Government 'approach to acquiring, managing and leasing' works for art rental program not 'appropriate', audit finds

Run by the Infrastructure, Transport, Regional Development, Communications and Arts department, the program supports the art sector and artists by renting out their work.

But the Australian National Audit Office found that the department's "approach to acquiring, managing and leasing Australian contemporary art under the Artbank program has not been appropriate" in recent years.

The audit found that when acquiring artwork, the department did not act in line with Commonwealth procurement rules nor did it have an "open or competitive processes".

Similarly, it found the department's approach to renting out pieces hadn't been "appropriate" and there was a lack of clarity on how most of the artwork rental prices were set.

Since 2017/18, the program's revenue from leasing out work has also been decreasing because much of the collection spent more time in storage than out on loan, with the department only renting out around 40 per cent of it.

"Thirty per cent of the Artbank collection, while available for lease, was not rented at all between July 2015 and June 2022," the audit report stated.

"A further 29 per cent of the collection was leased for less than half of the time the work was available for lease."

The program's ability to support artists is tied to the revenue it receives from renting out works and although the budget for new art purchases was "relatively stable", actual spending - and consequently support for artists - has been decreasing since 2016/17, the report stated.

In 2016/2017, the program spent $507,993 to acquire 179 pieces of work but that dropped to $396,462 in 2021/2022, with only 75 works purchased that year.

The report also found that the program's "acquisition approach" didn't target the intended "cohorts of artists" and that most of the work had been acquired from commercial galleries.

Furthermore, the department's management of the $42 million collection "has been insufficient to ensure the integrity of the collection", the audit found.

"Records of deaccessioning, the formal removal of artworks from a collection, are unreliable," the audit report stated.

"Approvals were obtained retrospectively for the deaccessioning of over 70 artworks from the collection, with the records for those approvals not identifying that the artworks had already been disposed of via sale over four years earlier."

The audit made a series of recommendations, including to create "a fit for purpose procurement framework" in line with the Commonwealth procurement rules and "open and transparent opportunities" for artists to submit their art for acquisition.

The government department said it broadly supported the audit's recommendations but argued the program had also suffered as a result of COVID.

"The department took actions during the COVID-19 pandemic, to safeguard the revenue earnings of the Commonwealth," it stated.

"Like most commercial businesses, the pandemic had a profound impact on Artbank's ability to perform business as usual activities from 2020-22, a significant component of the time covered in this audit."

In response to the assessment that Artbank didn't operate in line with Commonwealth procurement rules, the department stated that the program was relying on a rule that allows artworks to be "acquired through limited tender".

Department secretary Jim Betts, in a letter accompanying the department's response, also wrote that while he acknowledged the audit office was looking to help the department improve the program's "performance", he was "concerned that aspects of the narrative may unduly and adversely impact the reputation and operation of Artbank".