PwC Australia billed taxpayers to deliver a “risk management workshop” to a department that was subsequently forced to suspend the firm’s $2.3m contract in the aged care sector, pending an investigation into potential conflicts of interest.
The $36,000 engagement has been described as “frankly absurd” by the public sector union and criticised by legal academics given a Senate committee report released in June 2023 that confirmed the consultancy firm had been engaging in a “calculated” breach of trust.
The workshop was delivered to public servants at the Department of Health and Aged Care on 13 December last year, days before a regulator banned a former PwC partner who had breached confidentiality agreements and misused sensitive information. It occurred before the department was aware of the PwC breaches.
The workshop took place years after senior Australian Taxation Office officials personally briefed PwC managers on “a range” of concerns about the risks posed by the firm’s own conduct, according to documents tendered to the Senate. A department spokesperson said it helped design the workshop and met with PwC three times before it was delivered.
“The purpose of the workshop was to discuss programs associated with the implementation of the Medicare Urgent Care Clinic program,” the spokesperson said. “The workshop was attended by a number of staff across a range of classifications from several areas across the department.
“This contract was finalised, and the workshop held, before the department became aware of PwC’s breach of confidential information.”
Weeks after the PwC workshop was delivered, the treasurer, Jim Chalmers, said he was “absolutely furious” at the firm over the tax information scandal and promised to “throw the book” at those responsible for what he labelled a “shocking breach of trust, an appalling breach of trust”.
PwC was contacted for comment on the workshop but a spokesperson said they were “unable to comment on client engagements”.
The firm has already launched an internal inquiry into the breach of confidentiality, moved on a number of partners, re-trained staff, announced a ban on political donations and divested its government services division for just $1.
Michael Tull, the assistant national secretary of the Community and Public Sector Union, said the workshop with PwC Australia revealed the bureaucracy’s overreliance on external advice.
“Asking those consultants to provide advice to the public service on risk management is frankly absurd,” Tull said. “The strongest action that the public service can take to manage risk and improve transparency and accountability is to reduce the use of consultants.”
University of Wollongong senior law lecturer, Dr Andrew Schmulow, also criticised PwC over the “risk management” contract given the firm had already breached confidentiality agreements and misused government information.
“It is presumptuousness for PwC to be billing for advice on how to avoid conflicts of interest when its entire business model is steeped in walking both sides of the street,” Schmulow said.
The term “walking both sides of the street” refers to consultants giving advice to government on how to best engage with the private sector, while also advising on how companies should interact with departments.
In June, the health department suspended PwC’s $2.3m contract to audit the Morrison government’s workforce bonus program, which provided two pre-election payments worth up to $800 to attract and retain staff in the struggling aged care sector.
The contract is still suspended with an official notice stating officials were probing “potential conflicts of interest and related matters”, which have not been publicly revealed.
PwC Australia did not disclose any real or perceived conflicts of interest to the federal government before it was awarded the auditing contract.
“Given the recent well publicised issues regarding PwC, it was considered prudent to pause the contract and obtain additional information and assurances,” a department spokesperson said. “This information has been received and is being assessed.”
PwC Australia has not commented on the auditing contract but has previously defended its processes.
“PwC Australia has strict conflict and risk management processes to ensure adherence with our conflict of interest rules – and these processes are always followed rigorously before an engagement is commenced,” a spokesperson said in June.
