KPMG billed Department of Defence for hours not worked, whistleblowers claim

Whistleblowers allege KPMG over-billed and incorrectly charged Defence, reportedly wasting ‘significant’ public funds on contracts that were extended with ‘little or no scrutiny’.

KPMG has reportedly over-billed and incorrectly charged Defence for hours that were never worked.

KPMG over-billed and incorrectly charged Defence for hours that were never worked, reportedly wasting “significant” public funds on contracts that were extended with “little or no scrutiny”.

The accusations, aired in an episode of ABC’s Four Corners on Sunday night, alleged KPMG sought to overcharge Defence by $1 million on a single proposal, charged for work never completed, and once billed for a consultant who wasn’t on the project.

Two anonymous whistleblowers told the program that Defence personnel were complicit in blindly awarding multiple contract extensions to KPMG, and claimed connections helped the firm win a big contract with the government.

“We discovered that every KPMG invoice reviewed was incorrect … Defence had been consistently overcharged. KPMG … wasted a significant amount of public funds enabled by Defence personnel … complicit in blindly awarding multiple contract extensions to KPMG … with little or no scrutiny,” the first whistleblower wrote in a statutory declaration provided to the ABC.

“KPMG’s initial contract for over $14 million was significantly higher than any other tendered price ... Within around 12 months, KPMG received well over $4 million in contact extensions.”

Defence said the allegations made by the first whistleblower had been dismissed after a 2016 investigation. “Defence complies with Commonwealth procurement policy… procurements made in relation to consulting services must represent value for money,” a Defence spokesperson said.

The second whistleblower, who spent two years working on defence projects, said there was “a lot of rule-breaking being normalised.”

“I absolutely had concerns about the quality of work KPMG was doing for Defence,” he said. “I would say that KPMH was doing work for defence that ultimately wasn’t needed. KPMG were simply happy, in my view, to propose these new works, get them signed off, and reap the financial benefits.”

A KPMG whistleblower said there was ‘a lot of rule-breaking being normalised’.

The revelations come after a huge scandal engulfed PwC when senior partners were found to have misused confidential Australian government information to assist multinational companies avoid paying more tax.

The second whistleblower said KPMG were “prepared to break the rules” to win more business from the government. “Ultimately it’s the taxpayers who are paying for this,” he said.

He also outlined a culture of harassment and bullying within the workplace. “I tried to raise that within KPMG and it was rebuffed,” he said.

When he tried to report the matter to the KPMG whistleblower hotline, he claimed his contract was cancelled and he received no more work with the firm.

“I lost close to 20kg in weight, I lost enamel from my teeth,” he said. “My legal costs are still increasing, and I think in the end I’m likely to have incurred more costs than I ever earned from my work at KPMG.”

In a statement to The Australian, a KPMG spokesperson said: “We cannot find evidence to support claims made around improper billing of Defence.”

“The majority of our engagements with Defence are deliverable-based contracts, which include an agreed outcome aligned with payment outcomes. Before invoices are issued or paid on individual projects, there is a formal process of extensive checks and balances involving both parties.

“If there were any errors in invoicing - whether for fixed price or time-based work - they would be identified in the review process and corrected before payment.”

KPMG director Peter Corcoran, who was hired by the firm from Defence in 2019, also denied an allegation aired on the program that he breached a 12-month “cooling-off period” stopping him from working for Defence in his first year at the firm.

The ABC cited an email from within KPMG that stated: “Peter has a further six month ban from working directly with Defence, but his contribution to date has been immense.”

The email later read: “Peter continues to meet Defence personnel on the ‘side’, maintaining relationships and building new relationships.”

A spokesperson for KPMG said: “We have reviewed this matter and it is clear there was no breach of the contractual cooling-off period.”