RTÉ has confirmed it has written down a figure of €3.6 million on a partly failed IT system, which was one of the projects funded from the proceeds of the sale of land at its Dublin site in 2017.
In a statement, the broadcaster said the “purpose of 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 details of the write-down were first published by The Currency.
It reported that in the wake of the Department of Arts and Media requesting that all agencies under its remit provide details of capital projects which cost more than €500,000, and were either abandoned or materially failed to deliver, it had requested copies, and applied under Freedom of Information, for details of surveys.
While the department had refused to provide these records to The Currency, released emails show that RTÉ’s Chief Financial Officer Mari Hurley had sent a report to the department on 10 March.
The broadcaster confirmed the capital project was one of 39 completed or being implemented since January 2020 which cost in the region of €500,000 or more.
The statement explains the background to the spend on the IT system, outlining that following an extensive public procurement process in 2018, two suppliers were appointed to the project.
It added that it chose the tender which was the cheapest proposal, and “it was considered that this proposal would be the most economically advantageous to RTÉ”.
The statement said 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,” it said.
“This was compounded in 2020 with the outbreak of Covid-19 and the disruption caused by same.”
Contract was terminated with supplier
As a results of issues arising, the contract was terminated with one of the appointed suppliers, with RTÉ confirming that “this was the subject of a Settlement Agreement which is the subject of a confidentiality clause”.
In August 2022, the project restarted following a phased approach and the finance system went live in March 2023.
“RTÉ did not ultimately proceed with the HR modules,” the broadcaster confirmed.
The statement also outlined the financial details involved in the project and how “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 said.
RTÉ said the impairments were noted in its approved annual accounts from 2020 to 2023, but more specific details relating to this project have been disclosed to the minister as part of the review of capital projects.
An analysis by The Currency of the broadcaster’s annual reports showed that it wrote down €3.6m during this period on IT software assets and also stated that then chief financial officer Richard Collins, for example, informed the board at its 22 September 2022 meeting that the project had been “restructured and de-risked”, minutes showed.
The statement outlined that “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 minimize the risk of recurrence,” it said.
“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.”
A department spokesperson said the minister met the broadcaster’s Director General 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”.
“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,” the spokesperson said, and the minister is awaiting further written details on the project.
The broadcaster also 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 added that an expert advisory committee’s Review of Contractor Fees, HR and Other Matters in RTÉ, published by former minister for media Catherine Martin, “recommends that RTÉ prioritise the proposed investment in a new HR information system”.
