Accountants Mazars told the Department of Arts, Culture and the Media that they “have not identified any benefit to RTÉ” by making barter accounts purchases.
In the 24-page interim report published on Friday, the accountants said the value received from making such purchases “appears to be the same or similar” to the alternative of cashing out on the available trade credit balance.
[ What is a barter account? Meaning of term at centre of RTÉ controversyOpens in new window ]
Mazars also said RTÉ “does not appear to have a formally approved policy and procedure in place” for purchases made through barter media agencies.
It went to say such purchases “do not appear to be subject to” the same formal approval requirements that applied to general purchases. “These purchases do not appear to be based on formal procurement or quotation procedures applicable to general purchases,” Mazars said.
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“The cumulative amount of purchases through barter media agencies does not appear to be tracked as part of monthly budgetary reporting.”
In addition, Mazars found access to barter account purchases did not appear to have been limited to an approved list of RTÉ staff.
A barter account is a kind of trading account used in the media industry, although RTÉ has been ridiculed for using its account to buy flip-flops for party guests, balloons and concert tickets.
Such accounts have been at the heart of the RTÉ controversy since the beginning of the affair, when the State broadcaster disclosed hidden payments to Ryan Tubridy via a UK company in a deal with Late Late Show sponsor Renault.
It soon emerged that RTÉ had used the same accounts to entertain corporate clients on sports junkets, prompting political claims that organisation was running a “slush fund” for hospitality. The spending included €110,000 on travel and hotels to the 2019 Rugby World Cup in Japan, 10-year IRFU season tickets at the cost of €138,000, and €26,000 on the 2019 soccer Champions League final in Madrid.
Although RTÉ provided Mazars with a code of conduct containing staff guidelines for gifts and entertainment, the accountants said the code did not set specific thresholds or approvals required that “could be applied” to barter agency purchases.
“RTÉ explained that the code is a principles-based code and for that reason thresholds are not contained within it in respect of gifts and entertainment but that RTÉ personnel are expected to adhere to the principles of ‘honesty and integrity in the conduct of business activities’, ‘loyalty to RTÉ’, and ‘confidentiality’,” the report said.
RTÉ confirmed to Mazars that it maintained its own record of purchases with barter media agencies.
Still, the accountants noted that supporting evidence such as invoices, receipts and booking forms relating to such purchases were “not stored by RTÉ in an easily accessible manner”. As a result, detailed searches of more than 1,400 emails relating to the period under review were required to identify whether such evidence existed.
Although RTÉ said it accounted for barter agency purchases through with year-end adjustments in its books from 2019, that did not take place for 2017 and 2018.
The unused balance of trade credit accounts with barter media agencies were not accounted for in RTÉ's financial accounts prior to an adjustment made as part of RTÉ's year-end and external audit process in respect of the 2022 financial year.
The report also said that €7.4m in advertising revenue was generated through the barter media agencies over the five-year period from 2017 to 2022.
Alarming gaps
The Mazars report “again sets out alarming gaps in internal policies, procedures and controls that existed in RTÉ,” said Minister for Arts, Culture and Media Catherine Martin.
Ms Martin said: “This lack of properly documented policy and procedures for using the account, and an apparent lack of checks and controls over who used it, is not befitting a public service organisation, and cannot be repeated.”
Speaking to journalists, Ms Martin said the use of the barter account and the loose controls suggested it was used to hide purchases outside of proper oversight and controls.
“It definitely raises questions there as to was it being used to avoid proper oversight to hide certain purchases, that’s what we can see here,” she said.
While she said she would await the final report, she said: “that’s what it’s indicating”.
“Was it being used to avoid proper oversight? Was it being used to hide certain purchases? There is an absence, we can see, of budgeting reporting for barter account purchases. Normal procurement procedures simply weren’t there.
“There was actually no threshold in relation to goods and services, there was no formal list of staff who could make purchases to the barter account”
She said: “It’s an utter lack of proper procedures and controls that one would expect from our national public service broadcaster”.
Defending herself against accusations that she had been absent from public appearances regarding the crisis at RTÉ, she said she had moved quickly to establish independent inquiries, while her department had handled hundreds of queries. She also said she had suffered a close family bereavement over the summer.
Asked about potential cost cutting measures at RTÉ, Ms Martin would not be drawn on specifics beyond pointing out that Mr Bakhurst has started talks with presenters and was liaising with staff. She said his intention was to share plans for a register of interests with unions representing RTÉ staff next Monday, and hoped that it would be in place in the following weeks. She said there would be sanctions for those who breached compliance rules associated with the register
She said that there was an appetite for answers but warned that there was no “quick fix” for issues at RTÉ and that she wanted to give space for the forensic examination to take place. Long term funding decisions, she said, would be made after examinations were completed.
Asked if she believed RTÉ had fully disclosed all the transactions on the barter account to Oireachtas committees examining the matter, she again deferred to the publication of the final report. “We will find out in October,” she told reporters.
