Lingering concerns over conflicts of interest impact aged care auditor PwC

Question marks linger over the reasons why PwC did not disclose potential conflicts of interest when it signed a major Government contract for aged care services despite also providing key services to major aged care providers.

PwC’s newest Government contract, a $2.3 million deal with the Department of Health and Aged Care to audit the Scott Morrison Government’s workforce bonus program, has been suspended since June after concerns were raised. Other major contracts, including an $8.7 million deal to collect sensitive commercial data for the Independent Health and Aged Care Pricing Authority (IHACPA), remain active. 

• Concerns were first raised in May when PwC was caught up in a major confidentiality breach related to their tax advisory services. Senior partners used insider information to help companies avoid paying more tax.
• In addition, PwC and KPMG were singled out by unions and The Greens for their competing involvement in the aged care sector: both organisations provide consultancy and auditing services for aged care providers while also collecting sensitive data for the Government on multimillion-dollar contracts.
• Major concerns over their work with the Government included the potential for information breaches.

As reported by The Guardian, the Department of Health and Aged Care has confirmed the $2.3 million contract to review the workforce bonus program remains suspended with no additional clarity regarding perceived conflicts of interest. That specific contract involved a review of the $800 payments that were promised in 2022 to help attract and retain aged care staff. It’s believed more than 70% of aged care workers did not receive their bonus. 

“Given the recent well-publicised issues regarding PwC, it was considered prudent to pause the contract and obtain additional information and assurances. This information has been received and is being assessed,” a spokesperson for the Department of Health and Aged Care told The Guardian.

“The grant involved payments to aged care workers to retain and attract them to the sector. The audit was to determine that correct amounts had been paid. The grant program itself did not involve PwC and was already complete.”

Although PwC was not involved in the initial grant program, they have held separate Department contracts throughout the years. For example, PwC was a part of the consortium that expanded residential aged care Quality Indicators, creating six new Indicators that were introduced in April. The QI Program ensures relevant information is collected by aged care providers to assist in sector benchmarking and monitoring. 

They have also delivered auditing, advisory and consulting services for leading aged care providers, including Bupa.

While there is some sense in a firm like PwC consulting for aged care providers – it knows critical compliance and accreditation requirements better than most – it is concerning that no disclosure of potential conflicts of interest has seemingly ever been made. Leading Government officials, including The Greens Senator, Barbara Pocock, have been incredibly vocal over the issue.

“It beggars belief that PwC Australia did not disclose potential conflicts of interest in relation to this contract. The perception of a conflict of interest could easily arise from the multiple roles that PwC Australia was performing in relation to the government’s provision of aged care services. It’s simple: if you are working both sides of the street you have a duty to declare it,” Senator Pocock told The Guardian. 

PwC has remained firm that it maintains a “strict conflict and risk management process” ahead of any new contract signing.

However, with no clarity on the allegations or concerns over potential conflicts of interest, uncertainty lingers over what comes next for PwC, particularly if their work for IHACPA is ultimately impacted. The suspended workforce grants program review contract will only become more costly, too, as costs have already increased by nearly $140,000 due to the current delays.