Mr. Feargal Ó Coigligh:

I am pleased to have the opportunity to appear again at the Oireachtas joint committee and to have the opportunity to support the committee in its ongoing examination of the failed Arts Council business transformation project, BTP.

On the occasion of our most recent meeting, I referred to the findings of the report on the examination of the Arts Council business transformation project, which was published last February. Copies have been shared with the committee. The report found that there were governance failings in the Arts Council, and that, in respect of certain aspects, these failings were mirrored by failings in the Department's oversight role.

From the invitation received from the committee, my understanding is the main focus this evening relates to the engagement between the Arts Council and the Department regarding the project. This issue was examined in detail by the Department's report and I refer the committee in particular to chapter 7. There are a few points which I would like to note. After the initial grant of sanction, all decisions in regard to the project, including increases in the budget beyond the approved level, were taken by the Arts Council. The Department's approval was not sought. More broadly in terms of communication with the Department in that period, any correspondence was part of a much larger regular back and forth with the Arts Council on a very wide range of issues of an oversight and policy nature.

Speaking specifically about correspondence instanced by the council, following the discussion at the previous meeting of the committee, I asked my staff to examine the records concerned. The subject matter of the correspondence is as follows: ten relate to updates on the project provided at liaison meetings with the Department; 20 relate to the overall workforce plan for the council and other HR matters; 11 are the council sending on PowerPoint presentations given to its board about the BTP; and the remaining 17 cover issues such as BTP budget increases and timelines, the Storm report, arranging meetings, and press queries. Nineteen of them are after January 2024, when the decision had been made by the council to review the project and when most of the €6.675 million had been expended. The Department engaged actively with the Arts Council on all these matters through that period.

As late as September 2023, the Arts Council reassured the Department at the quarterly liaison meeting that the project was within budget and working towards going live in 2024. In an earlier letter in August 2023, the Arts Council assured the Department that "our new project governance structure is now working effectively and a revised launch timeline of Q3/4 2024 has been agreed by the Council".

In relation to staffing, the Department works within the processes set down centrally by the Department of public expenditure. It is notable that the overall approved staffing level for the Arts Council increased from 47 in 2018 to 146 in 2024. Since 2020, the Department has approved 162 delegated sanction requests from the council. These delegated sanction requests, that is, to employ new people, have taken an average of 14 working days to approve.

Regarding ICT staff, again, the Department was as supportive as it could be within overall the context of its oversight role and processes laid down centrally. It was not possible to approve posts at the level sought by the Arts Council due to the grade structure of the organisation, but the Arts Council was advised to advertise at a lower level and to revert if it could not attract suitable applicants at that grade. This was communicated to the Arts Council in July 2022, October 2022 and April 2023. Ultimately, in early 2024, the council advertised at that level and successfully recruited a director of business transformation programme at the grade of AP higher and, again, in March, when it successfully recruited an ICT director at the grade of AP higher.

The work of the Arts Council is essential to the development of the arts in Ireland. I remain of the view that, where support was requested, the Department tried at all times to support the Arts Council to successfully deliver the BTP and that, if anything, we failed to challenge it sufficiently at key moments. It is essential the lessons are learned and that we can move forward with confidence to further support the arts in Ireland.

The code of practice for the governance of State bodies provides a framework for the application of best practice in corporate governance by commercial and non-commercial State bodies. It specifies that the board is “collectively responsible for leading and directing the State body’s activities” and that the “board and management of the State body are accountable for the proper management of the organisation”. Similarly, under the code of practice, the role of the Department is one of oversight. The Department ensures the State body operates within the broader policy framework set down by the Government and that it remains accountable for its performance. The Department also operates a range of general oversight and liaison arrangements in relation to the bodies under its aegis consistent with the requirements of the code. All these arrangements are in place in respect of the Arts Council.

The matters are now the subject of a review put in place by the Minister and being carried out by an expert committee chaired by Professor Niamh Brennan. The Minister has made clear his commitment to the full implementation of all recommendations arising from that review. He has also made clear his concerns about the role of the Department in this project and the need for the Department to continue its work with the Institute of Public Administration, which I initiated when I took up the role of Secretary General, to bring further improvements and consistency to the Department’s governance and oversight functions.

There is another matter I would like to address as I have the opportunity, that is to correct the record with regard to a number of statements that were made when we previously appeared. It was stated that the business transformation project was wholly funded out of capital allocation and this is not the case. As shown in the Department’s report, €1.99 million of the €6.675 million is current funding. Also, regarding the costs of the legal redress, a figure of approximately €60,000 was mentioned as the cost to date. The Arts Council has since informed the Department that it is actually approximately €119,000.

The Department of Culture, Communications and Sport is staffed by civil servants who take seriously their responsibilities to stakeholders, agencies, the Minister, the Government, the Oireachtas and the people of Ireland. We support agencies in both a collegiate and challenging fashion to ensure compliance with their obligations and, critically, to deliver good outcomes for the public. This has been seen in recent years in the development and roll-out of the basic income for the arts pilot project; the response to the challenges posed by Covid-19 in the areas of sports, live performance and the arts generally; the delivery of the national broadband plan providing essential high quality connectivity to people in rural Ireland; the provision of modern sports facilities; and the development of a fit-for-purpose regulatory framework for the rapidly evolving media landscape.

The oversight shortcomings in relation to issues which have arisen in a number of our agencies in recent years is a matter of regret and I have taken steps to address these during my period as Secretary General. However, they do not take from the great service which the Minister and the Department is providing to communities the length and breadth of Ireland.