The Taoiseach has said that proper accounting procedures and proper corporate governance procedures were not followed in the RTÉ production Toy Show The Musical.
The investigation into the musical, which amassed losses of €2.2m, has found that the recording of the show's sponsorship money was "not in line with generally accepted accounting practices".
It also identifies that there was no formal consideration of the project by the board until after a contract was signed with the venue, The Convention Centre in Dublin, for the musical.
Leo Varadkar said the RTÉ executive team failed in their duties to inform the company board of this major venture.
"I think quite frankly, the board could have asked more questions to be more inquisitive about what happened," he said.
Mr Varadkar said Minister for Media Catherine Martin will read the Grant Thornton report, reflect on it and then decide what should happen next.
He added that if the RTÉ Board members who were in situ at the time of the musical cease to be board members "then they can't be held to account in the same way".
However, Mr Varadkar declined to express confidence in the board members and the executive team that were in place when the musical came to fruition saying only that the next steps fall to Minister Martin and the recommendations she brings to the Government.
Sinn Féin finance spokesperson Pearse Doherty described the Grant Thornton investigation as "yet another shocking report" and "shows a clear failure of corporate governance at the very top of RTÉ".
Pearse Doherty said this should not be the way that public money is spent and this report further damages public confidence in the national broadcaster.
Deputy Doherty added: "There are serious questions now in relation to existing Board members at the time - what they questioned, why did they rubber-stamp this when notified of it and I would expect that the Public Accounts Committee will be inviting those members and others before the Committee to answer those questions shortly."
'Disaster before it even started'
Chair of the Public Accounts Committee Brian Stanley has said that RTÉ's Toy Show the Musical "was a disaster before it even started", and has said the committee may ask executives to appear before it following the publication of a Grant Thornton report into the show.
Speaking on RTÉ's Morning Ireland, Mr Stanley said it underlines the "failure of corporate governance at RTÉ and the huge lack of accountability."
Mr Stanley said the Public Accounts Committee may decide to call members of RTÉ's Executive Board and the appointed board before the committee again.
"I think given the calamity that this is and the fact we have another report coming in relation to goodbye money, for people who are voluntarily leaving RTÉ, I wouldn't rule out having some members of the Executive Board of RTÉ before the committee or indeed members of the appointed board ... and Siun Ni Raghallaigh."
The Sinn Féin TD said he has not seen the report, but it "crystallises" what type of regime operated at the top of the public service broadcaster over a number of years.
"It is clear that the Executive team that was there was completely failing in its duties," he said.
He added: "It is clear that there was a lack of accountability to the appointed board which is now headed by Siún Ní Raghallaigh, it is clear the flow of information wasn't there, there were no proper reporting structures.
"As I said seven months ago, we are not talking about some backstreet operation. We are talking about the national broadcaster that has had a commercial arm to it right from the word go".
Mr Stanley criticised the fact there was no obligation to get board approval before they went ahead and booked venues and got the project up and running.
He questioned what market research was carried out as he said, from what has emerged so far, it seems in "a best-case scenario it may break even and may not even if it had to have full attendance across all shows."
He said the appointed board of RTÉ and the former executives "could have been on two different planets from what we are seeing", adding that the PAC had hoped to have all of the reports on RTÉ by November
He said regardless of this, they have had to move ahead and put together as much of their report.
Fianna Fáil TD Niamh Smyth, who chairs the Committee on Media, said the report was alarming, but not surprising.
She told RTÉ's Drivetime: "It kind of further points to that lack of oversight, lack of governance, lack of control and a real complacency really with the executive in what information they should be sharing and looking for the approval from for the board, but I have to say I'm not surprised.
"Considering there are more reports to come out, the barter account report has to come out yet too which is going to I suppose demonstrate to us whether this was a regular occurrence, or not."
She said the absence of "key people" such as former RTÉ director general Dee Forbes at Oireachtas committee hearings was "really unhelpful".
She added: "We have a standing open invitation to Dee Forbes to come before the committee whenever and as soon as she is available to do that because the absence of key people throughout all of this really does not help to put these issues to bed quickly.
"And that is what we need to do for the sake of RTÉ, for the sake of the entity of RTÉ and this is against a backdrop where the Government are being asked to consider future funding of the media."
'Serious deficiencies'
In a statement following the report's publication this afternoon, the Chair of the RTÉ Board Siún Ní Raghallaigh said the board acknowledged "the serious deficiencies" highlighted in the report.
"The report clearly illustrates that the board was not kept appropriately informed about the project as it was being developed. External expert advice was ignored. Information was also withheld from the board.
"Significant contracts were committed to without the knowledge or approval of the full board," she said.
She added: "Since this series of events, the relationship between the board and the executive has been redefined and governance structures have been reformed and strengthened.
"As Chair of the RTÉ Board I would like to apologise to the public and to the staff of RTÉ.
"The board is focused on driving the change necessary to fully restore confidence in the organisation, and to working with Government to establish a sustainable funding model that will ensure that RTÉ can continue to deliver on its important public service media remit."
Ms Smyth said earlier that it may be the case that any current board members, who were in situ at the time, may be requested to answer questions.
One committee member, Fine Gael's Brendan Griffin, told his parliamentary party last night that both RTÉ Director General Kevin Bakhurst and Chair of the RTÉ Board Siún Ní Raghallaigh should be "hauled" back in as relevant information about the crisis at the broadcaster was outstanding.
Taoiseach Leo Varadkar is understood to have told the same meeting that sacking the board might be the "easy" option but it is not a good option as members, once gone, are unaccountable.
'Failure of governance at board level'
Fine Gael TD Brendan Griffin has said the latest report into RTE is "...very very disappointing and shows just how poor the Board was performing in its duties".
He said the Grant Thornton investigation had highlighted "a failure of governance at board level; a failure at management level; the appropriate questions weren't asked; and checks weren't put in place".
Deputy Griffin, who is a member of the Oireachtas Media Committee, said the "first thing" that needs to happen next is that both the Board members and RTÉ executives need to return to Leinster House to answer questions while they are all in situ.
He said: "We haven't got the type of detail that many people would have liked in this report, in terms of 'who' and 'why' on a lot of the decisions. I think those questions need to be asked and answered at Committee."
The Kerry TD described RTÉ as "extremely slow" in responding Committee requests for information and answering "basic questions".
Read more:
'Significant concern' expressed over Toy Show The Musical accounting
Questions for RTÉ Board members
Social Democrats deputy Catherine Murphy, who is also vice chair of the Public Accounts Committee, said RTÉ Board members who were in situ at the time of Toy Show the Musical have got to ask themselves question about the failures.
She said: "If this is the way governance was within RTÉ, and the board had the oversight responsibility there, they have to ask themselves the questions about whether or not they are the right people to be there."
She added: "On a board you should there inquiring... you should be asking... you should be making sure things are robust - that's your job. You are not there to say: oh, this is a great idea. You have got to make sure it's robust, there is a good business case and that it's not going to end-up losing a lot of money - which this did."
RTÉ News has contacted a representative for Dee Forbes requesting comment.
Efforts have also been made to contact the former Chair of the RTÉ Board Moya Doherty and various RTÉ Board members, both former and current.
