What Are SPPAO Grants, Who Gets Them, and Why?

The Newfoundland & Labrador Arts Council, recently rebranded to ArtsNL, is non-profit Crown agency created in 1980 to “foster and promote the creation and enjoyment of the arts for the benefit of all Newfoundlanders and Labradorians.”

They receive about 1.6 million a year from the provincial government to fund numerous granting programs. One of which is their “Sustaining Program for Professional Arts Organizations (SPPAO Grants),” whose purpose is to support local, non-profit arts organizations by easing the financial burdens of their administrative, operating, and production costs.

Doing so gives these organizations a more stable financial footing, so they may continue to provide our province with arts & culture in the form of events, festivals, publications, plays, films, and more. These grants are supplementary income, no different than the funding given to other industries and economic engines in our province – from tourism to innovative technologies. The arts industry is a substantial employer in our province, and according to Stats Canada, it’s an industry worth over 400 million a year to our province.

Because there is only so much money in the pot for these sustaining grants, not every organization that applies gets a grant. ArtsNL pays a jury, in tax dollars, to vet applications, over the course of 1-2 months, before they meet and spend a full day arguing over who should get the money they asked for, how much of it should they get, why, or why not.

SPPAO Grants run in 3-year cycles. To get the money they’re owed in years 2 and 3 of the cycle, they’re required to submit paperwork to ArtsNL by a given deadline, that proves they’re still in good financial standing, and doing what they said they’d do with the money, etc. Failure to do so can result in the termination of their grant money.

What is the Controversy This Year, and Who is Being Affected?

In 2018, at the start of the 2nd year of this SPPAO cycle, 3 vital organizations had their funding revoked on account of what many are arguing is a moot technicality.

The organizations are the Folk Arts Society, best known for running the annual Folk Festival at Bannerman Park as well as Folk Night at The Ship every week, Riddle Fence – one of the best literary journals in the country, which showcases local artwork, essays, poems, short stories, and more in its magazine and its numerous events throughout the year, and thirdly, the Gros Morne Summer Music Festival.

The latter is now referred to as GMSM, because after 14 years in operation, they have grown from a small classical music festival into a year-round celebration of performing arts on the west coast of Newfoundland, and home to things worth Googling if you’re unfamiliar, like Old Crow magazine, the Liminus Institute, and the newly formed Graham Academy, a year round youth training program that allows them to work with and mentor talented children on the west coast of Newfoundland. (The Executive Director of GMSM was traveling while this article was being written and could not respond to questions, so they will be omitted from this discussion to prevent speculation.)

A Computer Program is Bearing the Blame

Everyone can agree these grants hand out considerable money and the organizations receiving them should be expected to competently complete paperwork associated with these grants.

Where the controversy comes into play here, is whether or not Riddle Fence’s and Folk Arts Society’s singular, technical omission warranted the punishment

In a press release, the chair of ArtsNL’s board wrote, “Each of the organizations whose ‘Year Two’ reports were rejected had significant omissions with respect to required support material, or they had otherwise failed to satisfy the clear compliance regulations outlined for this publicly funded grant program.”

It’s the pluralization of omission that has sparked issue #1 here. In the case of Riddle Fence and Folk Arts Society, there was but 1 omission in their year 2 report. And it was the same info in both cases: 2016 financials were improperly entered into a software program.

CADAC is a financial data software program where arts organizations input information for their Review Engagements. This information is prepared by their accountants. For instance, Grant Thornton prepared Riddle Fence’s Review Engagement.

While these organizations had this required financial information from their accountants, they failed to enter it properly in the CADAC system. And in both cases, only for the year 2016 (years 2017 and 2018 were entered fine). Somewhere in the mix of rushed reporting from local media, and somewhat exaggerated press releases from ArtsNL, it was also insinuated these organizations missed their deadline as well, which was not really the case.

The trouble was, by the time the CADAC issue was identified, the deadline had passed. This happened because these 2 organizations submitted their reports the day of the deadline, so the error associated with CADAC was discovered after 5pm on deadline day.

What we’re left with is this: these organizations submitted physical reports, on time, and this paperwork had everything ArtsNL needed, including 2016 financials. However, some of this information had to also be inputted in CADAC, and it was entered erroneously, on account of either human error or technical glitches. For this, they’ve had their funding cut.

Why Be So Black and White About It?

Stickler, is the word. So why is ArtsNL being so rigid? The answer, from the horse’s mouth, is as follows:

While Riddle Fence and Folk Arts did in fact submit their 2016 financials (review engagements) on time, in the form of physical paperwork, they weren’t asked to submit this information in print in a report. They were asked to submit via CADAC. And it wasn’t there by the deadline, so the submission was deemed incomplete.

Again, arguably militant. But ArtsNL’s response to that is that they begin engaging with organizations 2 months before the deadline, to avoid scenarios precisely like this: had everyone caught the missing info in CADAC sooner, they could have remedied the error by inputting the information before the deadline. These submissions came in hours before the deadline, so errors couldn’t be worked through together.

That’s a fair enough retort, yet it implies submitting on deadline day is at all uncommon. You, reading this article, have likely submitted something on deadline day, and it’s important to remember that non-profit arts organizations are typically run by 1-2 employees, and a board of volunteers that are easily burnt out (by this sort of ordeal), so it’s not like anyone was sitting around, twiddling thumbs here. These reports are a lot of work, and that work was absolutely done properly. A small portion of it, one year’s worth of financial info, was merely entered wrong. On their end, ArtsNL maintains that that is not insignificant, and represents 33% of the required financial information.

