A report by forensic accountants into RTÉ's use of off-balance-sheet accounts has identified "alarming gaps" in internal policies, procedures and controls, Minister for Media Catherine Martin has said.
The interim report on RTÉ's barter account system found that the national broadcaster does not appear to have "formally approved policy or procedure in place".
Purchases made through barter accounts are common in advertising, auditors Mazars said, and involve specialised agencies who provide the service.
Barter account purchases at RTÉ "do not appear to be subject to the formal purchase approval requirements applicable to general purchases", the auditors found.
Barter purchases also appear not to be tracked as part of monthly budgetary reporting, nor does access to such purchases appear to have been limited to an approved list of RTÉ staff, according to the report.
Furthermore, auditors were unable to identify any benefit to RTÉ in using barter media agencies to make purchases, rather than simply cashing in the available trade credit balance.
Lack of controls
The interim report reveals that, of the €7.4m in advertising revenue generated through the barter account, €1.2m was spent on goods and services which were "outside of RTÉ's standard purchasing and procurement processes", and so internal controls and approvals processes were not followed.
Auditors also found that relevant documentation was not stored by RTÉ in an easily accessible manner, with detailed searches of electronic mailboxes needed "to identify whether such evidence exists".
RTÉ's Code of Business Conduct contains guidelines to staff around gifts and entertainment, but it "does not set specific thresholds or approvals required that could be applied to barter media agency related purchase".
The broadcaster told auditors that the code does not include thresholds as it is "principles-based".
"RTÉ personnel are expected to adhere to the principles of 'honesty and integrity in the conduct of business activities', ‘loyalty to RTÉ’, and ‘confidentiality’", it said.
Hotel stays, gig tickets, flip-flops and balloons
Last month, it emerged that the public service broadcaster had used its barter accounts to pay out hundreds of thousands of euros on hospitality and entertainment.
An Oireachtas committee also heard that a barter account was used to pay presenter Ryan Tubridy €150,000 on top of his salary.
Documents released to the Oireachtas Media Committee contained hundreds of transactions that ran through the accounts over the past decade, including flights to sporting events, match and concert tickets, hotel stays dinners in top restaurants.
It was also revealed that €4,956 was spent on flip-flops and more than €2,000 on balloons.
Last month, Minister Catherine Martin tasked the auditing firm, Mazars, with investigating the account.
Speaking this afternoon, Ms Martin said that she expects the full report to be published in early October.
The interim findings will be passed onto the two external advisory groups, appointed by the Minister in recent weeks, for them to consider.
The minister told reporters that the report raises questions as to whether the barter account was being used to "avoid proper oversight" and "hide certain purchases".
"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.
When asked about the cost of the Mazar's report, she said that it could reach €300,000.
Minister Martin said that she believed the new Director General Kevin Bakhurst has made a "great start" in reforming governance at the troubled broadcaster.
In a statement, Chair of the RTÉ Board Siún Ní Raghallaigh welcomed the publication of the interim report.
But she said that it is "further evidence of the deficiencies in the financial controls and procurement processes in place".
Ms Ní Raghallaigh insisted that "[the] process of reform is well underway" and promised to work "to restore public confidence in the organisation."
Speaking after a meeting with Ms Ní Raghallaigh and Minister Martin, but before publication of the report, Mr Bakhurst said that its findings are "very useful" and that there are a "number of actions to be taken".
He said that the meeting had been "very positive" and "wide-ranging".
Govt committed to public service broadcasting - Martin
Tánaiste Micheál Martin has said the Government is committed to public service broadcasting, but that it will be "anxious" for reforms with regard to financial sustainability into the future.
Speaking on RTÉ's News at One, he said the Government will look at the interim funding situation for the organisation.
Mr Martin said there have been different perspectives on the licence fee over the years, with some preferring reform of it.
He said his own personal view is that the licence fee should be replaced with a universal charge based on devices in order to provide for public service media in general.
The Tánaiste said that this would ensure a sustainable revenue base.
He warned the Exchequer proposal could result in a "danger" of blurring the lines between government and media in terms of independence.
He said editorial independence is "absolutely vital" in a democracy and he has discussed his concerns with commission members.
Report highlights 'catalogue of failures'
The interim report from Mazars has highlighted a "whole catalogue of failures", according to a Sinn Féin TD.
Speaking on RTÉ's Drivetime, Brian Stanley described it as "a damning report" that shows a complete failure of management and complete absence of financial controls and procedures around the barter accounts.
The chairman of the Oireachtas Public Accounts Committee said there was no financial logic to the use of the barter account system.
