Black Books

The RTé Financial Underground, and the RTé Black Fund, explained; 'ish. ??

Over the last ten days you might have been introduced to some new financial parlance, like?Financial Underground,?Black Funds,?Black Budgets.?If you follow @homeofthedixes you may even have come out of your weekend black and blue from them.

This is an attempted explainer about what I meant when I virtually man marked Joe Brolly with a couple of corrections.

First things first, and I make no apologies;?Financial Underground?has no other reference, or technical text or academic backup available other than my own trap.?It is, as a former Bank CEO might say,?pulled right out of my arse.

Over the last decade, a elite echelon of RTé executives, or RTé Executive Cartel if you like, developed an out-of-sight salary top-up swap shop and an employee perks trafficking system, and restricted it to members of this privy.

This was not your everyday work kitty or a lotto syndicate that one of the lads in payroll kept an eye on.?This was a material high value transactions exchange facility, that was entirely funded by RTé’s own liquid or current assets if you like. It was managed and controlled by RTé resources.?From their RTé workplace, during their RTé working hours, and using, what any reasonable person would be entitled to presume, their employer's’ facilities and devices.

Since it was a secretive trading scheme that did not exist on the RTé Management Accounting System, it was entirely outside the reach, control and oversight of the RTé Finance Department, the RTé Internal Audit Function, the RTé Risk and Compliance Officers, and the most independent assurance provider of them all, supposedly?? , the RTé External Auditors.

For any one of those reasons, I am entitled to call the RTé big wigs undisclosed ‘till now, off-road and unmapped interchange with agents, advertisers, flip-flop makers, car dealers and ticket vendors, not forgetting whatever-you’re-having- yourself, a?Financial Underground.

You might have noticed I did not include the Ministerial appointed Board of Directors in my casting call of the guardians of RTé’s assets, goodwill and operations.?While I cannot prove?(for now)?that they had membership of the RTé Financial Underground, or that any one of them were even aware of it.?I can prove they are all equally responsible for its existence.?The RTé Financial Underground was maintained by assets that each director had an individual responsibility to provide stewardship for, and ensure their only use was in service to the organisation the same directors make decisions for.

The Board of Directors of RTé can deny knowledge of the Financial Underground running under their watch, but they cannot deny responsibility for it.?

Something as simple as the credit notes being raised against advertisers’ invoices, direct impacts on RTé’s actual sales figures, and their debtors/ current assets. Even if it was just a quarterly report from the Credit Controller to the Audit & Risk Committee. If they did, well, they actually didn’t, because that should have been enough to raise a concern at board level, even with the external auditors.

Or what is now performing the function of a , those € 75,000 variances from budget did not elicit an explanation in the respective management accounts presented to the board.?Which would have gone through the Audit & Risk committee in far more detail, one would hope, before any board meeting was called to order to approve them.

Now for the?RTé Black Fund.?Black Funds are not unknown, and they do exist with background explanations.?My name is Vanessa Foran, not google. But for the purposes of this article, I’ll be taking the short cut.

You will have heard of?Black Ops.?Black Ops are provided for by?Black Budgets.?

A black budget is, simply put, money that is diverted from official sources, for unofficial off-site use. Legitimately earned but not so legitimately spent. You should also interpret?unofficial use?as not authorised, or budgeted, or monitored or coming with full oversight, or transparency.

Our RTé Financial Underground is every bit the equivalent of a Black Budget.?It diverted funds from an official source to maintain its own keep; without doubt an unofficial use.

What you are being convinced is an industry standard Barter Account with a media barter facilitator, Astus, it qualifies as a Black Fund as it was funded and enabled by a Black Budget fabricated by the RTé Financial Underground, and kept out of sight.

It is not a Slush fund with cash to splash, or a Contra account used for barter trading and account settling between separate commercial entities.

Both these standard and accepted bookkeeping treatments for transactions in any organisation using them are parked onto the organisation’s own general ledger.?In full sight of the Finance Department, Internal Auditors (if applicable), and External Auditors.

