Consultancy firms are being paid lucrative contracts to audit the quality and safety of residential aged care homes while simultaneously charging providers for advice on audits and accreditation.
The Community and Public Sector Union believe this arrangement exposes taxpayers and residents to potential conflicts of interest, as consultants could be asked to audit clients that are not disclosed to or detected by government.
Since 2021 the aged care safety and quality commission has been paying KPMG staff to undertake audits of residential aged care facilities. Government contracts show KPMG was paid $104,166 to complete this work between September and March.
According to KPMG’s website, aged care providers are also being sold consultants who can “integrate innovative approaches with a deep sector expertise of both government aged care policy and the issues faced by service providers”.
The federal government uses consultants to boost the number of aged care auditors, with $21.6m set aside in the October 2022 budget to maintain a “third-party quality assessment workforce”. This workforce is expected to complete 1,443 audits this financial year, strengthening government oversight of the sector.
But the CPSU assistant national secretary, Michael Tull, said the commission’s reliance on consultants was problematic as perceived conflicts of interest could damage trust in government, which could be a breach of the public service code of conduct.
“What we have here is a consultancy assisting the aged care regulator to audit aged care facilities, while at the same time, it seems that same consultancy is also advising aged care providers,” Tull said. “At face value, that looks like a potential conflict of interest.”
“We’re talking about aged care regulation, an area of serious public concern, where many people think profit motives stand in the way of quality care. There cannot be even the slightest room for people to doubt the independence of the aged care regulator.”
A KPMG spokesperson said there were no conflicts of interest and the firm had “extensive processes” in place to manage any potential risks.
“When considering a request to perform an audit, we undertake a detailed process to ensure the engagement is free of conflicts,” the spokesperson said.
“Separately, the commission also conducts its own comprehensive processes to review potential conflicts of interest throughout the course of engagements and for the program as a whole.”
The commission has previously told a parliamentary inquiry that it prompts KPMG to declare any conflicts of interest every month and that when conflicts are identified, work is not awarded.
Tull said relying on declaration by consultants was not an adequate response given KPMG’s links with the sector. “At the end of the day, the current arrangements just don’t pass the pub test,” he said.
“The moment you remove clear transparency and accountability measures, throw in financial motivations, and a few conflict of interest risks, you are left with what we have now.”
The CPSU has not alleged any rules have been broken regarding aged care.
The work of consultants is under scrutiny as government seek to reduce expensive outsourcing, and after allegations global firm PwC allegedly profited by sharing confidential government tax policy with clients.
The Tax Practitioners Board deregistered former PwC adviser, Peter-John Collins, last year after finding that he shared confidential information and documentation obtained through consultations with Treasury.
On Wednesday the Greens senator Barbara Pocock said the accountancy firm, which competes with KPMG, should be banned from government contracts, while highlighting “a dire need for transparency and accountability”.
