Concerns raised over consultancy firms assisting aged care providers

Two of the Big Four accounting and consultancy firms are in the crosshairs of unions and The Greens as questions are raised over potential conflicts of interest surrounding their work in aged care.

KPMG, which is responsible for auditing aged care facilities for the Government to ensure they meet Commission standards, also offers consultancy services for aged care operators seeking advice on audits and accreditation.

Meanwhile, a new $8.7 million Government contract for PwC to help set the price of aged care services has raised eyebrows as the firm faces allegations it benefited from sharing confidential tax policy details with clients.

Consultants in aged care

• KPMG is paid by the Aged Care Safety and Quality Commission to conduct audits of residential aged care homes
• They were paid just over $100,000 between September 2022 and March 2023
• PwC will receive $8.7 million from the Government to collect provider data that will be used to set new service prices
• Both organisations also provide consultancy services for aged care providers

PwC advises providers on what pricing consumers should be charged, and they will now do the same for the Government to help set industry standard pricing. They will collect “cost and activity data” from aged care providers to influence the Government’s 2024 costing framework. But the allegations raised against PwC are cause for concern.

The Greens senator, Janet Rice, queried what measures are in place to ensure confidential information is not shared again. Senator Rice believed it would be inappropriate for the Government to engage with PwC while the Inquiry into management and assurance of integrity by consulting services is ongoing. The Inquiry is looking into the Government’s use of external consulting services and potential breaches of confidentiality.

“I am incredibly concerned about PwC’s access to confidential information given the scandal that’s playing out with its breaches of confidentiality,” Senator Rice told The Guardian. “We need to have a ban on contracts with PwC given the tax scandal that’s still playing out in the media. They should not be given contracts that provide access to such confidential information while they are still under such a cloud.”

A Government spokesperson also provided a statement via The Guardian in response to Senator Rice’s concerns, outlining that PwC staff involved in the aged care service fee project have been required to sign a deed of confidentiality. A breach could result in the removal of individuals from the project, mediation between the parties, termination of the contract or financial and custodial penalties.

Union rings alarm bells

The Community and Public Sector Union (CPSU) has remained vocal about its concerns over the Government’s reliance on consultants. $21.6 million was set aside in the October Budget to maintain a “third-party quality assessment workforce” that’s expected to have completed nearly 1500 audits this financial year. The funds dedicated to aged care auditors raise concerns over independence according to CPSU Assistant National Secretary, Michael Tull.

“What we have here is a consultancy assisting the aged care regulator to audit aged care facilities, while at the same time, it seems [as though the same] consultancy is also advising aged care providers,” Mr Tull told The Guardian. “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.”

KPMG, like PwC, has acknowledged concerns about conflicts of interest. Both organisations have said they have processes in place to identify conflicts of interest prior to beginning any contract or engagement. In addition, the Aged Care Safety and Quality Commission conducts its own assessment and review process to ensure transparency.

Despite the reassurances, Senator Rice and Mr Tull remained uneasy about the reliance on either organisation to self-disclose conflicts of interest.

“At the end of the day, the current arrangements just don’t pass the pub test,” Mr Tull 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.”

CPSU has not made any claims that KPMG has done anything wrong with its aged care auditing and accreditation consultancy.