Simple?Contra Accounts?are between two parties within their respective trading environment.

Say Z has a customer, A, who owes Z (A is a debtor of Z in Z’s accounts, and Z is a creditor of A in A’s accounts).?

But A is also a supplier to Z, and Z owns money to A (therefore Z is a debtor of A’s and A is a creditor of Z’s).??To roll this out , the accounts departments on either side might agree to wash one balance with the other, on either side.?Reduce the money owed to Z by the balance on A’s creditor account.?And vice versa in A’s accounts.

A completed contra leaves a lot of footprints in both general ledger’s tracking mechanisms, and are well documented with journals. They have to be. Its a classic money laundering trick to over and under invoice, and contra accounts are meticulously maintained and detailed to avoid regulatory breaches, and upsetting the risk officer.

Not so common anymore, contras are an old school T-Accounting practice; outsourcing and diminishing booking keeping skills may explain its unfamiliarity to many.?However, Revenue – Customs and Excise, and the Haulage industry are ones of the few who I know that still practice contra accounting.

A?Slush fund?is also a general ledger account; however, it may not be labelled as?slush.?This is an account class that would be kept around should there be a need to record income that has been received that might not have an sales invoice looking for it.?Income that is unusual or unexpected, and not recurring.?Such as an overpayment, or warehouse cash sales of obsolete stock.?An organisation’s slush income if you like.

Apologies for the jargon.?To cut through it, just know this as fact.?Contra Accounts or their slang version, Barter Accounts, and Slush Accounts, that you will have heard mentioned far too much since Ryan Tubridy’s actual contract agreement with RTé came to light, by people who should know better than that, are all fixtures on an organisation’s own management accounting system.

Astus, another name you may have only just been introduced to, is a Barter Facility Provider to the Media Industry.?It was through with this company that the RTé Financial Underground conducted most of its transactions.?In fact, one of the pull quotes on their website explains them perfectly.

Astus is a media trading company that delivers bespoke business solutions for our clients and media partners.

I call this?bespoke business solution?taken up by the RTé Financial Underground,?a Black Fund.

• I can call it a Black Fund because it was maintained and operated completely outside the managed and supervised, and regulated, RTé finance department.
• I can call it a Black Fund as it had no footprint anywhere within RTé’s financial apparatus, it was not transparent, or subjected to any oversight or basic auditor testing.
• I can call it a Black Fund because it was never,?we are told, reported to any board director, or recorded as existing in any report to the board.
• I can call it a Black Fund because it was operated in a different jurisdiction by a company who reports in a different currency and charges a handler fee that is not out of place within the higher risk?bespoke business solution?services providers. (35% and maybe plus, of the gross value of the transaction between the trading parties ).
• I can call it a Black Fund because all the RTE connections responsible for the account with Astus, and who supplied funds to it and paid the services costs it came with, were all Semi State Employees and or Semi – State Officers.??
• I can call it a Black Fund because Judge Anthony Halpin qualified RTé's arrangements for treats and top-ups as clandestine, secretive and dubious

These ?s are all markers of a Black Fund operated with a Black Budget, aka, the RTé Financial Underground, aka the RTE Executive Cartel.

The Minister seriously needs to consider getting a Court appointed receiver in to run the day-to-day job of the National Broadcaster, while the root and boot forensic audit investigations continue.?There is no certainty about the financial wellbeing, or even its true financial position. Nor is there any confidence in the stability of its governance, or in the credibility of the new Director General's leadership ensemble until it produces financial statements that can be trusted.

But what I can say with some certainty it that Grant Thornton Ireland will be there for a good bit yet. And I fully expect some previous years financial statements to be restated.?Turning all that work on the original www.broadsheet.ie series to dust.???

RTé’s reputation has been completely disembowelled. It needs a firm and lengthy rehab to have any chance of recovering it.

Let a Receiver who reports to a Judge make decisions for RTé without the influence of what remains of RTé Financial Underground, and those that enabled it by not stopping it or reporting it, or even noticing it: its current Board of Directors.

The Minister must act.

?

??2023?Vanessa Foran