Three companies shared €4.8 million between them arising from the abandoned project to overhaul IT systems at the Arts Council.
The Arts Council is looking at a loss of at least €5.3 million on the project, which was beset by technical issues and delays, and has prompted a bitter political backlash over the waste of public money which looks like it has some way to run.
On Thursday, Social Democrats TD Aidan Farrelly wrote to the as-yet-unnamed chair of the Public Accounts Committee, asking that the Arts Council and Department of Arts and Culture officials be brought before it as soon as reasonably possible.
According to documents distributed to ministers at the Cabinet meeting on Wednesday or published by the Department of Arts and Culture, the main technology delivery partner, named in the documents as Codec, was paid a total of €1,967,278, including VAT, for its work on the project – with €51,217 withheld.
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Its responsibilities were to “design and develop the business transformation project ICT system” over a two-year period from 2020 to 2022.
A report released yesterday by the Department of Arts and Culture found that the Arts Council failed to calculate a final estimate of project costs before completing procurement with the technology delivery partner and that the scope of the project changed or expanded on several occasions.
The contract was originally for one year, but was restructured in July 2021. The department report outlines that early in the project, the Arts Council was “dissatisfied with the quality of deliverables”, and claimed changes were being made by the partner firm before discussions with the Arts Council, culminating in a formal escalation process in October 2020, after which the situation improved.
The technology delivery partner, according to the report, said that “business processes” needed by the Arts Council were “greater than expected”.
It also outlined that there were changes at senior level in the firm’s team during the project, with five changes in the project manager assigned to the work over two years.
There were a total of 17 “change requests” from the Arts Council undertaken as part of this contract, which the review found incurred a total of €707,770
A second company, named as Ergo, was paid a total of €2,107,206 including VAT across a series of contracts, several of which were extended during the project.
A third firm, named as Expleo, was paid a total of €734,701 including VAT, with another €149,125 withheld by the Arts Council, for quality assurance services from 2020-2022, although its initial contract was for nine months only.
The departmental review shows that its quality assurance partner played a role in deciding to cancel a “soft” launch of the system originally scheduled for June 2022 given the fact that testing was not completed and that active defects had been discovered during testing which “posed too much risk to the business”.
It also outlines that during testing, the firm had a “limited core group of internal testers” available to it, and while it tried to recruit volunteers to do the work, they were not always available or adequately trained.
Ergo, Expleo and Codec have been asked for comment.
The review also outlines payments to a series of consultancy firms among the contracts that were put in place in the course of the project. CPL provided business analyst services in a contract that was signed in July 2023, and extended twice afterwards, incurring a total expenditure of €267,033, including VAT.
Grant Thornton were brought in to provide a Chief Information Officer for the project at the start of 2023, for which it was paid €241,250 including VAT for a one-year contract.
BDO was paid €134,748 including VAT for “change management services” with a 13-month contract originally in place, which was extended by five months.
EY provided test analyst services for which it was paid €101,844.
CPL and EY had no comment when contacted.
BDO and Grant Thornton have been asked for comment.
Speaking in the Dáil, Tánaiste Simon Harris said “there will be consequences” for the almost €7 million waste of funds.
He said there were very serious questions for the council “because breaching the public spending code cannot be consequence-free”.
He also said “there are also issues in relation to the department’s oversight of the Arts Council and I don’t shirk from that either. That has to be a part of the review.”
Mr Harris warned that well-paid people should be expected to deliver. He held up a sheaf of documents and said he had been looking at “the table of the number of companies involved in this project”.
There was “spreadsheet after spreadsheet after spreadsheet, and people who made significant amounts of money out of this and profited and we don’t have a computer system.”
Labour leader Ivana Bacik said the IT project was “such a significant spend resulting in nothing”. It “raises questions about a cover-up by the last Government, many of whose members are now serving in this Cabinet”.
Ms Bacik also warned that “this unfortunate debacle must not be used to undermine support for the arts or for artists”.
Mr Harris said the issue had not been brought to the attention of the previous Government and it would have been preferable had it been.
He said he checked this morning with the secretary general of the Department of Arts and the Secretary of the Government.
“I believe the department adopted a view that they were endeavouring to get on top of the issue, I don’t think that’s a good position. It should have been highlighted and as much as a much earlier state.”
Earlier on Thursday, Minister for Arts and Culture Patrick O’Donovan said it was the second big issue that his department had faced in recent years, the other being RTÉ.
“It is a cause of huge annoyance and anger within Government and certainly from my perspective as well,” he said.
Speaking on RTÉ radio’s Morning Ireland, Mr O’Donovan said the investment may be lost and it’s not yet clear if any of the work undertaken will be of benefit to the Arts Council in the future.
The minister said the project was “drawn to a shuddering end” in July last year, and the secretary general at that stage initiated an internal review, which Mr O’Donovan published on Wednesday.
He had to be satisfied that there were no other issues, especially given the considerable budget of the Arts Council – €140 million.
“So, the first thing I am going to do is set terms of reference. I will go back to the Cabinet and seek approval from the Cabinet to initiate the investigation. And I hope to have those terms of reference concluded within the next fortnight or 10 days,” he said.
Mr O’Donovan said he was anxious to carry out the investigation as quickly as possible because “there is a systems failure here that is quite extraordinary really in terms of adherence to public spending codes”.
