The project, known as the Enterprise Resource Planning (ERP) project, was funded from the proceeds of RTÉ’s land sale in 2017 and was initially approved in September 2016.
It was one of 39 capital projects completed or being implemented by RTÉ since January 2020, which cost in the region of €500,000 or more.
RTÉ said in 2023 it recognised that the project was an “outlier” and commissioned consultants from Ernst & Young to conduct a review. The details of the write-down were revealed by The Currency.
In a statement to the Irish Independent, a RTÉ spokesperson said: “Its purpose was to replace five disparate, 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).
“By way of background, following an extensive public procurement process in 2018, two suppliers were appointed, Lot 3 in the original tender. Furthermore, theirs was the cheapest proposal and it was considered that this proposal would be the most economically advantageous to RTÉ.
“However, 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. This was compounded in 2020 with the outbreak of Covid 19 and the disruption caused by same.
“As a results of issues arising, the contract was terminated with one of the appointed suppliers. This was the subject of a Settlement Agreement which is the subject of a confidentiality clause.
“RTÉ then engaged extensively with the other supplier to agree a plan that would facilitate the supplier delivering the maximum possible value of the contract. Ultimately, in August 2022 the project restarted following a phased approach with an initial finance implementation followed by subsequent phases for HR and other auxiliary functionality.”
RTÉ said the finance system went live in March 2023, but it did not ultimately proceed with the HR modules.
“In accordance with accounting standards RTÉ was required to review and record impairments in respect of this project from 2019 to 2023,” said the spokesperson.
“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. Impairments were noted in RTÉ’s approved Annual Accounts during the years 2020-2023, but more specific details relating to this project have been disclosed to the Minister as part of the review of capital projects.
“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.
“The Ernst & Young report was presented to the RTÉ Board’s Audit and Risk Committee at its meeting on 20th April 2023 and discussed. It was also discussed by the RTÉ Board at its meeting on 27th April 2023.
“Furthermore, the corporate governance reforms introduced by RTÉ over the past 18 months are designed to mitigate against the risk of recurrence of such issues.”
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