Whistleblowers claim consulting giant KPMG rorted government to the tune of $1.8 billion over last decade

Whistleblowers working for a major consulting firm and the Department of Defence have lifted the lid on an alleged $1.8 billion scandal.

Whistleblowers working for a major consulting firm and the Department of Defence have lifted the lid on an alleged $1.8 billion scandal involving Australian taxpayers’ cash.

Two workers, one from KPMG and the other from the Department of Defence, have this week accused KPMG of ripping off the government by submitting exorbitant invoices and billing for hours not worked while contracted.

Australian taxpayers have paid the “big four” consulting firms (PwC, KPMG, EY, and Deloitte) $10 billion over the past 10 years, prompting concerns about the degradation of accountability and transparency.

Australia stands as one of the world’s biggest spenders on consultancy, with the industry generating thousands of jobs across major cities.

The close relationship between KPMG and Defence allows the consulting firm to win new work with little scrutiny, resulting in almost $2 billion in charges to the taxpayer over the past decade.

KPMG, which is the number one government client for Defence, allegedly had “significant influence” over senior Defence staff, according to the first whistleblower.

The company has also been accused of proposing new work already covered by existing contracts, sucking up public funds, and overcharging Defence through alleged financial errors.

Whistleblowers from inside a major consulting firm and the Department of Defence have lifted the lid on an alleged $1.8 billion scandal involving Australian taxpayer’s cash.

“We discovered that every KPMG invoice reviewed was incorrect … Defence had been consistently overcharged,” the Defence whistleblower said in a statutory declaration, first aired on the ABC’s Four Corners.

“KPMG … wasted a significant amount of public funds, enabled by Defence personnel who had been complicit in blindly awarding multiple contact extensions to KPMG … with little or no scrutiny.”

A second whistleblower claimed that KPMG told staff to bill Defence for work that wasn’t done

“I was instructed to record time spent on internal projects against Defence codes,” he said. “It‘s just plain dishonest.”

KPMG denies the allegations, saying there is no evidence to support over-billing of Defence and that complaints were not related to contract non-renewal.

In a statement, the company said it had investigated various claims made by a former contractor in 2019 and reportedly found no evidence to support over-billing.

“Before invoices are issued or paid … there is a formal process of extensive checks and balances involving both parties,” KPMG said.

“If there were any errors, they would be corrected before payment.”

KPMG has been contacted by news.com.au for further details on the matter.

The Albanese government has announced plans to cut spending on consultants and contractors by $3.1 billion over the next four years.

The furore over wasted government funds follows the lengthy ordeal involving big four firm PwC, which has been rocked by a tax avoidance scandal since January.

“What I don’t hear is anybody calling it for what it is … an abuse of privilege and power,” Labor senator Deborah O’Neill said via the ABC.

There have been moves to remedy the countrywide concern, with the Albanese government announcing plans to cut spending on consultants and contractors by $3.1 billion over the next four years.

The head of the National Anti-Corruption Commission has also indicated that consultants are under increasing scrutiny and are likely to attract considerable interest from the commission.

Originally published as Whistleblowers claim consulting giant KPMG rorted government to the tune of $1.8 billion over last decade