The federal government has suspended a major project with the embattled consultancy firm PwC as it continues to seek assurances about potential conflicts of interest.
The health and aged care department secretary, Prof Brendan Murphy, told an estimates hearing this month that the government was having “very frank discussions” with PwC after the misuse of confidential tax policy information.
Those discussions did not satisfy the government, which has now suspended, until further notice, PwC’s “audit of a workforce grant program” in the aged care sector.
“It remains to be seen if, and which, further work programs or contracts may be disrupted as a result of ongoing discussions between the department and PwC,” a department spokesperson said.
The move shows departments are not only hesitant to enter future contracts with PwC – or any future spin-off company – but are reviewing existing arrangements.
The health and aged care department suspended the contract despite having sought “further information from PwC regarding conflicts of interest management” with “no undisclosed conflicts of interest being identified”.
PwC was contacted for comment. The reasons for suspending the contract were not clear.
The federal government provides a number of grants to aged care providers to assist with workforce shortages – including reimbursements for Covid-19 leave payments.
The Labor senator Deborah O’Neill said government departments had woken up to the potential conflicts of interest posed by consultancy firms which are often accused of “walking both sides of the street”.
“Government departments are certainly much more alive to the [risk] now than they previously were before the work of the Senate, which has uncovered just how aggressive the sales culture is at PwC,” O’Neill said.
“There was a level of trust when purchasing the service of an assurance company. Everything hinged on the integrity of the company brand. There was perhaps a reduced degree of scepticism and we are now seeing that has changed.”
An email from the Independent Health and Aged Care Pricing Authority’s acting chief executive, Joanne Fitzgerald, confirmed a separate contract with the department could give PwC access to protected pricing information subject to secrecy provisions.
Meanwhile, a division of PwC is spruiking consultants for the aged care industry who can “benchmark your organisation against others in the industry” or “assist service providers to remain viable and accountable to their service costs and pricing”.
When concerns about the Independent Health and Aged Care Pricing Authority contract were revealed, a PwC spokesperson stressed the firm had “strict conflict and risk management processes” that were “always followed rigorously before an engagement is commenced”.
On Sunday PwC announced plans to divest itself of all government work in Australia by spinning off a new company, as part of a $1 buyout by private equity investor Allegro Funds.
The acting chief executive, Kristin Stubbins, said the company would not profit from the transaction aimed at saving more than 1,000 PwC jobs. She also told a New South Wales inquiry that anyone involved in the misuse of confidential information would be publicly named – after an internal investigation – and not transferred to the new company.
Shortly after the divestment was announced, a group claiming to be current and former PwC partners ridiculed the firm’s response to the damaging tax scandal as “grossly inadequate” and demanded more transparency and accountability.
Last month senators and unions raised concerns about PwC being paid $8.7m to collect sensitive commercial data from aged care providers while helping the Australian government set new service prices and simultaneously charging industry players for advice on pricing.
