The chair of a high-profile inquiry into the use of consultants in NSW has flagged the committee is looking at tightening the ethical requirements and regulations by putting public sector conduct codes into procurement contracts.
Former corporate lawyer Abigail Boyd, the Greens representative in the NSW upper house, told The Mandarin that the Public Accountability and Works Committee is taking seriously suggestions made by whistleblower Brendan Lyon for the inclusion of ethical codes in contracts.
Lyon left accounting firm KPMG following concerns about the way the firm handled services for separate departments related to the creation of a new entity known as the Transport Asset Holding Entity, which housed depreciating transport assets.
The previous state government created TAHE to put depreciating assets “off budget”, making its bottom line appear healthier.
The NSW Audit Office released a report in January branding the creation of TAHE, which began operations in July 2020, as “not cohesive or transparent”.
“It delivered an outcome that is unnecessarily complex in order to support an accounting treatment to meet the NSW Government’s short-term Budget objectives, while creating an obligation for future governments,” the audit office report said.
Lyon told the committee that one way of tightening the regulation of contractors and consultants was to bind everyone via their contract to a common code of conduct or ethics, such as any code applying to public servants.
That means that a code could be enforceable against any consultant whereas breaches of other codes such as the accounting profession’s code of ethics could only be dealt with by accounting bodies.
Boyd said that the committee she chairs was interested in increasing the expectations the government should have of consultants, adding Lyon’s suggestion was on the list of possible measures.
“But what has become crystal clear throughout this inquiry is that ultimately a rule is only ever as good as its enforcement,” Boyd said. “All the time there are no real consequences for the bad behaviour of these consulting firms, they will continue to do what they can get away with.
“Government should not be afraid to strictly set and enforce the terms of engagement above and beyond what may be standard in the corporate sector, recognising the high standards and expectations taxpayers have for prudent use of public monies.
“It will also then need to be much stronger in enforcing those higher standards and expectations by refusing to transact with firms who do not follow the rules.”
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