Minister Martin publishes reviews arising from the independent examination of RTÉ

Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media, Catherine Martin, has today published two reviews commissioned following the government decision to initiate an independent, root and branch examination of Raidió Teilifís Éireann (RTÉ):

a Review of Governance and Culture prepared by an Expert Advisory Committee chaired by Professor Niamh Brennan; and
a Review of Contractor Fees, Human Resources (HR) and Other Matters prepared by an Expert Advisory Committee chaired by Mr Brendan McGinty

The reviews are comprehensive and far-reaching and between them made 116 recommendations, including to:

assign the Comptroller and Auditor General as auditor of RTÉ
modernise the legislation governing the role of the RTÉ Board
improve and resource the risk and compliance functions within RTÉ
require RTÉ to include a financial or formula cap in any future exit scheme
reform the approach to engaging and paying presenters
improve the functioning of the RTÉ Board and its committees
ensure greater transparency for higher executive pay
improve the accountability of the Director General to the RTÉ Board
strengthen the implementation of gender, equality, diversity and inclusion policies in RTÉ; and
ensure the review of roles and grades and forthcoming review of allowances in RTÉ are effective, transparent and include consultation with employees

The Review of Governance and Culture includes 90 recommendations to reform RTÉ’s corporate governance framework, its organisational culture and its way of doing business. Welcoming the publication of the Review, Chair of the Expert Advisory Committee on Governance and Culture, Professor Niamh Brennan, said:

“Given its important role in Irish society and as a State body, it is vital that RTÉ has an effective system of governance. Our Review has identified areas of RTÉ’s governance that require improvement. We have made a comprehensive series of recommendations to reform RTÉ’s governance and to minimise the possibility of a recurrence of the issues that have arisen.”

The Review of Contractor Fees, HR and Other Matters made 26 detailed recommendations to improve the oversight and mechanisms by which RTÉ engages contractors and presenters, the use of short-term employment contracts and employment terms and conditions in RTÉ. Commenting on the impact of the Review, Chair of the Expert Advisory Committee on Contractor Fees, HR and Other Matters, Brendan McGinty, said:

“While many strategic and operational challenges are still to be confronted by RTÉ, our recommendations will enable the essential conditions for more inclusive engagement, transparency and accountability across RTÉ. It is our express intention that if the recommendations are accepted and implemented, and as RTÉ builds a sustainable future with the support and trust of staff, the high standards of governance, leadership, and management practice that are expected of RTÉ can be fully observed and help to restore those standards and public trust.”

Today, the government decided to accept in principle all 116 recommendations made by the Expert Advisory Committees. RTÉ will be required to prepare an implementation plan within six weeks setting out the actions, and associated timelines, that RTÉ will take to implement the recommendations made by the Expert Advisory Committees. RTÉ’s implementation plan will be overseen by a Monitoring Group, composed of the Minister’s department and senior representatives and NewERA.

Speaking following the government meeting earlier today, Minister Martin said:

“I have today published two landmark reviews into RTÉ. These reports are significant, as they are the first reports, since the crisis emerged in RTÉ, which contain recommendations. The 116 recommendations made by the Expert Advisory Committees are a blueprint for the further reform of RTÉ. If implemented in full, they will improve the governance of RTÉ, both internally and externally, ensure the culture of RTÉ better reflects the values of public service held by its staff, and improve both the industrial relations landscape and human resources processes and procedures. The recommendations point the way to a more inclusive, transparent and accountable RTÉ, one that truly has the character of a public service.

"I would like to thank the members of the Expert Advisory Committees for giving so much of their time and expertise to produce these reviews.

"I will begin work immediately to implement those recommendations which require action by my department. As part of this, I intend to prepare and bring detailed proposals to Government to reform the legislation governing RTÉ, including to assign the Comptroller and Auditor General as auditor of RTÉ.”

Minister Martin has also published the final report of the forensic accountant, Mazars, appointed to examine the barter account and identify any other off-balance sheet accounts in RTÉ under section 109(7) of the Broadcasting Act 2009. The report:

confirms that the barter account and contra transactions are now recorded correctly in RTÉ’s financial statements
formally identifies a number of barter transactions which had no valid basis; and
finds that hospitality and travel and subsistence expenditure made through the barter account was under-reported to Ministers by RTÉ over the period 2017 - 2022

On foot of the report, Minister Martin will write to the Chair of the RTÉ Board seeking detailed clarification and assurances regarding the governance and operation of the RTÉ barter account and RTÉ’s contra transactions and the reporting of travel and subsistence and hospitality expenditure over the period 2017 – 2022 and in the forthcoming (2023) reporting period.

Read the reports.

Notes

Background

On 4 July 2023, following the agreement of Government, the Minister for Tourism, Culture, Arts, Gaeltacht, Sport, and Media, Catherine Martin, announced the commissioning of an independent, root and branch examination of RTÉ, composed of two separate and parallel reviews to be undertaken by Expert Advisory Committees:

a Review of Governance and Culture; and
a Review of Contractor Fees, HR and Other Matters

The Expert Advisory Committees were supported in their work by consultants, Crowe Advisory Ireland, by their legal advisors, McCann Fitzgerald, and by a Secretariat of officials from the Department of Tourism, Culture, Arts, Gaeltacht, Sport, and Media.

Following a procurement competition, on 12 July 2023, the Minister exercised her powers under section 109(7) of the Broadcasting Act 2009 and appointed forensic accountants, Mazars, to undertake an examination of the RTÉ barter account and to identify any other off-balance sheet accounts held by RTÉ.