“I’m not going to make a judgement call on the interim report,” she said. When it comes to the long term funding of RTÉ, rather than a budget bailout to shore up the finances of the broadcaster, she said she had intended to do so before the summer recess but a decision had been stalled due to the crisis - but that she wanted it to be done in the lifetime of the government.
She said she expected RTÉ to come forward with a “strategic vision” in the coming weeks.
Ms Martin criticised transparency to date at RTÉ, pointing out it was very hard for Mazars to find information, with the firm having to trawl through 1,400 emails on the barter account. But she said the new DG and chair were the faces of reform.
She said the forensic report by Mazars was likely to cost in the region of €300,000.
Regarding compulsory redundancies, Ms Martin said Mr Bakhurst would make an assessment as DG, but she said she was concerned that the interests of staff were safeguarded.
Meanwhile, RTÉ director general Kevin Bakhurst has sought to draw a line under the controversy around the severing of the broadcaster’s relationship with presenter Ryan Tubridy and focus instead on reforming the station.
Mr Bakhurst, alongside RTÉ chair Siún Ní Raghallaigh met Minister for Arts and Culture Catherine Martin on Friday afternoon, before the publication of the Mazars report. “I don’t want to talk about Ryan any more. I don’t think it’s fair on Ryan,” he said, when asked about the presenter’s current contract and pay status.
The director general said he felt people in RTÉ “accept we had to make a decision about that”.
“One of the reasons we made the decision is we have to move on, there are some really important things to do with the organisation and I’ve really got to turn my mind to that, about the funding issues, but also about governance and the changes I’ve already said I’m going to make, and actually drive and deliver those and I’m intent on doing those,” he told journalists.
He indicated he was taking a hands-off approach to identifying Mr Tubridy’s successor in the 9am slot on RTÉ Radio 1, saying he was leaving it to the radio chiefs at the station.
“I think we’ve said we want to try out some various people in the slot. Oliver [Callan]’s doing a great job, so’s Brendan [Courtney]. That’s a matter of discussion now with Radio 1. But we hadn’t planned for it so we need to see how things work out,” he said.
Mr Bakhurst described the talks with the Minister as “positive, wide-ranging (and) useful”, confirming that they focused, among other things, on the financial future of the station – although he would not be drawn on any level of detail in that regard.
Ms Martin said in a statement later that the Chair of the RTÉ Board also confirmed to her that since April of this year, the barter account is no longer used for purchasing goods or services and that if any further controls are needed on foot of the Mazars report, they will be put in place.
It was also confirmed that progress is being made in developing a new register of interests, and a commitment was given to timely and transparent engagement with all ongoing enquiries and examinations including those by Oireachtas committees.
Ms Ní Raghallaigh, in a statement after the report’s publication, said “regrettably, it is further evidence of the deficiencies in the financial controls and procurement processes in place at RTÉ in the period under examination.
“The process of reform is well underway, and we will continue to work closely with the Director General Kevin Bakhurst and his interim leadership team to restore public confidence in the organisation.”
Taxation funding
Asked about the recommendation that RTÉ be funded from general taxation, made last year by the Future of the Media Commission, Mr Bakhurst said it was a “really interesting thing to be explored”.
“I was discussing this with one of the Nordic director generals, only yesterday, about how it works there, and I think there’s some very interesting examples we could look at in this country. It is working very well in Sweden, for example.”
He said work was continuing on creating a register of interests for RTÉ staff and presenters, and said he was a “bit surprised” to see reports that the presenter of a show had been advertising cosmetic treatments on social media.
“I don’t want to start picking on individuals. I was a bit surprised to see it, but these are the sort of things that we need to get a framework around and make sure people know what they’re allowed do, and what they’re not allowed to do.”
Talks with presenters on pay, one of the touchstone issues when it comes to reforming the broadcasters, have begun, he confirmed, with the reception varying “depending on which presenter you’re talking to”.
The recent dip in licence fee income, he said, has “highlighted the issue” of funding at the broadcaster. “It is urgent, but the timing’s got to be right and we’ve got to show we’ve made changes to the organisation before that can start”.
Asked whether the Government had been clear enough about the nature of its desired reforms at the broadcaster, he said: “We’ve had detailed discussions about a number of the reforms that we’ve already suggested and ones that Government are interested in
“The really important thing is we have a number of reforms we’ve already said we’re going to introduce and I’m determined that we do that. I want to do it as rapidly as possible.”
He said the last thing to be considered as a cost-cutting measure at RTÉ would be compulsory redundancies, and that it was “absolutely not considering” them as of now.
Earlier, Tánaiste Micheál Martin earlier told RTÉ radio’s News at One that the media minister had put the necessary reviews in place and it was now up to RTÉ and the new director general to “get on with it”.
When asked about recommendations from the Future of Media Commission about funding for RTÉ from general taxation, Mr Martin said he had been consistently of the view that the licence fee should be replaced with “a universal charge based on a household charge, based on devices, in order to provide for public service media in general, not just in terms of broadcasting in RTÉ, but also in the context of print and other media, local and national, whereby we would have a very sustainable revenue base”.
