Abbey Theatre’s €7.5m funding for 2022 comes with conditions attached

Following a report into the Abbey Theatre’s financial controls and governance, the €7.5 million funding for the national theatre this year, which the Arts Council has approved, has a number of conditions attached.

A report by independent auditors Mazars was commissioned by the council last November, some months after it learned of a number of controversial payoffs by the national theatre to its former chief executives/co-directors Graham McLaren and Neil Murray.

Mazars delivered its report to the council in late March but the Arts Council has declined to publish it or make any of its findings known.

It has, however, confirmed to The Irish Times that its approval of funding for the Abbey this year has “a number of conditions” attached, which “seek to safeguard the expenditure of public monies now and into the future”.

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Those conditions involve “reviews of policy and procedures” in “procurement, HR and behaving with integrity, leading people, working effectively and being accountable and transparent”, the council has said.

The conditions for funding also cover monitoring and reporting on board appointments; information on co-productions and the cost base for the Peacock Theatre; and “a culture audit of the organisation”.

The Abbey, now led by artistic director Caitríona McLaughlin and executive director Mark O’Brien, “has signalled its full commitment to working with the Arts Council to ensure these conditions are satisfied so that the organisation can continue to grow and develop as a leader within the arts in Ireland”, the council confirmed. The term of the Abbey’s chairwoman, former ESRI director Dr Frances Ruane, ended late last month. The chair is appointed by the Minister for Arts, and no announcement has yet been made. Deputy chairman Michael Owens is understood to be currently filling the role’s functions. Dr Ruane is eligible for reappointment for another four-year term.

Mazars was asked late last year to review finance and governance at the Abbey following media reports that the Abbey’s handling of the departures of Mr McLaren and Mr Murray earlier that year, and its management of another matter relating to Mr McLaren only, had led to a number of settlements to the former directors, totalling about €700,000 including legal fees. Neither the council nor the Abbey has confirmed or denied this figure.

The alleged €700,000 is nearly one-tenth of the Abbey’s annual public funding (€7.5 million this year).

It is understood the Abbey co-operated with the Mazars audit.

Asked about the reason for commissioning the Mazars report, the council pointed out a requirement that “public money invested by the Arts Council is used in pursuit of the creation of work and the development of the arts for the ultimate benefit of the public”, and also said it had a right to “separate independent assurance with regard to the expenditure of grant aid”.

When asked about settlements, the Abbey response has been: “As you know, the Abbey Theatre does not provide details on contractual terms in relation to current or former employees.”

The Arts Council’s €7.5million subsidy this year to the national theatre, at the same level as 2021, is, the council says, for productions on the main stage, the Peacock, touring plans and its community and education work, as well as core and staff costs.

A key point of interest in the Mazars report – whether draft or final - is whether it got to the bottom of why settlements were paid, and where the money came from.

Part of the money was for termination payments.

On February 23rd, 2021, the Abbey announced new directors, Caitriona McLaughlin and Mark O’Brien, would be taking over in July 2021, when Mr Murray and Mr McLaren’s five-year term finished.

According to the 2020 Abbey accounts, the ex-chief executives received €165,256 as “termination amounts payable”, after “the board approved restructuring of the leadership positions”, with the existing joint chief executive roles abolished and two new leadership roles created. The accounts also show €11,000 “legal costs for concluding the termination agreements”.

Because the Abbey has been unable to discuss the matter, these references in the accounts are the only indication of what went wrong in the handling of a change of leadership at the Abbey, which led to significant termination payments, despite the outgoing directors’ fixed five-year terms having run their course.

The Irish Times understands the overall figure – €700,000 including legal fees, as the cost of payments to the former directors – is correct. Given the figure for termination payments in the Abbey’s accounts, that appears to leave an additional €500,000-plus (undoubtedly including significant legal fees) in settlements of some sort unaccounted for.

Mazars was also tasked with examining Abbey governance, following ongoing Arts Council concern, for example regarding a board reappointment in July 2020, later acknowledged by chairwoman Dr Ruane as an “inadvertent corporate governance lapse”, in documents released to The Irish Times under a freedom of Information request. At other times Abbey board membership has been seriously depleted. The board currently has eight members.

Heavily redacted documents seen by The Irish Times show a flurry of communications at the top levels of the Arts Council and the Abbey for several months in 2021, believed to be on foot of the discovery by the Arts Council – from a third party rather than directly from the Abbey – of a number of financial settlements paid to Mr McLaren and Mr Murray. The correspondence appears to show the council seeking information about the payments. Mazars were appointed shortly afterwards.

In March 2019 – two months after a public letter of concern from theatre professionals about the Abbey’s model of production at the time, and its negative impact on the wider “ecosystem” of Irish theatre – it was reported that the Abbey was believed to have received three letters from people formerly employed at the theatre, complaining about separate incidents.

Two were understood to be from former Abbey production or crew employees, and the third from a performer.

The letters were to the Abbey board, believed to have been sent initially through the trade union Equity (part of Siptu, representing theatre workers). At the time, Equity would not comment on the issue, citing the confidentiality of complainants and the integrity of the procedure.

It is unclear how the Abbey handled the complaints after this or how the matter was resolved. In response at the time, the Abbey Theatre said it does not comment on individual HR matters.

The Irish Times understands payments were not made to complainants.