Ms Maureen Kennelly:

Ar dtús, ba mhaith liom a rá go bhfuil fíorbhrón orainn. This morning, I wish to start by reiterating the deep regret expressed by our chair. The Arts Council began this project in 2017 to modernise our IT systems and to integrate five systems into one. Our systems date from 2008; they are not integrated and are difficult to use. Everything on this project was procured under public procurement guidelines. We used the Office of Government Procurement, OGP, framework, and the main contractor was on the OGP-approved IT framework. We engaged external contractors to manage and deliver the work, as we did not have the internal resources to deliver this large-scale project.

As we approached our expected delivery date in September 2022, a year later than initially planned, multiple bugs were discovered. This substandard work meant the project could not move forward to completion. We ended contracts with both our testers and developers, changed the developers, project governance and management structure and began work to rectify and complete the programme. However, following review and attempted reworking, we were ultimately advised by new IT consultants at the end of 2023 that the system was simply too flawed to rectify in a reasonable timeframe. System development then paused, and was stopped following a board decision, with the input of the OGCIO, in June 2024. The effect of this decision was an overall loss of value of €5.3 million, which was reported to the Comptroller and Auditor General and included in our 2023 annual report and accounts.

Throughout, we provided information and discussed with our colleagues in the Department how increasing costs were to be funded from within our capital grant. In summary, a lack of internal expertise, poor performance by our contractors and the impact of Covid-19 all contributed to the project failure. We have commenced legal proceedings against two contractors and are in the pre-action stage with regard to two others. We are vigorously pursuing our cases to reduce the loss to the taxpayer.

I am glad to say that we have senior ICT expertise in-house now. We have identified and implemented improvements to our procurement and project management processes. We are in the process of implementing all recommendations relevant to us from the Department’s examination report. Throughout the duration of this project, the Arts Council has consistently delivered on its core work through our flagship programmes, partnerships, advisory work and direct grant aid. In 2023, for example, we awarded grants to 588 organisations and 1,880 individual artists through a variety of direct grant schemes. We supported 140 festivals, 318 schools, 31 local authorities and 201 diverse arts projects. When we started this project, we received 3,000 grant applications per year; last year, we received 8,600. Distributing grants effectively and in a way that protects taxpayers’ interests is core to our job and requires robust IT systems. Unfortunately, our challenge with regard to Arts Council systems functioning efficiently remains. We have been supporting the development of the arts in Ireland for 74 years. Art is critical to the health of our country.

We deeply regret that this ambitious and complex project was not completed. My colleagues and I happy to answer any questions the committee may have.