LAST UPDATE | 25 Aug 2023
A REVIEW INTO RTÉ’s use of barter accounts has found “alarming gaps” in policies and protocols that should have been in place, according to the Minister for Media.
Mazars, a forensic accountant firm, has published an interim report on RTÉ’s use of barter accounts in the wake of the payments scandal that has rocked the broadcaster this summer.
The barter accounts came to public attention after it emerged that RTÉ had used one to pay over €150,000 to presenter Ryan Tubridy.
Then-Chief Financial Officer Richard Collins told a meeting of the Public Accounts Committee that there was only one barter account. However, RTÉ subsequently revealed in July that it had used three barter accounts to fund €1.6 million in spending on client entertainment and corporate hospitality over the past decade.
Key issues revealed in the report are the absence of properly documented policies and procedures for using the barter accounts and an apparent lack of signed contracts between RTÉ and the barter media agencies.
There was no formal list of staff that set limits on who could make purchases through the barter account and no formal list of approvers for purchases.
Mazars states in the report that “we have not seen evidence of any formal approval process, approval thresholds or approval hierarchy in place within RTÉ or specifically within the Commercial Team in respect of these purchases, although we understand that the transactions are coordinated by a member of the Commercial Team”.
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 report also notes that documents such as invoices, receipts and booking forms that relate to purchases through the barter accounts “are not stored by RTÉ in an easily accessible manner, and requires detailed searches of electronic mail boxes (over 1,400 emails relating to the period under review) to identify whether such evidence exists”.
“The nature of the barter arrangements meant that the type of purchasing involved as outside of RTE’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.
Minister for Media Catherine Martin, who met with RTÉ Director General Kevin Bakhurst and Chair Siún Ní Raghallaigh earlier today, said that “the report from the forensic accountants again sets out alarming gaps in internal policies, procedures and controls that existed in RTÉ”.
“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,” she said.
“It is also important to say that the first steps have been made to ensure proper controls are put in place. I am re-assured from my conversation with the Chair and Director General this morning that genuine change is underway.”
Speaking to reporters at a press conference this afternoon, Martin said today’s report “raises questions as to why [the barter account] was being used in this way without the oversight”.
She highlighted that today’s report stated that there was no apparent benefit to RTÉ by using barter accounts.
The Minister said this does point to whether the use of the barter account was an avoidance by RTÉ of using the proper controls and procedures “in order to allow these purchases to happen without oversight”.
Martin also told reporters that she expects the full and final Mazars’ report to cost €300,000.
Yesterday, The Journal revealed that RTÉ spent over €100,000 on the first Grant Thornton report into the pay controversy.
The minister will be providing a copy of today’s interim report to the independent Expert Advisory Committee that is scrutinising governance and culture at RTÉ.
Ní Raghallaigh described the report as “further evidence of the deficiencies in the financial controls and procurement processes in place at RTÉ in the period under examination”.
“I have been in ongoing contact with Minister Martin and the Department since these matters emerged and in the meeting with the Minister today, I again assured her that the Board is working assiduously to ensure that all necessary steps are taken to bring the organisation in line with best practice.”
She said that “several of the issues highlighted to date have already been addressed”.
“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.”
In a four-page document last month that sought to explain its use of the accounts, RTÉ said “the use of barter accounts is commonplace in the advertising industry” and that they were used “solely in the context of its commercial activity of selling advertising airtime”.
“While traditional advertising campaigns are billed and paid for in full in cash, barter campaigns are billed on 50% in cash and 50% in credit, the credit being accumulated over time,” RTÉ said, enabling it to “trade its advertising space in return for goods and services produced by other companies with the media bartering company providing the marketplace for these trades, at a discounted rate”.
The three barter accounts used by RTÉ were Astus, Active, and Miroma.
Between 2012 and 2022, RTÉ said it spent an average of around €150,000 per year on client hospitality and entertainment through barter accounts, amounting to around €1.6 million over the decade.
In 2019, RTÉ spent €110,000 on client travel and accommodation to the Rugby World Cup in Japan.
Another of the expenses that was revealed through the scrutiny over the barter accounts was €5,000 on 200 pairs of flip flops for a summer party for corporate clients in 2016.
€21,000 was spent on an agency and client summer party at Teelings Distillery in Dublin.
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