Public bodies are under such scrutiny as they have never experienced before.
With the government committed to 25 per cent cuts and ministers required to come up with proposals for 40 per cent reductions in their departmental spending, public bodies must be seen to be whiter than white when handling public money.
As our schools, hospitals and local authority services feel the pinch, the impression that in some areas of the public sector there is still a free-for-all going on will undermine support and weaken our ability to fight against cuts that go too far.
So it is depressing to read that Arts Council England, according to a Charity Commission report, awarded a grant of £10,165 to a member of its national council. Also mentioned in the report were two other episodes in which trustees risked compromise by awarding funds to organisations they had close links with.
What on earth were they thinking? The report says that the trustees in question had acted in good faith, but surely the most basic rule for any trustee or council member, drilled into us all from the moment we take our places at the table, is that there can be no hint whatsoever of us or anyone close to us making personal gain.
The commission calls for more training on this issue, which is like footballers requiring training to understand that they must kick a ball when on the pitch. It is so basic I find it hard to imagine how these mistakes ever come about in the first place.
The resulting mess is all the more regrettable because, whenever there are cuts, the arts always seem to fare badly. Remember how starved of support they were the last time the Conservatives were in power?
There is a hardcore of Tory supporters who believe that any subsidy to the arts is giving money to 'lefties' who are incapable of spending it properly or accounting for it. Thus far into the new government, this faction has been relatively silent, but the report on Arts Council England risks confirming all their worst fears.
Here is an example I came across recently: a young woman I know, with a deeply troubled background but a talent for fine art, staged her first public exhibition of sculptures at a festival funded by a local authority.
Most of the pieces she put on display were sold, but there was a dispute over how much of the money raised should go to the festival. There was clearly a miscommunication that was nobody's fault - these things happen - but what sticks in my mind was a remark she made when I intervened in an attempt to reconcile the two parties.
"You're just naive - I know the sort of people who get grants from the council," she said, referring to the festival organisers. "They have all got their snouts in the trough."
What she said was untrue, ungrateful and unkind - but many people share her perception. Some sections of the population distrust anything to do with organisations funded by the public sector, a distrust that elements in the coalition government are now playing on, subtly but discernibly, to argue for more swingeing cuts.
Yes, the UK has a debt problem, although George Osborne has over-egged the crisis by comparing it to that of Greece - a point that reputable economists from across the spectrum reject. And, yes, we certainly have to cut that debt - as Peter Mandelson has remarked of New Labour's dying days in his controversial memoir, "we were in a pit of debt and we kept digging".
But there is a danger that sensible and necessary steps to rein in expenditure blur into an ideological aversion to the publicly funded sector - including charities that receive funds from the public purse. We must guard against this militant tendency rising to the top.
The behaviour of Arts Council England, as shown in the Charity Commission report, does none of us any favours in trying to hold our ground - and our grants.
Peter Stanford is a writer and broadcaster, chair of Aspire and director of the Longford Trust