5 key questions over RTÉ's €3.6 million IT write-down
On Wednesday night, news broke that propelled RTÉ back into the headlines.
For an organisation familiar with being in front of the screens, in an unusual twist, this time the focus was on behind-the-actual-screens, when RTÉ confirmed that it had written down just over €3.5 million on a partly abandoned it system in recent years.
After another turbulent few days in the relationship between RTÉ, the minister and the public, RTÉ's Arts and Media correspondent Evelyn O'Rourke look at five stand out questions.
1) How did this story only make it to the headlines this week?
Last month, the Department of Media had requested all agencies under its remit to provide details of capital projects which cost more than €500,000 and were either abandoned or materially failed to deliver.
The online news publisher, The Currency subsequently requested copies, under Freedom of Information, of the surveys sent back to the department.
Part of the documentation provided to them included emails that RTÉ's chief financial officer, Mari Hurley, had sent on 10 March this year which provided details of 39 capital projects completed or being implemented since January 2000, with a total spend of close to €57 million.
However, there was one project that stood out.
RTÉ's details confirmed that as part of a project to upgrade its legacy finance and HR system, ultimately the project did not deliver the HR modules and a new headline was born, the million euro partly failed IT system.
This information was relayed to the minister in March in those emails from RTÉ and when the Currency published the information on Wednesday, the story quickly became headline news.
2) Did RTÉ Director General Kevin Bakhurst only find out about the write-downs in March?
On Friday morning it was confirmed by RTÉ that Mr Bakhurst was not aware of the IT write-downs until recently.
The Daily Mail had splashed on its front page that "RTÉ chief kept in the dark on €3.6 million write down".
In a statement, RTÉ confirmed that Mr Bakhurst "became aware of the details of the impairments, in respect of this project when RTÉ was responding to the Minister's recent request for information".
This meant that he only found out about the issues in March when the Minister's survey was rolled out. But were the details being hidden?
No, said RTÉ in its statement, confirming that: "Details of impairments related to this project have been included by RTÉ in its published financial statements from 2020 - 2023."
An analysis of the broadcaster's annual reports shows that it wrote down €3.6 million during this period on IT software assets.
The financial accounts for 2020 list an impairment of €1.87 million for software projects in progress, followed by €1.189 million in 2021, €281,000 in 2022 and €204,000 in 2023.
Minutes of RTÉ board meetings in 2022 and early 2023 also show that the project was regularly discussed.
But with all this information available on the project, the question remains - why did RTÉ Director General Kevin Bakhurst only find out about the write downs in March?
3) How did the minister only find out in March?
On Thursday night, more information emerged as RTÉ confirmed that the now contentious write-down was discussed with a State body, NewERA.
NewERA is part of the National Treasury Management Agency, and provides commercial and financial advice to ministers about State bodies, including RTÉ, An Post, daa and ESB.
The broadcaster in a statement on Thursday night said that prior to publication of RTÉ's annual accounts, the department and its advisers (NewERA) "queried" the impairments in June 2022 when they were reviewing RTÉ's 2021 accounts.
The statement said that RTÉ "confirmed the impairments related to the ERP project" and that the queries also noted "impairments relating to the ERP project in RTÉ's 2020 annual accounts".
(The ERP project relates to Enterprise Resource Planning - which was the title given to the project to replace outdated finance and HR systems.)
This clarification raised more questions though, because if one State body, NewERA, knew about the problems, why didn't the Minister and his department know?
Then last night, the Department of Media responded to RTÉ's comments.
A spokesperson confirmed that officials from NewERA had examined RTÉ's annual reports and financial statements, and had sought clarification from RTÉ as to what the impairments related as there was no detail provided in the audited accounts.
The spokesperson said that as the information provided by RTÉ "did not give rise to any concerns", the impairments were not flagged as a "matter of concern" in the NewERA report for the minister.
The spokesperson added that the department only received "detailed information" about the write-downs on foot of the minister's request for information about problematic capital spending projects over €500,000 in March.
Will questions persist on how neither the minister nor the Director General knew the true scale of the problems until a few weeks ago?
4) Will RTÉ's pending report for the minister explain in more detail why the IT project partly failed?
RTÉ has provided some background to the situation detailing how two suppliers were appointed with the cheapest proposal for the project selected, as it was considered that this proposal would be "the most economically advantageous to RTÉ".
However, issues arose "almost immediately", and the project was, by January 2019, already behind schedule.
These issues were largely due to an "apparent breakdown in the relationship" between the suppliers, a "lack of resources provided by those parties", as well as "resource constraints within RTÉ".
In addition, RTÉ said that the build quality of the product in testing "did not meet expectations" and that "timelines were overly ambitious".
As a result of issues arising, the contract was terminated with one of the appointed suppliers which led to a settlement agreement, which is the subject of a confidentiality clause.
RTÉ then confirmed that it engaged with the other supplier to agree on a plan to deliver "the maximum possible value of the contract".
In August 2022, the project restarted. The finance system went live in March 2023, but RTÉ did not ultimately proceed with the HR modules.
A department spokesperson said that the minister met with Kevin Bakhurst on 8 April to discuss "the background to the project and the reasons for the failure to deliver on the original scope of the project".
He has requested a more detailed report and he has made a commitment to publishing it.
Will this pending report clarify the outstanding questions swirling around the project?
5) Where does this leave the relationship between the Minister for Media and RTÉ?
Since Patrick O'Donovan was appointed as minister for media, he has been vocal in his views on RTÉ.
An Irish Times report in February on early talks between the minister and senior figures in RTÉ, described how Mr O'Donovan was "blunt about seeing action", and that his view was that both public and political patience with RTÉ was "thin on the ground".
The minister has referred to the €725 million funding plan for RTÉ as a 'bailout'.
However, on Thursday the Minister joined Rachael English on RTÉ's News at One and he was more conciliatory than many had been expecting.
Both he and the Minister for Finance used the term 'disappointment' about RTÉ's situation.
The minister also showed confidence in Mr Bakhurst's leadership saying that "the write-down pre-dates the current management" adding that: "I don't believe it was intentional, to be honest about it."
While he went on to say that "nonetheless this is a significant impairment, and it needs to be explained, both to me and to the public", it felt like a shift in public tone.
If his choice of language is any kind of weather vane, can RTÉ can take some comfort in the minister's public pronouncements on the situation?
It remains to be seen if RTÉ's report on the matter be the key to consolidating this important relationship.
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