RTÉ report shows 'alarming gaps' in spending controls

Media Minister Catherine Martin said the report into the so-called slush fund has identified 'alarming gaps' in internal policies, procedures, and controls.

An interim report into RTÉ’s use of a barter account raises questions about whether it was used to hide certain payments from which people benefited, Media Minister Catherine Martin has said.

Ms Martin said the report into the so-called slush fund has identified "alarming gaps" in internal policies, procedures, and controls.

The controversial barter account was used to pay hundreds of thousands of euro on hospitality and entertainment including flights to sporting events, match and concert tickets, hotel stays and lavish dinners in top restaurants. It was also revealed that €4,956 was spent on flip flops and more than €2,000 on balloons. The barter account was also used to pay out two €75,000 top-ups to Ryan Tubridy after RTÉ facilitated and underwrote a commercial agreement between the presenter and Renault.

Accountants Mazars have revealed that of the €7.4m in advertising revenue generated through the barter account, €1.2m was spent on goods and services which were "outside of RTÉ's standard purchasing and procurement processes", and so internal controls and approvals processes were not followed. 

The forensic analysis outlines that there were no rules in place for paying for items using the barter account. There was also no threshold on the value of purchases and the contracts in place for the barter account were “unsigned”. Mazars also found access to barter account purchases did not appear to have been limited to an approved list of RTÉ staff.

The report also 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”. Barter account purchases at RTÉ "do not appear to be subject to the formal purchase approval requirements applicable to general purchases", the auditors found.

RTÉ provided Mazars with a Code of Business Conduct “which contains guidelines to staff in respect of gifts and entertainment”, but the code “does not set specific thresholds or approvals required that could be applied to barter media agency related purchases”.

“The nature of the barter arrangements meant that the type of purchasing involved was outside of RTÉ's standard purchasing and procurement processes and as a result the associated internal controls and approvals processes for purchasing and procurement were not followed,” the report says.

Barter purchases also appear not to have been tracked as part of monthly budgetary reporting. Auditors were unable to identify any benefit to RTÉ in using barter media agencies to make purchases, rather than simply cashing in the available trade credit balance.

Report raises questions

Minister Martin said the report “definitely” raises questions about whether the barter account was being used by those "who were involved" to hide certain payments and to avoid proper oversight.

She said the problem is there is not a precise list of staff who had access. When asked if the interim report raises questions about possible fraud, Ms Martin said that would be a matter for Revenue.

She said the cost of the Mazars' report could reach €300,000 and the final report is expected in October.

She said Director General of RTÉ Kevin Bakhurst hopes to have a register of interest for staff ready in two weeks with sanctions for anyone who does not adhere to the rules.

Following a meeting between Ms Martin and RTÉ Board Chair Siún Ni Raghallaigh, Mr Bakhurst said he is not considering compulsory redundancies at the broadcaster at this moment as a cost-cutting measure. However, he said “we may have to at some point.”

He also said he no longer wants to talk about Ryan Tubridy, and has not spoken to him since he made the decision that the former Late Late host would not be returning to the airwaves.

When asked about cost-cutting measures at RTÉ, Ms Martin said Mr Bakhurst is looking at presenters’ salaries. She said she expected him to come forward with a strategic vision in the next few weeks to cut costs further at the national broadcaster.

Ms Martin said she anticipated having a figure in two weeks on what interim funding may be required to help RTÉ as TV license fee sales have plummeted since the payments scandal broke.

In an extraordinary press conference, Ms Martin defended criticism she has faced for her “lack of visibility” in recent weeks and said she didn’t want to discuss her personal life, but she has spent time with her children adding “it's not incompatible, by the way to have time with your family and to work as well.”

She also revealed that she was dealing with a family bereavement with a close relative passing away earlier this week.