Story in tonights Evening Express - http://www.pressandjournal.co.uk/displayNode.jsp?nodeId=84106&command=displayContent&sourceNode=83936&contentPK=9902042 FURY AT LEMON TREE DEBT 16:00 - 10 May 2004 A top Aberdeen concert venue has notched up huge losses. The Lemon Tree ran up a 140,000 deficit for the last year. Finance chiefs and councillors say they were repeatedly reassured through 2003 by senior staff that the venue was breaking even. But the figures released by Lemon Tree director Kathy McArdle in February suddenly revealed wide-scale inaccuracies in previous monthly reports on the accounts. End of financial year losses of 100,000 were then forecast. Problems included: Double counting grants as income. Counting grants intended to cover three years as a single sum for 2003/04. Wrongly adding up sponsorship cash. Over-estimating income and under-estimating expenditure. The figure soon mounted to 140,000 after a more detailed investigation by city finance chiefs. Chairman of the board of directors Scott Cassie this week resigned in disgust and frustration with the finances and with the management of the city council-funded venue, which is lauded as one of the finest in Scotland. Mr Cassie has told board members and officials that he has no confidence in Ms McArdle's ability to run the East North Street performance place. No board member is suggesting money has been misappropriated. Sloppy accounting is being blamed for the mess. The venue has had its successes, attracting top names like Sir Bob Geldof. Legendary American singer-songwriter Suzanne Vega is due to play there next month. But relations between Lemon Tree Trust board members and senior staff are said to have to have broken down as the true financial figures emerged earlier this year. Mr Cassie tendered his resignation on Wednesday with a stark warning that the Lemon Tree "is drinking at the last chance saloon". He told the Evening Express: "I resigned because I have had enough of the place. "We did not get the financial information that we were expecting. "We were anticipating that financial matters were in order. "It transpired that they were not. "I was assured, the board of trustees was assured and the city finance department was assured that it was breaking even." Mr Cassie said the effort to sort out the mess had taken a toll on his family life, prompting him to quit. The Lemon Tree Trust was wound up last month and is being replaced by a new company called Lemon Tree Aberdeen Ltd, which will fully take up the reins in September. The move, planned many months ago, was designed to put the Lemon Tree on a more business-like footing. Mr Cassie, who chaired the previous board of trustees, became chairman of the new board of directors in April. The 16 trustees, made up of 10 councillors and six people with an interest in arts administration, stood down. The new organisation now has five councillors on the board of directors and 11 other members. One non-council member, Jackie Doyle, has already quit. The new directors believed they were going to be running a company which was breaking even but are understood to have been shocked by the scale of the losses they feared they might inherit. But the future of the Lemon Tree, which opened in 1993, has now been secured after resources management committee members agreed to offer the venue extra cash to cover the losses. A confidential report on the financial foul-up was discussed behind closed doors by the council's resources management committee in April. The committee passed the matter to the powerful standards and scrutiny committee to investigate. Standards convener councillor John Porter said the issues had been dealt with by his committee in private. He refused to reveal the committee's ruling. But council insiders have confirmed that the city's auditors are probing further. Ms McArdle and former general manager Karen Laing have been accused privately by some members of the board of trustees for the allowing finances to slide. Ms Laing left earlier this year to take up a job with the University of Aberdeen. A new general manager, who unlike his predecessor is a qualified accountant, is now in post. Mr Cassie has told trustees that he believes that the buck stops with Ms McArdle as Lemon Tree director. She has been asked to attend a meeting of the board of the new company on Thursday to explain how the Lemon Tree finances went astray. The city council funds the venue to the tune of 199,000 a year and gives it a further 40,000 from the Common Good fund. Ms McArdle declined to comment on the Lemon Tree's accounting problems. She referred queries to the acting chairman of the new board, John Loveday. Mr Loveday confirmed that the city council had bailed out the venue. He said the new board was starting with a clean slate and all previous problems were the responsibility of the previous trust. Mr Loveday said: "We are taking the place forward. "This is a new start for the whole board. "There is a tremendous range of expertise there. "We intend to run the Lemon Tree in a different way - the board will have a much more hands-on approach. "It will be run as a business and we will have to look very carefully at our finances, how we do things and how we pay for things. "The city council is the main funder so we have to keep our noses clean. "The Lemon Tree is already one of the best venues in Scotland. "We intend to make it even better." Finance 'mismanagement' claim The Lemon Tree's books revealed a catalogue of accounting failures. Grants which were supposed to be spread across three years had been added in total to the 2003/04 accounts. Single grants from public bodies were also listed under a number of headings and were double-counted. Sponsorship cash had been added up wrongly. Income from the venue's music, dance and theatre programmes had been over-estimated. The Lemon Tree also underestimated how much it was spending on acts booked to play there. A confidential report by finance chiefs to councillors states: "The budget figures did not reflect accurately the true activities of the organisation." The Lemon Tree Trust's finance sub-committee was reviewing the financial figures monthly. But the report says: "While questions were repeatedly raised regarding figures, repeated reassurances were provided by the Lemon Tree management that the finances were in order. "Further intensive investigations are ongoing to establish why this level of deficit has arisen." City council accountants say the full picture may not emerge until the trust's annual accounts are finalised in June. An internal email, seen by the EE, from new board member John Wood to several fellow members sums up the feelings of the new body. It states: "The financial mismanagement over the last few years would not have been tolerated in any properly run organisation. "The first action of the new board must be to make sure that sound financial management controls are put in place before any more money starts haemorrhaging." Mr Wood says Ms McArdle should attend Thursday's board meeting to explain herself. He adds: "I feel that failure to satisfy the board with satisfactory answers to these points, which surely are fundamental to the director's post, should result in a review of her employment." Ms McArdle was appointed as the new boss of the venue in summer June 2002. She was previously the artistic director of the renowned Projects Arts Centre in Dublin.
