The emergence of unforeseen touring losses of €900,000 at the Abbey Theatre in 2004 comes despite the scrutiny of a finance and audit committee, which met more than once a month during the theatre's centenary year.
The new losses are in addition to the Abbey's budgeted deficit of €950,000, bringing its total loss for 2004 to €1.85 million.
Their effect is to cancel out a special stabilisation grant of €1 million that the Arts Council gave to the Abbey late last year.
With the Abbey in crisis mode last September after projecting a cumulated end-of-year deficit of €2.5 million, the board introduced a cost-cutting plan that was to reduce its core staff of 91 by 30 within 16 months.
It now appears that the real position was much worse. What is more, the theatre was five months into its new financial year before the true scale of its losses in 2004 came to light.
This happened last week when the Abbey's senior management team met the finance and audit committee to discuss the theatre's draft accounts for 2004. "That was the first time it became clear that there was an additional loss," said the theatre's spokeswoman.
Management prepared further documentation for a special meeting with the committee last Tuesday, in a series of events which prompted the departure of managing director Brian Jackson and artistic director Ben Barnes.
So how does the Abbey explain that no one detected the missing €900,000 until last week? "There was a series of systems errors and human errors," said the spokeswoman.
She said the losses did not go beyond last year and were attributed to tours undertaken by the Abbey during its centenary, including to the US and Australia. As these were ongoing from June to December, some of the financial information emerged only this year.
"Our accounting and financial reporting systems let us down . . . Nobody noticed the loss because information was not being included," she said. Asked why, she said the Abbey's internal systems were not working effectively "for current levels of activity and production".
The irony in all this is that the finance and audit committee was established as a subcommittee of the Abbey board in 2004 to add a layer of scrutiny over its finances in a year that saw a big increase in public funding for the theatre.
The spokeswoman said the committee was to meet monthly but met more often than that last year. Its members include: chartered accountant John Kavanagh, civil servant Jim McCaffrey, and arts consultant Eugene Downes.
The committee took office just as the Abbey's finance seemed to be improving after a €700,000 cut in revenue and capital funding from the Arts Council in 2003. The Abbey received an initial budget of €4.55 million from the Arts Council last year. As a mark of goodwill for its centenary, it received an additional €1 million from the Department of Arts, Sport and Tourism.
None of that was enough to ward off the crisis last September. Over and above the stabilisation grant, the Abbey was to have received another €1 million from the Arts Council pending completion of a reform programme. With €5.05 million in Arts Council funding this year, reform seems more badly needed than ever.
