RTÉ has acknowledged a write-down of €3.6 million linked to a partially unsuccessful IT project, one of several initiatives funded through the sale of land at its Dublin premises in 2017, reports RTE.
In its statement, the national broadcaster explained that “the purpose of the IT system was to replace five legacy systems that were used for Finance and HR which were at or near end of life (one of them having been installed in 2001, another two installed in 2003).”
The Currency was the first to publish details regarding the write-down, reports RTE.
It reported that after the Department of Arts and Media asked all agencies under its scope to share information on capital projects exceeding €500,000 that were either discontinued or significantly failed, the outlet filed Freedom of Information requests to obtain relevant surveys and documents.
Although the department denied access to the documents, email records show that RTÉ’s Chief Financial Officer Mari Hurley submitted a report to the department on 10 March, reports RTE.
The broadcaster clarified that the IT system project was one of 39 major capital efforts, each costing €500,000 or more, either completed or in progress since January 2020.
The statement offered context on the IT investment, noting that two suppliers were chosen for the project in 2018 after a detailed public procurement process.
It said the broadcaster selected the lowest-cost tender, believing “it was considered that this proposal would be the most economically advantageous to RTÉ”, reports RTE.
However, it added that “issues arose almost immediately, and the project was, by January 2019, already behind schedule”.
“These issues were largely due to a lack of resources provided by those parties to the project, resource constraints within RTÉ, the build quality of the product in testing which did not meet expectations and over-ambitious timelines,” the statement explained, reports RTE.
The situation was further impacted in 2020 by the onset of the Covid-19 pandemic and the disruptions that followed.
Due to ongoing problems, RTÉ ended its contract with one of the suppliers, stating “this was the subject of a Settlement Agreement which is the subject of a confidentiality clause”.
A phased relaunch of the project began in August 2022, and the financial component of the system became operational in March 2023, reports RTE.
“RTÉ did not ultimately proceed with the HR modules,” the broadcaster confirmed, reports RTE.
Financial breakdowns in the statement showed that “the majority of the impairment relates to the effort to deliver the HR part of the project, amounting to €2.3m”.
“The remaining €1.3m related to the delay and effort in delivering the finance element of the project,” it added.
The broadcaster said these impairments were reflected in its audited annual accounts from 2020 through 2023, and more detailed project information had been shared with the minister during the capital project review, reports RTE.
The Currency’s analysis of RTÉ’s annual reports found that €3.6 million had been written down over that time, and noted that then-CFO Richard Collins informed the board on 22 September 2022 that the project had been “restructured and de-risked”, as per meeting minutes.
RTÉ said “this impairment is very much an exception in the context of extensive projects delivered annually by RTÉ”.
“This is evidenced by the fact that in Q1 2023 RTÉ recognised that this project was an ‘outlier’ and commissioned consultants (Ernst & Young) to conduct a review of it so that lessons could be learned to minimise the risk of recurrence,” it said, reports RTE.
“The Ernst & Young report was presented to the RTÉ Board’s Audit and Risk Committee at its meeting on 20 April 2023 and discussed. It was also discussed by the RTÉ Board at its meeting on 27 April 2023,” reports RTE.
A spokesperson for the department confirmed that the minister met with RTÉ’s Director General Kevin Bakhurst on 8 April to examine “the background to the project and the reasons for the failure to deliver on the original scope of the project”.
The spokesperson added, “RTÉ also set out a range of measures that have been put in place in the interim to improve internal control procedures and project delivery,” and that the minister is waiting on further written details, reports RTE.
RTÉ stated that “the corporate governance reforms introduced by RTÉ over the past 18 months are designed to mitigate against the risk of recurrence of such issues”.
It also noted that a Review of Contractor Fees, HR and Other Matters by an expert advisory group, published by former media minister Catherine Martin, “recommends that RTÉ prioritise the proposed investment in a new HR information system”, reports RTE.
The Currency’s article clarified that former RTÉ board member Ian Kehoe had no role in editing the story and did not review it before it was published.
Mr Kehoe, Executive Editor of The Currency, served on RTÉ’s board from October 2018 to October 2023 and was a member of the board’s Audit and Risk Committee, reports RTE.
Tell us your thoughts in the Facebook post and share this with your friends.
