Watchdog: Hidden exit deals are wrong

A 2016 C&AG report says public entities should disclose any payments

THE State’s spending watchdog believes that public entities have an obligation to disclose severance payments - and that disclosure responsibilities should trump any contractual undertakings. The position was outlined in a 2016 special report by the State financial watchdog, the Comptroller and Auditor General (C&AG), on the Management of Severance Payments in Public Sector Bodies,

Deputy Verona Murphy who sits on the Public Accounts Committee (PAC) which has been investigating financial irregularities at RTÉ, including a slew of exit packages, says the unearthing of the report is further proof of mismanagement at the broadcaster.

It comes as the PAC recommended this week that the broadcaster should be brought back under the control of the C&AG.

‘RTÉ’s iron wall of confidentiality’

The move would allow for more scrutiny and oversight of RTÉ by the Public Accounts Committee.

The C&AG doesn’t usually oversee commercial entities. As RTÉ is dual funded, it receives revenue from both licence fees and advertising.

But both the Taoiseach Leo Varadkar and the Tánaiste Micheál Martin have said that the proposal is worth considering.

Mr Varadkar said this week that while the Government hasn’t ‘made a policy decision’ on the State auditor’s involvement, ‘I think it’d be a good idea to have that additional level of scrutiny.’

Crucially, the 2016 C&AG report warns that discretionary severance payments, ‘though occasionally necessary must be based on the principles of accountability, integrity and fairness’.

Elsewhere, the report makes more damning reading for RTÉ and in many cases seems to tick every box that management there got wrong.

It says a State employer should consider its options and have a clear understanding of the risks involved, including both costs and benefits, when terminating employment.

‘A written record of this rationale should be maintained and there should be departmental approval, in line with relevant financial procedure circulars before a binding offer is made,’ it stipulates.

‘Agreements should not contain confidentiality clauses that create a perception that the employee cannot speak out about poor public sector practices, or that prevent the employer from fulfilling its accountability obligations.’

The report, published eight years

ago, warns: ‘Public entities generally have some form of obligation to disclose severance payments, either through governing legislation, accounting standards or government instructions/circulars.’

And amid growing unhappiness over what one PAC member called RTÉ’s ‘iron wall of confidentiality’, it warns: ‘Statutory disclosure requirements of public bodies override any contractual undertaking in severance agreements.

‘While there may be valid reasons for confidentiality clauses being included in agreements, they should not attempt to circumvent a statutory disclosure requirement. Detailed disclosure requirements for severance payments should apply to all public sector entities.’

The comprehensive report notes that ‘in the absence of such controls, there is a risk that State funds may be used inappropriately, or that agreements are put in place

that may incentivise employees not to raise issues of public interest.’

Commenting on the report, Ms Murphy said there can be ‘no doubt that RTÉ and the department are in serial breach of the C&AG’s closely researched conclusions on appropriate departmental and corporate behaviour.

‘There’s no doubt this report gives serious weight to the view that the culture of secret settlements to dispose of difficulties when it comes to the higher echelons of RTÉ must end,’ she said.

‘They should have realised it was over in 2016,’ she said.

The chairpersons of two Dáil Committees still investigating RTÉ also warned that secrecy had no place in future RTÉ severance deals.

In the wake of the PAC Report into RTÉ, the committee chairman Brian Stanley told the MoS that the cosy solution of outrageous but secret going-away packages must end.

Mr Stanley made his warning

against the backdrop of growing Cabinet and political anger over the scale of bogus self-employment schemes forced upon vulnerable,

lower-paid workers by the station’s hierarchy. The MoS understands ministers are expressing alarm over the scale of the possible bill,

with one informed source warning: ‘The bill is going to be significant.’

Though the station has set aside a preliminary amount of €20m, it is

now believed in Cabinet that this could be the tip of the iceberg.

Significantly, at this week’s Fine Gael parliamentary party meeting,

Mr Varadkar singled out the issue, noting in a party meeting ‘one of the biggest issues facing the national broadcaster is irregular self-employment and PRSI that might not have been paid to the State along with other financial implications.’

It is believed the ‘other financial implications’ the Taoiseach was referring to is the level of compensation owed to RTÉ employees.

Mr Stanley told the MoS ‘the jawdropping exit packages we have been told about look all the worse when the cosseting of those on the top is set against how a third of RTÉ’s workforce – 695 out of 1,800 – had to fight and struggle for basic protections.’

Media Committee Chair Niamh Smyth said this weekend that RTÉ must recognise that the old way of doing things is gone.

‘When it comes to settlements with departing staff a new era of openness, transparency and accountability is required,’ she told the MOS.

‘The age of disguising major problems with large settlements, of moving the problem around, so to speak, is over. There can be no more one-off secret settlements.’

Responding to Ms Murphy’s criticisms, a spokesman for RTÉ said that RTÉ was a semi-state body and therefore the report of the C&AG did not apply to it.

‘This report makes it clear that it applies to a number of public bodies which come under the remit of the Comptroller and Auditor General, not to commercial semistate organisations, such as RTÉ,’ he said.

‘Having said that, severance payments to senior personnel we are aware of since 2016 have complied with the relevant recommendations set out by the C&AG in this report.

‘As a commercial semi-state, these severance payments did not require the approval of the Department of Public Expenditure and Reform, unlike the public bodies referred to in this report.’

‘They should have seen it was over in 2016’