Also, CADAC is hardly an easy, intuitive program to use, especially for non-accountants and non-IT workers. But it wasn’t ArtsNL’s decision to switch to CADAC 5 years ago. It’s something they started doing after an engagement process with local arts organizations. Everyone felt using CADAC for financials made sense, as it’s what the Canada Council for the Arts uses.

Another burning question here was if this drama is unprecedented. According to ArtsNL, this is the first time CADAC cost someone money, or perhaps more accurately, the first time CADAC errors were unable to be resolved in time to save an application.

From a PR standpoint, or even in general, ArtsNL has a retort for every query, and yet, arguably, this is still nothing short of a technicality. It’s a messy situation.

Media Has Misrepresented Both Sides of It to Date

If there’s one PR pitfall on ArtsNL’s end, it’s been the misleading nature of a press release that declared there were “significant omissions with respect to required support material,” when in fact it was just the one, in both cases: issues with 2016 financials as reported in CADAC.

The statement has led to this ordeal being misinterpreted in media to date, but that blame is on media fact checking.  These organizations did not make multiple, nor grave errors. No deadline was missed. Yet this was the story put forward, and the story that became popular opinion. The publishing of unchecked, verbatim press releases left the impression these organizations had their funding revoked because they nonchalantly missed deadlines and handed in sloppy reports. This was not the case. In this era of rushed stories being fed into the social media machine, yesterday’s news gets buried before we can process it, react to it, and understand it.

Is Their Fear Fair, Or Was it Costly Caution?

ArtsNL maintains that they have to come down this hard on Riddle Fence and Folk Arts Society, for fear of being audited. They say they’re given over a million dollars annually from the government and subject to audits from the Department of Finance and the Office of the Auditor General, and therefore, they can’t take the chance that cutting these 2 some slack would jeopardize ArtsNL, and its granting programs, for everyone else.

This fear begs another question: would the government really kick up a fuss over this, during an audit? ArtsNL says yes, they’re dealing with public funds, so not following clear compliance in handling this money could have dire consequences. No one in the Department of Finance could go on the record in time (or at all) to either confirm or deny this worry for this story.

It’s a matter of personal opinion whether ArtsNL should be playing things that safe and black and white, but it’s a matter of fact that pulling the money to play it safe does have grave consequences. Any company needs to know its bottom line at any given moment to plot its next move, like booking bands for a festival, or not; going to print, or not. A company can’t just hit pause while they reassess, without deadlines, obligations, and opportunities blowing past them.

In a letter to ArtsNL, upon hearing their funding was revoked, they wrote, “Due to a technicality, funding that was to sustain us will not be available again for years. This is not an inconvenience for Riddle Fence. It is devastating.”

John Drover, chair of the Folk Arts Society, echoes the sentiment. He says the amount revoked was to be used for office rent, operating expenses, and staff wages. “We will obviously have to find that money elsewhere, whether that means cuts to our existing programs, or an inability to take on new projects.”

These are grim words from luminous, local organizations. Outside of MUN’s student journal, Riddle Fence is the only literary journal in a province known as Canada’s literary goldmine, and Folk Arts’ Society is the most prominent player in folk and traditional music in a province that exploits our musical heritage as a tourism draw. It is awfully hard not to want to afford them a little grace on a technicality in exchange for the nationally acclaimed arts industry they are maintaining for us.

In their retort to the rescinding of their funding, Riddle Fence said, “The reason the system exists at all is to fund the arts. And de-funding [us] due to a small technicality within a system that can be, let us be honest, incredibly confusing (especially for volunteers and employees already stretched to the max on shoestring budgets) is, I am certain, not the point. This is not a case of our organization simply not doing the work or ignoring deadlines. This was a good faith error after massive amounts of work and effort.”

At the heart of the issue here is the fact that ArtsNL is seen as an administrator. There is an argument to be made that these grants are not theirs to revoke. Government earmarks money for them to allocate to art organizations, with the understanding they will assemble and arrange a peer assessment (jury) to decide who gets that money. Withdrawing money from Folks Arts Society, Riddle Fence, and GMSM, after a jury painstakingly decided they were 3 very deserving entities does not sit well. The jury did its job, and these three organizations earned that money through their work to date in the community, and through their convincing application.

But as it turns out, it appears we, the arts community, agreed to this model in a consultation processes: a jury would decide who gets the 3 years of funding at year 1, but ArtsNL staff make the call on them getting the 2nd third of their money, and 3rd third of their money at years 2 and 3, based on reports that prove they’re financially sound and doing what they said they’d do with the grant. ArtsNL also does not identify as an administrator but as a funding agency.

For ArtsNL it all comes down to them saying they could have done more if the reports came in sooner, and that they extended these courtesies 2 months in advance. There’s little doubt these courtesies were extended. The staff at ArtsNL are good and caring employees who clearly care about the work they do, and the organizations they support. This article is not judging or discussing anything but the case at hand: the contentious rationale behind why these organizations have had their sustaining grants revoked. It’s up to whoever is reading this, based on the facts presented here, if that was a fair or unfair decision.

So What Now?

Traditionally, revoked funding from sustaining grants would be redistributed to other organizations who applied for funding at the same time. ArtsNL staff would use the peer assessment review to decide where to allocate the money. At the moment though, the fate of this funding is currently on hold, because Folk Arts is suing ArtsNL for rescinding their funding. The money is frozen until the trial ends.

It’s a sad affair that is being seen from both sides of the argument by different people, depending on their inclination, and that’s what’s tough here. Rules weren’t meant to be broken, no, but they were meant to be fair, make sense of complex ordeals, and bring more harmony to the world. This ordeal is not fair, simple, or harmonious for anyone involved.  That’s one thing, at least, everyone can agree on.