RTÉ settled a new deal with auditors Deloitte despite the firm having found there were no “control deficiencies” in the national broadcaster before it was rocked by controversy last year.
The two-year agreement was reached in October as RTÉ battled a crisis of public and political confidence set off by hidden payments to former star presenter Ryan Tubridy. The money was not reported in RTÉ statements on the pay of its 10 most highly-paid broadcasters.
The affair exposed a litany of lax RTÉ governance, prompting a collapse in TV licence sales and then a multi-million-euro Government bailout to avert threatened insolvency. The broadcaster is still struggling to overcome the debacle, with yet more Oireachtas committee hearings looming this month.
Deloitte’s annual inspection of RTÉ's books includes an evaluation of internal controls under the code of practice for governance of State bodies. Now internal files show how the auditor expressed no concern about RTÉ controls when meeting a key committee of its board three months before the scandal broke last year. “No significant control deficiencies have been noted,” said RTÉ's minute of Deloitte’s presentation of the 2022 audit to the audit and risk committee (ARC) on March 21st.
RTÉ revealed the Tubridy payments on June 22nd, prompting events that led to his departure from the station and multiple investigations into weak governance. The payments surfaced during Deloitte’s 2022 audit, leading to inquiries by accountants Grant Thornton which criticised transfers via the station’s “barter” account.
Still, RTÉ's minute of Deloitte’s March presentation said there were “no material changes to the risk assessment and no changes to significant risks”.
In an apparent reference to Tubridy payments, the minute said Deloitte cited “two invoices which related to barter which need to be confirmed by management”.
The documents were released after a Freedom of Information request for RTÉ files on dealings with Deloitte. RTÉ paid the firm €215,000 in 2022 and €190,000 in 2021.
Before RTÉ's October agreement with Deloitte, a September ARC minute noted a “fairly substantial increase” in fees was proposed. Siún Ní Raghallaigh, RTÉ board chairwoman, noted “the fees are too high”.
Still, a person whose name was redacted said “the risk profile had changed and more senior people would need to be involved”.
RTÉ declined to say whether it raised or cut Deloitte’s fee in the subsequent agreement for 2024 and 2025. In an internal email, however, board member Susan Ahern praised a “good result”.
Replying to questions, Deloitte said audit quality was its top priority. “We are confident in our work undertaken for RTÉ.”
The firm said: “It is a matter of record that Deloitte raised questions with RTÉ management in early March 2023 in connection with certain invoicing arrangements. Arising from its concerns Deloitte then escalated and referred the matter to the audit and risk committee of the RTÉ board.”
It added: “A Deloitte presentation to the ARC in late March 2023 occurred at a time when the audit was ongoing and incomplete, most notably in respect of outstanding concerns regarding invoicing arrangements. Deloitte did not issue an audit opinion on the 2022 financial statements until outstanding concerns were addressed, on completion of an investigation into the matter in June 2023.”
The RTÉ records make it clear that ARC members were unhappy that Deloitte assurance reports on the pay of its top 10 presenters were not sent to the RTÉ board or the committee.
However, a September 20th minute shows ARC chairwoman Anne O’Leary recommending Deloitte’s reappointment “given the practical difficulties in tendering for new auditors”.
Ms Ní Raghallaigh said “the reality of the situation” needed to be explained to the board: “Going out to tender would mean a delay in annual report at a time when RTÉ needs to provide it in a timely manner.”
Although the ARC resolved to carve-out the top 10 report from Deloitte responsibilities, the decision was abruptly reversed in November. The reasons for the change remain unclear. There was no RTÉ comment.
The 2023 top 10 report last week followed Deloitte oversight. “An assurance report from Deloitte was part of the documentation prepared for the remuneration committee of the board,” RTÉ said.
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