NSW Treasury outsourced meeting agendas, minutes and accounting advice to consultants, an inquiry scrutinising the government’s $1 billion spend on the sector has been told.
The revelation comes as the Treasury imposed a ban on PwC providing new tax advice as the embattled consultancy firm reels from a confidentiality scandal.
Deputy Auditor-General Ian Goodwin said recent audits had found departments were bringing in consultants to provide accounting and legal advice, manage projects and give administrative support.
Treasury billed itself as a central advice agency to the government but had been using consultants to prepare meeting agendas, circulate minutes, arrange meetings and provide accounting advice on public sector accounting, he told a parliamentary inquiry on Thursday.
“You would think NSW Treasury would have the expertise, and should have the expertise on public sector accounting,” he told the upper house probe into the government’s use of consultancy services.
While rolling over consultancy contracts could be cheaper than going to market, the state risked building an undue reliance on companies performing core government services, such as policy development.
“There’s a risk and if not properly managed and considered, you will see an erosion of capability (in the public service),” he said.
The Audit Office in March estimated the state dished out at least $1 billion on external advice during the past five years.
But Auditor-General Margaret Crawford said the true figure was “probably larger” calling for better oversight from Procurement NSW.
Government advice to departments didn’t clearly define what a consultant was while state-owned corporations were exempt from revealing their spending, the inquiry was told.
“That billion dollars is what we were able to calculate from various sources … but it is a subset of a broader spend,” she said.
The use of consultancy services has been in the spotlight after a former PwC partner was deregistered for sharing confidential Commonwealth briefings on multinational tax reform with partners and clients.
The alleged conduct of Peter Collins is now the subject of a federal police investigation.
While PwC has assured the NSW government none of its staff implicated in the Collins matter are engaged in government work, the firm was this week banned until September from taking on any future tax advice contracts.
The decision by Treasury Secretary Michael Coutts-Trotter will not affect any existing engagements.
PwC will have to attest each month that no staff member found to have breached confidentiality or otherwise misused information received in the course of the Collins matter is involved in NSW government engagements.
Conflict of interest and confidentiality terms for all professional services engagements will be reviewed for potential weaknesses.
That review began after the March audit report found NSW does not procure and manage consultants effectively.
NSW Finance Minister Courtney Houssos welcomed the inquiry’s work.
“I look forward to receiving the inquiry’s recommendations on how to further strengthen our procurement regime to deliver integrity, confidentiality and value-for-money and NSW taxpayers,” she said.
– AAP
