebuild the adjoining property in October 2010. In March 2011, the Department received notification from Solas that the building contractor was terminating the contract, citing poor ground conditions and design inadequacies.

A second construction contract was awarded by Solas in March 2012 for the remaining works. The Department stated this was done without its knowledge or consent. The first phase of the works covered by the second contract finished in early 2014. No further construction or fit-out followed until, in July 2016, agreement was reached for a private investor to be granted a 30 year lease to manage and operate the cinema in return for a contribution of funds. In July 2017, Solas entered liquidation. I understand the cinema has been recently completed and has now commenced operations, albeit some nine years later than originally planned.

While the project was developed by a private entity with grant and other funding assistance from public funds, in practice, the State bore the project and financial risks. There was no overall oversight arrangement in place for this project at the outset, despite the planned involvement of a variety of public agencies in funding it. When Solas ran into difficulties, Galway City Council stepped in to take over responsibility for the project and charges on the property were registered to safeguard the State's interests. I thank the Acting Chairman.