The quango has also pledged a “root and branch” review of the way funding decisions were made and a “reset” of its future priorities in the wake of widespread criticism across the cultural sector.
Janet Archer, who has been at the helm of the government body for nearly five years, admitted her organisation had caused “real difficulties” with its handling of more than Â£150 million worth of applications, adding: “None of us wants to repeat the experience.”
But she stopped short of agreeing to an independent review of how Creative Scotland was operating - despite MSPs being told that concerns over the accuracy of official reports on applicants were not passed on to its board.
Holyrood’s culture committee heard an admission from the quango that it was misleading to claim there was “unanimous” agreement over 100 per cuts for theatre companies working with children and disabled performers when serious concerns were raised at boardroom level.
Ms Archer told MSPs that the minutes of the crucial board meeting last month had since been altered to reflect the true nature of the internal debate, which led to the departure of two board members, Ruth Wishart and Maggie Kinloch.
An emergency board meeting later over-turned 100 per cent cuts imposed on five companies after transferring Â£2.6 million for each of the next three years from other budgets.
Ben Thomson, interim chair of the quango when it imposed 100 per cent cuts on 20 companies, who also apologised for the handling of the funding decisions, previously insisted they were “unanimously signed off by the board" on 18 January.
However committee convener Joan McAlpine said: "I've spoken to someone who was at the board meeting in January. You said the decision was unanimous, but it wasn't. The issues that have since hit the public realm, including taking money away from world-class companies in the disabled sector and cutting children's theatre in the Year of Young People, were raised by your board members, but you went ahead anyway."
Ms Archer and Mr Thomson both admitted at the committee hearing that there had been intense debate and "robust" discussions on the possible impact of its cuts before they were eventually signed off.
Mr Thomson said: “In any process like this there are going to be reservations. Everyone had reservations about certain things. Virtually every board member raised concerns."
Ms Thomson stepped in last July following the death of former STV chairman Richard Findlay. Creative Scotland’s new chairman, Robert Wilson, hosted his first board meeting on 15 February.
Ms Archer said: “The board has reflected on the use of the word unanimous on the minutes of the meeting in January and has now amended it to say it was a majority decision."
Ms McAlpine said: “That was quite a big mistake to say a decision has been unanimous when there has actually been a huge barney.”
Ms Archer said: “I’m profoundly sorry that the delivery of this process has been such a negative one for many. We can’t let that happen again. My role is to take ultimate responsibility for everything that Creative Scotland does.“I am currently in dialogue with everyone involved at every level in the process and I will make sure we learn from this moment and resolve all outstanding issues fairly and openly.
“I completely recognise that the regular funding process has been more challenging this time round than it needed to be – for both those applying and for our staff.”
However McAlpine said: “We’ve heard of inaccuracies during the evaluation of funding applications, last minute changes to decisions and instances where Creative Scotland reversed decisions for some organisations but not for others - without giving any explanation whatsoever. We’ve also heard about a lack of input from the sector and reports of poor communication both before and after the decisions were announced.
“It is deeply worrying that these concerns are being expressed about an organisation that manages public funds and we believe that it requires further scrutiny.”
Creative Scotland received an extra Â£16.6 million from the Scottish Government last year, including Â£10 million for the screen sector and Â£6.6 million to protect the organisation’s regular funding budget, which guarantees support for three years.
Ms Archer admitted that Creative Scotland’s settlement from the government had been “better than we expected,” revealing that in the autumn it had been planning for a scenario in which it would have to cut long-term funding from around half the organisations it currently supports.
However she insisted that the funding pot available for three-year deals for companies “effectively remains at standstill” due to the impact of lost lottery income and insisted her organisation faced substantial difficulties due to the fact it only discovered its funding settlement two months later than previously.
She added: “Making funding decisions is never easy, nowhere more so than in Scotland where creative talent and ambition far outweighs the funding we have available, particularly in the context of increasing reliance on Creative Scotland funding, as alternative sources of support come under increasing pressure.”