‘Staggering’ number of conflicts of interest declared in aged care audits

The controversy over the government’s reliance on outside consultancies has spilled over to aged care.

The federal government has been conducting an inquiry into the integrity of consulting services since last March, with a final report due to be handed down in March 2024.

The Aged Care Quality and Safety Commission (ACQSC) is a government regulator with responsibility for auditing aged care facilities to ensure they meet mandated standards.

Since 2021, four consultancy firms – RSM, HDDA, SAI Global and KPMG ­­– have been paid more than $40 million for supporting this work, which includes conducting interviews and inspecting facilities. Consultants completed about 67 per cent of the department’s auditing work, while ACQSC staff carried out the remainder.

However, according to The Guardian, firms engaged by ACQSC also reported more than 520 “potential or perceived” conflicts of interest.

Failed audits

ACQSC also set up a specialist unit to oversee the contractors’ work when some audits failed minimum quality standards.

“There have been instances where we have declined to accept one of their reports and have required that they undertake further work on it in order to meet our quality benchmarks,” ACQSC commissioner Janet Anderson previously told the inquiry.

ACQSC has already announced that it would be reducing its reliance on consultants, but defended the high number of conflict of interest declarations, saying it represented a “robust conflict management process”.

“Where there is a declared conflict, the commission will not assign an activity to that individual and/or organisation,” Ms Anderson told the inquiry.

“Consideration of declared conflicts is part of the commission’s standard planning processes for scheduling assessment and monitoring activities.”

Tackling a backlog

The consulting firms were initially contracted to tackle a backlog of inspections following the pandemic. 

ACQSC said the conflicts of interest registered by the consulting firms included being paid by the provider, personal connections to the facility or voluntary activities, including training or mentoring.

Deputy national secretary of the Community and Public Sector Union Beth Vincent-Pietsch said the number of disclosures was “staggering” and that government work should be done by government employees.

“When a profit-driven company offers audit, assurance, advisory and consultancy work all under one roof, conflicts of interest are inevitable,” Ms Vincent-Pietsch said.

Former senior public servant David Tune last year released an independent report raising concerns about engaging contractors, saying there were some “critical gaps” in the organisation that required urgent attention.

“The high proportion of assessments undertaken by third-party provider assessors represents a significant risk for the commission,” Mr Tune’s report said.

“The commission should seek to reach a better balance to ensure more activity is brought in-house and undertaken by its permanent quality assessor workforce.”

Time to restructure

Mr Tune recommended a department-wide restructure.

“The commission must, as a matter of urgency, take action to fix its organisational structure, senior leadership and internal governance,” he said.

“It needs strategic, visible leadership, and a focus on being engaged right across the sector and community, in an open and transparent way.”

Mr Tune’s report was commissioned by minister for aged care Anika Wells.

Do you think the government needs to cut back on hiring consulting firms? Why not share your opinion in the comments section below?

Also read: Taskforce considers user-pays model for aged care