Arts Council 'greatly regrets' €6.7m IT failure, PAC hears
The Arts Council has said it "greatly regrets" spending €6.7 million on a complex IT project that was later abandoned, the Public Accounts Committee has heard.
The council confirmed that it is now pursuing legal cases against two of the IT contractors involved in the failed project.
Arts Council chairperson Maura McGrath said that in relation to the IT system failure the project was "not and is not an optional extra".
"It began out of necessity, and it is a necessity that remains to be addressed."
She also questioned the expectation that "small state bodies set up for specialist purposes" should be expected to "carry the load on complex IT projects".
Ms McGrath added that the Arts Council "accepts the findings" of the Examination Report published by the Department of Arts in February this year.
Arts Council Director Maureen Kennelly said that council began this project to modernise its IT systems and integrate five systems into one, explaining that the systems date from 2008, are not integrated and are difficult to use.
Everything on this project was procured under public procurement guidelines, she said, adding that the council used the Office of Government Procurement framework, and the main contractor was on the OGP approved ICT framework.
She added that the council "engaged external contractors to manage and deliver the work, as we did not have the internal resources to deliver this large-scale project".
Ms Kennelly said that as the council approached their expected delivery in September 2022, a year later than initially planned, "multiple bugs were discovered".
The sub-standard work meant the project could not move forward to completion. The council then ended contracts with both the testers and developers, she said.
She added that they changed the developers, project governance and management structure and began work to "rectify and complete the programme".
Ms Kennelly then said that the council was ultimately advised that the system was "too flawed to rectify in a reasonable timeframe".
She said that system development was then paused, and it stopped following a board decision, with the input of the office of the Government Chief Information Officer, in June 2024.
The effect of this decision was an overall loss of value of €5.3 million, which was reported to the C&AG and included in the 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, lack of internal expertise, poor performance by our contractors and also, the impact of Covid-19 all contributed to the project failure."
Ms Kennelly explained that the council has commenced legal proceedings against two contractors and is in the pre-action stage in relation to two others, adding that the council is "vigorously" pursuing the cases to reduce the loss to the taxpayer.
She also said that they have senior ICT expertise in-house now and are in the process of implementing all recommendations relevant to us from the department's examination report.
Secretary General of the Department of Tourism, Culture and Arts Feargal Ó Coigligh told the PAC that his department had "failed" to properly exercise its oversight function.
He added that they "should have intervened more actively and much sooner" to reduce the exposure of the taxpayer to this failed project.
The minister has established an Expert Advisory Committee, led by Professor Niamh Brennan, to review the Governance and Organisational Culture in the Arts Council, said Mr Ó Coigligh.
A parallel review of the department's internal governance operations is also under way with the assistance of the IPA.
National Gallery of Ireland
A team from the National Gallery of Ireland will also appear before the PAC to explain why it purchased a scanner for €125,000, that has yet to be made operational.
The X-ray machine purchased in 2017 will be operational by the end of the year, the National Gallery of Ireland has said.
National Gallery Director Dr Caroline Campbell said issues around the storage of the scanner led to a contract being awarded for the construction of a "dedicated lead-lined cabinet".
Dr Campbell said that the manufacturing of the X-ray cabinet will "commence shortly", with the expected delivery, installation and operation of the X-ray system, before the end of the year.
She added that all costs associated with it will be borne from the resources generated by the National Gallery and not from the Exchequer.
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