The appropriation account for the Vote for Arts, Heritage and the Gaeltacht recorded gross expenditure of just under €256 million in 2013. The expenditure was incurred under four programme headings, as indicated in the figure on screen. As members of the committee can see, the arts, culture and film programme accounted for almost 50% of the total expenditure of €125 million. The other programmes are heritage, which had a total of €8.1 million; Irish language, Gaeltacht and islands, €41.8 million; and North-South co-operation, €40.2 million.
Much of the programme expenditure in the Vote is in the form of grant payments to a wide variety of statutory bodies and agencies in the culture, heritage and language sectors. The Department’s functions in relation to those bodies include policy development, legislation, expenditure sanction and general oversight. The range of bodies includes intermediate grant allocation bodies, such as the Arts Council, the Irish Film Board, An Foras Teanga and Údarás na Gaeltachta, and bodies and agencies carrying out specific statutory functions, such as the National Library, National Museum, Irish Museum of Modern Art and Waterways Ireland. The Department also pays some grants directly to certain other public bodies not under its direct aegis, including local authorities, and to community and voluntary and some private sector bodies in the cultural, heritage and Irish language sectors.
Figure 2 presents an overview of the main bodies within the Department’s funding remit and an indication of the Department’s relationship with those bodies. The level of grant funding the bodies received from the Vote in 2013 is also shown. A variety of accounting and governance arrangements are in place in respect of the bodies. As members of the committee can see, the National Parks and Wildlife Service and the National Archives are both part of the Department of Arts, Heritage and the Gaeltacht. The range of bodies includes the Arts Council, Heritage Council, An Foras Teanga, and Údarás na Gaeltachta. All of those are grant-paying public bodies. The other bodies include the Irish Museum of Modern Art, the Crawford Gallery, the National Museum and the National Library. The National Concert Hall and the Chester Beatty Library are bodies which receive substantial funding but they are not audited by me. The rest of those bodies indicated are audited by me. As I have mentioned, the National Archives and the National Parks and Wildlife Service are divisions of the Department itself, and expenditure by those bodies is accounted for in the Vote appropriation account, rather than in separate annual financial statements.
As I have also mentioned, most of the bodies directly grant funded by the Department are audited by me, and their financial statements are therefore subject to review by this committee. I should also point out that An Foras Teanga and Waterways Ireland are North-South bodies. Under the 1998 British-Irish Agreement, they are audited jointly by me and by my counterpart in Northern Ireland. As a consequence, those bodies are accountable both to this committee and to the Public Accounts Committee in the Northern Ireland Assembly.
The committee is also considering chapter 9 of the report on the accounts of the public services for 2013, which concerns accounting for National Gallery of Ireland expenditure. While the gallery is formally under the aegis of the Department of Arts, Heritage and the Gaeltacht, in the past it was not grant funded by the Department. Instead, it had its own Vote Estimate up to and including 2014. Financial accounting provisions in respect of the gallery are also set out in the National Cultural Institutions Act 1997. As a result, the gallery is required each year to produce both a cash-based appropriation account and accrual-based financial statements. Both have to be audited and presented separately to Dáil Éireann. Considering the scale of operation of the gallery, which had a turnover of the order of €8 million in 2013, this seems a disproportionate reporting requirement.
The gallery has sources of non-voted expenditure from activities such as retail shops, a restaurant, donations and benefactions, fund-raising, exhibitions and sponsorship. Over the three years 2011 to 2013, this funding amounted to an average of 17% of the annual net Exchequer grant. These receipts are not recognised in the gallery’s appropriation account but are included in the accrual financial statements. As a result, the latter give a more complete view of the operations of the gallery and of its financial position. In addition, the gallery has been using some of its non-voted income, with the approval of the board, for the purposes of charging some operating costs that would normally be funded from the appropriation account. The total of costs charged to own resources was €298,000 in 2013 and €156,500 in 2012.
I concluded that this use of, and accounting for, non-voted income effectively bypasses the spending limit control which is a core objective of the annual Estimates process, and the gross accounting principle required under public financial procedures. I recommended that consideration should be given to including all resources of the gallery within the appropriations process. Alternatively, consideration should be given to treating the gallery, like other national cultural institutions, as a grant subhead within the Estimate for the Department of Arts, Heritage and the Gaeltacht, with timely financial reporting on a comprehensive basis. The Department of Arts, Heritage and the Gaeltacht agreed that in the interest of transparency, Exchequer funding for the National Gallery should in future be provided through a subhead of the Vote for Arts, Heritage and the Gaeltacht. As a result, the National Gallery Vote ceased to operate on 31 December 2014, and the dual financial reporting requirement will cease once the 2014 accounts are presented.
The National Library of Ireland is another autonomous national cultural institution under the provisions of the National Cultural Institutions Act 1997. Certification of the library’s financial statements in respect of 2012 was delayed due to the discovery by the library in August 2013 of the theft of a significant quantity of material from its collections. The board of the library has made a disclosure in the statement of internal financial control in relation to the investigation of the theft and the action taken by the library to prevent a similar occurrence in the future. Given the significance of the loss and the circumstances involved, I drew attention to the disclosure in my audit certificate. The financial statements of the library in relation to 2013 were certified by me on 23 December 2014. Those financial statements have not yet been presented to Dáil Éireann and therefore my observations are limited to the 2012 financial statements.
The National Library receives almost all of its funding by way of an Oireachtas grant. The amount received by way of Oireachtas grants has decreased each year and the amount received in 2012, which totalled €7.1 million, represented a decrease of about one third when compared with 2009.
The library cut its costs over the period 20009 to 2012 but had not succeeded in reaching a break-even or a surplus position by 2012, when it recorded an overall deficit of €484,000. The library has significantly reduced expenditure on acquiring collections, the digital library and education and outreach services.
The audit certificate attached to 2012 financial statements also drew attention to the appointment by the library of interns and students on short-term contracts during 2011 and 2012. A general recruitment moratorium was in place and staff appointments required the sanction of the Department of Arts, Heritage and the Gaeltacht and the Department of Public Expenditure and Reform. We were unable to establish whether the library had obtained the required sanction. The total amount paid to the interns and students in 2012 was €183,000. This matter was further examined as part of the 2013 audit of the National Library and all appointments, including interns and students, had been approved by the parent Department with effect from 1 January 2013.