Call to ease 'use it or lose it' rule on State funding

RULES REQUIRING statutory bodies to spend their allocations in the year provided or risk losing them back to the exchequer should be altered as they pose a risk to obtaining value for money, a Dáil committee heard yesterday.

The Comptroller and Auditor General John Buckley said such accounting regulations often put considerable pressure on organisations to spend money in a short timeframe and could force them to depart from some recommended practices.

“Accounting rules should be neutral and people should not be forced to spend money,” he said.

Mr Buckley was speaking at a Public Accounts Committee which was addressed by the directors of the Arts Council and the Abbey Theatre about their respective funding and spending in 2006.

The committee heard the Abbey Theatre’s business plan that year called for some €849,000 in capital, but it was eventually awarded €1.73 million on the condition it was spent by the end of the 2006.

Most of the funding was drawn down and spent on invoices received for upgrading works at the theatre, following the appropriate guidelines.

However, as December approached the Abbey informed the Arts Council contracts had been agreed, but ongoing works would not be completed before the end of the month and the remaining €286,000 was placed in an escrow account. The money was drawn down in full during February 2007 and paid for upgrade works to the theatre’s interior.

“We had difficulty getting people to do jobs for us and I acknowledge we did not stick to public procedure guidelines,” Abbey director Fiach MacConghail said.

John Thompson of the Department of Finance said a deferred surrender plan had been drawn up which allowed bodies to carry over capital funding if they identified a figure of up to 10 per cent of their budget, before the end of the year.

“The use it or lose it situation should be abated,” he said.