On 25 August 2023, the Minister published an interim report furnished by Mazars on the barter account.

Membership of the Expert Advisory Committees

The members of the Expert Advisory Committees on Governance and Culture were:

Professor Niamh Brennan (Chair)
Dr Margaret Cullen
Stephen Smith

The members of the Expert Advisory Committee on Contractor Fees, HR and Other Matters were:

Brendan McGinty
Patricia King
Liam Kelly

Biographical information on the members.

Review of Governance and Culture

The Expert Advisory Committee on Governance and Culture were required to examine whether RTÉ’s corporate governance framework complied with the Code of Practice for the Governance State Bodies and relevant legislation, and included a robust system of internal governance. It was also required to assess RTÉ’s cultural characteristics and ways of doing business, and make recommendations on all of the above matters.

The full terms of reference for the Review of Governance and Culture are available.

The Expert Advisory Committee on Governance and Culture have made 90 recommendations:

to address the external governance architecture which applies to RTÉ (Recommendations 2.1 – 2.4)
to improve the accountability of RTÉ executives, particularly the Director General, to the Board of RTÉ (Recommendations 4.1 – 4.6)
to strengthen the roles, duties and organisation of the RTÉ Board, which includes clarifying and improving the capacity of the Board to exercise its duties and responsibilities, improving the operation of Board committees, and ensuring the Board has the appropriate skillsets (Recommendations 5.1 – 5.33)
to improve RTÉ’s system of internal governance with a particular focus on risk, compliance and internal audit, and in particular to assign the Comptroller and Auditor General as auditor of RTÉ and ensure that RTÉ can demonstrate compliance with relevant legislation and the Code of Practice for the Governance of State Bodies (Recommendations 6.1 – 6.41); and
to ensure that RTÉ’s culture reflects its values, including by creating a culture of accountability and introducing a cultural framework (Recommendations 7.1 – 7.6)

Review of Contractor Fees, HR and Other Matters

The Expert Advisory Committee on Contractor Fees, HR and Other Matters were required to review the oversight and mechanisms by which RTÉ engages contractors and presenters, the use of short-term employment contracts and employment terms and conditions in RTÉ and make recommendations on these matters.

The full terms of reference of the Review of Contractor Fees, HR and Other Matters are available.

The Expert Advisory Committee on Contractor Fees, HR and Other Matters have made 26 recommendations to:

further reform the process of remunerating and appointing presenters and address the role of agents (Recommendations 5 – 10)
ensure further Severance Schemes and staff exits are fair and equitable (Recommendation 2)
clarify the RTÉ salary cap and improving transparency on higher pay (Recommendations 16 and 17)
address the role contractors, employees on short-term contracts and classification of workers/contractors as employees/self-employed (Recommendations 5 and 12)
renew industrial relations in RTÉ to improve the quality of working relationships (Recommendations 3 and 4)
ensure the ongoing review of roles and grades (Recommendation 15) and forthcoming review of allowances (Recommendation 18) are effective, transparent and include consultation with employees
encourage new HR practices to improve learning and development, gender, equality, diversity and inclusion (GDEI), employee voice, management accountability and the role of the HR function (Recommendations 7, 13, 14, 19, 20, 21, 22, 23, 25, & 26)
ensure employment standards in commissioned productions (Recommendation 11)
address the legacy of organisational silos (Recommendation 24)

Examination of the RTÉ barter account and identification of any other off-balance sheet accounts

The terms of reference of the examination of the barter account carried out by Mazars required:

the identification of all off-balance sheet accounts held by RTÉ during the period 2017 – 2022
the examination of all transactions made through the barter account and any other off-balance sheet accounts
identification of whether the transactions were correctly recorded in RTÉ’s financial statements
a review of decision-making process around the establishment of the barter account in 2012; and
a review of whether the internal audit function and external auditors queried matter relating to the barter account

Terms of reference of the examination.

The main findings of the examination are that:

there was inadequate governance of the barter account, including no properly documented policy and procedures, inadequate record keeping, inadequate controls and an informal approval process
the barter account was not fully brought on-balance sheet until 2022, with purchases made through the RTÉ barter account recorded in the RTÉ financial statements from 2019, and unused trade credits in respect of the barter account were recorded in the RTÉ financial statements from 2022
RTÉ, in common with other media organisations, engages in contra transactions, and that these are not off-balance sheet accounts
during the period 2017 – 2022, RTÉ did not have a formal contra policy and there was inadequate record keeping regarding certain categories of contra transactions between 2017 – 2019
following the examination of €1.21 million in barter purchases, and accompanying documentation, for the period 2017 – 2022:

- Mazars concluded that there was no personal benefit from barter purchases to RTÉ staff

- Mazars identified a number of transactions with no valid basis or where the basis of the approval and commercial benefit was not clear

the majority of barter purchases were not reported under the headings of hospitality and travel and subsistence expenditure through the annual Chairperson’s Comprehensive Report to the Minister for the period 2017 – 2022, which is a requirement of the Code of Practice for the Governance of State Bodies
in respect of the establishment of the barter account in 2012, Mazars could find no record of approval at Executive Board or Board level or record of the design or documentation of an appropriate governance structure, adequate system of internal control or operational processes
the existence of the barter account does not appear to have been disclosed to the RTÉ internal audit function
the approach followed by the external auditor in relation to the barter account was appropriate in the context of accounting standards and the auditors’ reporting on the financial statements of RTÉ for the period under review