Mr. Seamus McCarthy:

It was actually administering a scheme. I do not have the details but I can read the section from the statement on internal financial control, which is on page 60 of the Arts Council Annual Report 2017:

The Arts Council paid one of the organisations recurrent grant funding of €225,000, funding for exhibition support of €25,000 and €170,000 to fund an arts programme administered on behalf of the Arts Council.

In March 2018, the Arts Council became aware that the organisation had not in fact paid the 2017 grants to the intended beneficiaries. The organisation went into liquidation shortly afterwards.

Following legal advice, the Arts Council has undertaken to honour all payments due. The Arts Council has estimated that a total of €196,000 is due to intended beneficiaries including some amounts in relation to previous years. The 2017 financial statements recognise a provision for the full amount due. The Arts Council has no realistic prospect of recovering these amounts from the grant funded entity, now in liquidation.

In general, the Arts Council prefunds organisations in advance of expenditure being incurred, and has the sanction of the Department of Culture Heritage and the Gaeltacht and the Department of Public Expenditure and Reform to do so. The Arts Council’s control processes include advancing of funding to organisations in tranches and verification processes to obtain assurance that conditions have been met before the next tranche is advanced. However, the full amount of funding for the arts programme was advanced to this organisation in one tranche in January 2017, and before the 2016 financial statements were received. The Arts Council plans to review its controls over funding to outside organisations in particular where funding is provided in one tranche. It also plans to review its processes for assessing the financial viability of grant funded organisations.