TasNetworks denies profit errors despite scathing leaked email

Internal emails have raised concerns about $2.4 million worth of financial transactions at the state’s electricity transmission company.

Member for Franklin David O'Byrne speaks to the media on Parliament Lawns in Hobart on Tuesday, November 22, 2022.

TASNETWORKS executives have downplayed the possibility that internal accounting issues have caused the organisation to overstate its costs and understate its profits by millions of dollars.

In government business enterprise committee hearings in Hobart on Friday, member for Franklin David O’Byrne produced an internal email raising questions about accounting issues.

The email dated October 4 is headed: “ATTENTION REQUIRED: Overstated costs on purchase orders”.

“Employees are massively overstating costs against purchase orders, which eats directly into our reported profits,” it says.

“We have a widespread issue of employees ‘closing’ purchase orders incorrectly, thus massively overstating recorded costs against work orders, projects, and ultimately budgets.

“It is my belief that we may have overstated costs and thus underreported profits by as much as $2.4 million in previous financial years, due to this widespread behaviour.”

The author said they had cleaned up a number of discrepancies in the records, but were leaving the company within days and could not train anyone else to do the job in that time.

TasNetworks chief financial officer Michael Westernberg said he knew of the concerns.

“I am certainly aware of the email, which has been reviewed and from our understanding the person involved in providing that information has not interpreted the process and the system correctly,” he said

“We don’t feel that the numbers in here are totally accurate.”

TasNetworks CEO Sean McGoldrick said the company welcomed internal whistleblowers and he was confident the financial figures in the annual report were correct.

“We do not believe it would have affected the materiality of our annual reports,” he said.

“We’re very happy for people to draw attention to things that they may think it is wrong — we look into these thoroughly — and long may that continue.

“So we are not concerned about that, it’s just in this particular instance we believe it was the wrong interpretation but we will get that checked, we are in the process of checking it.

He said the company’s accounts were subject to review by the Auditor General and the Tax office.

Mr O’Byrne said he was not convinced the issues had been explained or addressed.

“Auditors only work on the information they are provided,” he said,

“Hiding mistakes by using savings and ‘headroom’ in other job is sloppy at best and incompetent at worst.

“Ultimately this is public money and Tasmanians need to have confidence they are being provided with accurate information.”

TasNetworks is looking to shed around a quarter of its 1200-strong workforce as part of a restructure.