Four consultancy firms reported more than 520 real, potential or perceived conflicts of interest while being paid more than $40m to audit the safety and quality of aged care homes over two years.
The Aged Care Quality and Safety Commission (ACQSC) last year revealed some of the audits were rejected as they did not meet standards set by the federal government, which needed to launch a specialist unit to support the consultants and improve their work.
Outsourcing work deemed to be a “core function” of the public service has been criticised by federal senators, unions and an independent review that described the contracts as a “significant risk”.
The ACQSC, which has already announced plans to reduce its reliance on consultants, said the high number of declarations reflected its “robust conflict management processes”.
“Where there is a declared conflict, the commission will not assign an activity to that individual and/or organisation,” the commissioner, Janet Anderson, said.
“Consideration of declared conflicts is part of the commission’s standard planning processes for scheduling assessment and monitoring activities.”
The four firms – RSM, HDAA, SAI Global and KPMG – have conducted more than two-thirds of all audits since 2021. They were hired to address a backlog of inspections created by the Covid pandemic, when it was not safe to visit aged care homes.
In response to a question from the Greens senator Janet Rice, the ACQSC said some of the declarations included being paid by the provider, personal connections to the facility, or voluntary activities. This includes training or mentoring by consultants without a fee being charged.
The commission also revealed it spent $1.6m over two years managing the four firms, which includes the cost of establishing a quality assurance team to help consultants do the work properly.
The breakdown between real, potential and perceived conflicts is not known. The firms were all contacted for comment. Rice said she would seek further details at a Senate estimates hearing in February.
“The Australian public would rightly assume that auditing aged care facilities would be done by impartial government employees who have no stake in the outcome,” Rice said.
“People in aged care deserve to have these processes done by an impartial government team.”
Last year, KPMG told a Senate inquiry into the consulting industry that it reviewed and updated its list of conflicts for the ACQSC on a monthly basis.
“A number of engagements for the commission have been declined by KPMG on the basis that KPMG considered it would be inappropriate to act,” the spokesperson told the senate finance and public administration references committee.
The deputy national secretary of the Community and Public Sector Union, Beth Vincent-Pietsch, said the number of disclosures was “staggering” and underlined the challenge of using “large consultancy firms to complete work which should be done by government employees”.
“When a profit driven company offers audit, assurance, advisory and consultancy work all under one roof, conflicts of interest are inevitable,” Vincent-Pietsch said.
“It’s time governments weaned themselves off their costly and cosy addiction to consultants and started rebuilding the Australian public service’s in-house capability.”
In October, Anderson told a Senate estimates hearing the commission had demanded some consultants “undertake further work on it in order to meet our quality benchmarks”.
“I think that the public purse needs to be efficiently spent, and we were determined, and continue to be determined, to get the best possible quality from them,” Anderson told the hearing.
