PwC repaying almost $1 million in robo-debt consulting fees

Consulting firm PwC has decided to repay in full the nearly $1 million it had received to evaluate the robo-debt scheme in a move welcomed by Government Services Minister Bill Shorten.

In 2017, the Department of Human Services hired PwC to examine the scheme and provide recommendations in a final report, with an agreed fee of $853,859 excluding GST.

PwC interim chief executive Kristin Stubbins has said the firm will pay back the fee in its entirety.Credit: Edwina Pickles

But the firm never handed the department its final report, instead providing a PowerPoint presentation.

PwC acting chief executive Kristin Stubbins said the firm had decided to hand back the fees following the royal commission’s final report.

“Following the findings of the royal commission review into the robo-debt scheme, we do not feel it would be appropriate to retain the $853,859 fee for work carried out for the DHS on this matter,” she said in a statement.

“We have made representations with the minister’s office and will take the necessary steps for these fees to be returned.”

Government Services Minister Bill Shorten.Credit: Alex Ellinghausen

Government Services Minister Bill Shorten said it was better late than never.

“I appreciate the new CEO’s leadership in this matter,” he said.

Shorten had directed his department to ask PwC for a refund of part or all of the fee to be returned. It is unclear whether the department had contacted PwC before the firm offered to return the money.

“Why should you get paid nearly a million dollars for a report which never emerged?” Shorten said.

In the robo-debt royal commission final report, commissioner Catherine Holmes, SC, said the letter of engagement between the department and PwC required the firm to set out key recommendations in a final report.

“No report was ever delivered and instead, a PowerPoint presentation was made to the Minister for Human Services on 22 May 2017.”

But a report had been created, totalling 100 pages. The firm had also completed a PowerPoint presentation, and witnesses from the firm told the royal commission they had formed an understanding in June 2017 that the department considered the presentation would do for a final report, and PwC could invoice for the final agreed amount.

Holmes noted that the then-Secretary of the Department of Human Services Kathryn Campbell had decided to engage PwC, initiated the engagement on January 31, 2017, and approved the engagement letter which specifically referenced a final report by mid-February.

Campbell also monitored PwC’s work, attending presentations including one to the then-Minister, Alan Tudge.

“The commission finds that on or about 6 June 2017, Ms Campbell communicated to [PwC partner Terry] Weber that the report was not to be finalised and provided to DHS. Despite the importance of that indication from DHS, it does not appear to have been documented at the time,” the report said.

The commission found the PwC report was “far more extensive and critical” of robo-debt than the PowerPoint presentation.

“It revealed that it would not deliver the projected budget savings, that it was producing a significant percentage of inaccurate debts, and, crucially, that the online process had been a failure,” the royal commission report said.

Holmes concluded Campbell had decided the report would not be finished.

“The rational inference is that although the report was contracted for and all but finalised, Ms Campbell formed the view that its detail as to the deficiencies of the scheme was damaging and that it would be better for the department’s reputation, and her own, if it were not produced,” the report said.

Stubbins said the firm found the contents of the report “deeply distressing”.

“For PwC’s part, we acknowledge the findings of the commission in relation to PwC’s work for the DHS in relation to robo-debt,” she said.

“A PwC partner who gave oral evidence to the Royal Commission was asked to exit the partnership and is no longer with the firm.”

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