The results of the Mazars report, ordered by the Government to examine issues within RTÉ, highlight that a number of key transactions lacked a valid justification. This included the transfer of €150,000 made out to Ryan Tubridy and the €44,000 allocated for Renault events under a “tripartite deal” involving RTÉ, Tubridy, and the car manufacturer.
Part of a trio of reports aimed at investigating a range of controversies afflicting the nation’s broadcaster, it further raises the concern of RTÉ misplacing financial records corresponding to three years’ worth of barter account expenditure during relocation of their office. These records, as stated in a report that Mazars released on Tuesday, were maintained in hard format.
It highlights a significant gap in RTÉ’s record-keeping which impeded Mazars’ ability to thoroughly inspect the business rationale for all barter transactions. A series of governance and monitoring failures relating to the barter account management were noted in the report, with lack of a formal approval process for barter purchases, most of which were agreed upon verbally. The Commercial Director held the authority for approving purchases and overseeing their regulation.
The report pinpoints several transactions whose approval basis was “unclear”, including €480 for a private driver; €5,375 membership fees for the Soho House club in London; €73,000 for dealings pertaining to the Rugby World Cup in Japan and another €20,000 for tickets for the same event; €19,000 for the Champions League grand finale in Madrid and it also discusses €4,603 connected to a football match of the Ireland team in Gibraltar.
Regarding the payments instituted in Tubridy’s name, Mazars determined that it was incorrect to label them as “consulting fees”. Further, the report reveals multiple email communications suggesting that RTÉ’s Commercial Financial Controller raised doubts about the classifications of these invoices, the associated consulting, and to whom they pertain. However, no written response to these inquiries was found.
The auditing firm, Mazars, discovered that the barter account was primarily used by the commercial division for travel, lodging, and customer hospitality expenses. However, the account was not adequately managed and lacked proper financial controls. The purchasing transactions system supporting the barter account was inadequately designed.
The firm explained that the record-keeping for the account was not adequately carried out, resulting in significant documentation gaps related to barter purchases. This system’s oversight and reconciliation were ineffective as a result.
Mazars concluded that Irish broadcasting station RTÉ inappropriately excluded barter transactions from its financial reports. This included purchases amounting to €418,000 primarily for 2017 and 2018, and trade credit balances ranging between €243,000 and €572,000 not recorded on the balance sheet for 2017 to 2021. Furthermore, in its annual report to the Minister, RTÉ wrongly left out specific barter purchases leading to a €654,000 discrepancy, mainly due to initial non-accounting for barter transactions and later misclassification of these purchases.
The auditor also noted that RTÉ’s purchase records had several gaps, leading to dependence on purchase statements provided by barter media agencies. The documents supporting these purchases were not stored in a manner that made them easily accessible, rendering the overall record-keeping inadequate between 2017 and 2019.
Mazars highlighted that this situation significantly constrained its ability to verify the accuracy, completeness, and validity of the barter transactions for the period under scrutiny. Adding to the confusion was the dual classification of RTÈ as both commercial and non-commercial, leading to conflicting expectations that complicated governance efforts.
In addition, the report considered both internal and external audit functions related to the barter account. It was found that the internal audit did not scrutinse the account’s governance or operation, mainly because the internal audit was unaware of the account’s existence. There was no evidence of this account being disclosed in talks with the commercial division’s management team or the board of RTÉ making inquiries about it.
A Governance and Culture assessment has determined that RTÉ’s board’s unfilled positions and the lack of adequate skills were among the main contributors to last year’s chaos at the country’s main broadcaster. The evaluation identified significant shortcomings in RTÉ’s governance and culture and put forth 90 proposals, including a request for more transparent classification of RTÉ as a state-run commercial or non-commercial organisation.
The assessment team stated that the ambiguity surrounding RTÉ’s commercial/non-commercial character led to diverging expectations, causing problems for those responsible for overseeing RTÉ. The team held the RTÉ’s public broadcasting as a crucial component of Irish society, despite its funding model being stagnant since 2008.
The international surge in streaming platforms and social media has revolutionised the media landscape, putting financial strain on the national broadcaster. As said by the team, the lack of secure and regular funding led to intense financial issues, forcing RTÉ into cost-cutting measures. Consequently, this may have influenced the decision to obscure remuneration for a RTÉ Presenter, Ryan Tubridy, through a barter agency account.
As a result, the Governance and Culture report advocated for a more sustainable RTÉ funding model to improve its governance. The government is currently contemplating this issue.
Interview requests were denied from the previous Director General, Dee Forbes and the former CFO, Breda O’Keeffe, both of whom were involved in last year’s scandal. The review identified that the subtle barter accounts system was managed outside routine controls and off the balance sheet. Despite the board and the Internal Audit Department’s denial of the barter accounts’ existence, they were referenced in previous media reports, making the review team believe that its existence was evident. The assessment team included Prof Niamh Brennan as chair, alongside Dr Margaret Cullen and Stephen Smith.