RTÉ has labelled the €3.6 million it had to write off on a stalled finance-and-HR software overhaul “very much an exception” to its normal project record.
In a statement issued on Wednesday night — details of which were first highlighted by news site The Currency — the broadcaster said the upgrade was paid for with proceeds from its 2017 Montrose land sale and was intended to replace five legacy systems dating back as far as 2001.
In that 2017 sale, roughly nine acres of land at the broadcaster’s Donnybrook campus sold for €107.5m.
Describing the rationale for the investment, RTÉ noted that the winning tender in 2018 offered the lowest cost and was judged “the most economically advantageous to RTÉ.”
“This 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,” it said.
The broadcaster continued to refer to “…one of them having been installed in 2001, another two installed in 2003.”
Problems emerged almost immediately after work began.
“Issues arose almost immediately, and the project was, by January 2019, already behind schedule,” it said.
“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.”
RTÉ added that the disruption of Covid-19 in 2020 compounded the delays. One of the two suppliers was later dropped under a confidential settlement, and the remaining contractor restarted the job in August 2022. The finance module finally went live in March 2023, but the HR element was abandoned altogether.
Most of the charge related to that cancelled HR work.
“The majority of the impairment relates to the effort to deliver the HR part of the project, amounting to €2.3m,” it said.
“The remaining €1.3m related to the delay and effort in delivering the finance element of the project.”
The stalled overhaul was one of 39 capital schemes over €500,000 undertaken since January 2020. RTÉ told Arts and Media Minister Patrick O’Donovan that, across all of those projects, total overspend was less than €500,000.
Calling the failure an outlier, the broadcaster commissioned Ernst & Young in early 2023 to review what went wrong. The findings were presented to the board’s audit and risk committee on 20 April 2023 and discussed by the full board a week later.
A departmental spokesperson said the Minister met Director General Kevin Bakhurst on April 8th to examine “the background to the project and the reasons for the failure to deliver on the original scope of the project.” Further written details have been sought.
RTÉ said governance reforms introduced over the past 18 months are intended to prevent a repeat of such incidents, saying: “The corporate governance reforms introduced by RTÉ over the past 18 months are designed to mitigate against the risk of recurrence of such issues.”
A separate expert report for former media minister Catherine Martin has urged the organisation to prioritise investment in a fresh HR information system.
The write-down comes as the broadcaster seeks to cut around 400 posts through a voluntary redundancy scheme announced last week, part of its wider “New Direction” cost-saving strategy.