Senate Finance and Public Administration Legislation Committee [Part 2], , 18:01 to 24:55
Officials detail the remaining contracts with KPMG, including FBT services and financial reporting tools, while discussing the department's view on the firm's ethical performance and broader corporate conduct.
Topics: Procurement, Integrity, Government spending
Speakers: Senator Barbara Pocock, Cha Jordanoski, Speaker 3, Speaker 5, Speaker 1
>> Um thank you, Senator. We do have two other contracts with KPMG. Um uh one other contract expires at the 31st of October. this um this well this coming week in relation to FBT services um I can confirm that we have gone out to market for that contract and we have not included KPMG. The other contract we have with KPMG relates to our in financial statements reporting tool which I understand is excluded from the current um provisions by the department of finance.
>> It's excluded from the exclusions if you like. Correct. Thank you. So that is still underway that financial and what sorry can you tell me what the name of
>> I'd have to take the exact name on notice but I understand it's a financial um accounting reporting tool that a lot of government departments use to undertake their financial statements but I'd have to take the exact name on
notice. >> And can you give me the quantum of those two contracts?
>> Um can I just Yep. I'll grab that. Brilliant. Thank you. Thank you. Um so for the um FBT and taxation services that I mentioned, the total value is $79,200 and that term was from 22 22nd of November 2023 to 31st of October 2026. And the second contract in relation to I can give you the correct term now licensing and support for KPMG reporting models including um accelerated reporting model ARM and central reporting model CRM. The total value of that contract was uh 89,100. Um and that's from 1 July 2026 to 30 June 2029.
>> Thank you. Um have you granted any contract extensions in relation to any work being conducted? I can confirm we
have not.
>> You have not. Uh can you confirm that PE uh the department hasn't entered into any new contracts since the exclusion period began on June the 16th
>> for KPMG specifically? I can confirm we have not.
>> Great. Thank you. Um I I would like to hear what the department's uh view of KPMG is. Minister, this might be a question for you. Uh and the behavior of the firm more broadly.
Well, Senator, I uh I'm not sure in this capacity I can add to what uh I think the finance minister has responded to you on numerous occasions about this, including in the Senate. Uh and she has spoken for the government in relation to
So I I'm interested in this department's response because you have terminated a contract an important contract internal audit. most departments I I'm I will find out. I will inquire but that is uh a different approach uh than the department of finance's approach which is uh to um prevent any new contracts being let and just been extended out to I think the 1st of March or the end of February and you have terminated a contract. I'm curious about what what the department's view is that has led to the termination.
Uh Senator, I'm careful to answer the question in terms of the responsibilities of prime minister and cabinet. Um so it's important that I confirm that we terminated that particular contract for convenience as was available to us under the contractual terms. uh as I've indicated already that was both in reference to the external uh conduct of KPMG that was being reported to government but also in terms of the services that we were receiving under that contract and our comfort with the other internal internal audit service provider that we had contracted. A broader view than that is perhaps a question that you need to put to the department of finance uh as the overall responsible entity for uh contract management and um the advisory services panel under which uh KPMG is is usually um contracted.
>> Yeah. And Senator I know earlier I made a comment of we took into account the broader environment. Um I guess when we made the decision I'm just reflecting on the time in which we made the decision back in July and I just landed in the department. Um to be really frank we were consider um we were mindful of um the broader sort of environment and circumstances um we [snorts] looked as my um as um Mr. Gifford had mentioned the relevant performance and um experience that we had with the provider. We also looked as we are required under the CPRs the ethical performance the value for money um and we also were just really conscious of the broader environment. So those were kinds of the things that we considered when we made that decision on the to terminate the contract on the 10th of July.
>> Thank you. I'm just curious about your phrasing really. the broader environment. What we actually knew was happening in the broader environment was that uh some of Australia's largest corporate organizations were terminating and turning away from the use of KPMG because of their ethical breaches in use of conf confidential information, their failure to uh honor in any way a whistleblower and the um important information they brought forward and their persistent uh lying uh to to Senate committees over time about what had occurred. So that took a lot of work by this parliament to find out what KPMG had actually done. So the cover up once again is worse than the original sin. Are the is that is that what you mean by the external environment?
>> Uh yeah, we were looking at what was happening more broadly but also um per sort of the advice we'd received from the department of finance. So all of those considerations were put to mind as well as performance, experience, value for money um and the ethical um performance as well.
>> Thank you. Um, and when you last quick question. Yeah. Um, when you say you terminated for convenience, that's the terminology in the contract that allows you to terminate, but it doesn't really capture uh your your reasoning which we've just been hearing. Is that a fair statement, Mr. Gifford?
>> Uh, yes, that was a the contractual term I was using.
>> Yeah, it doesn't quite capture uh the the genuine the true environment that drove you to this decision. It's a technical term. In fact, what we've seen is very poor corporate practice which led Department of F I'm I'm putting words in your mouth. I'm asking you to agree with me.
>> Uh I'm I'm always loathed offer an opinion, Senator. What we don't resolve from was it was the appropriate decision for the department of prime minister and cabinet to terminate that contract.
>> Um I will note that we will now release the office of the official secretary to >> Um and we'll go to Senator Sharma. Yes.