[Peetwo]

Murky Mandarin & possible dodgy deals with KPMG -

Here we go again -   In what seems to be a common theme surrounding M&M's department & agencies, Sterlo in an abbreviated session with the department is sniffing around yet another possible dodgy deal & perceived conflict of interest issue. 

Continuing on from the bottom of my 'bump in the night' post (with additional Hansard), quoted here:

ASA at Estimates 05/05/16 - Hansard

Hmm...how come everyone else seems to have a copy of the AQON?? 
One other passage of more than passing interest, which I almost missed & on the subject of ASA, trough feeding, conflicts of interest and dodgy deals, occurred between Sterlo & Murky right at the start of the DoIRD session:

...Senator STERLE: Are you able to point us in what areas they are at this stage?

Mr Mrdak : In terms of the department itself, they predominantly range around some specific functions which could be considered for no longer continuing. Some areas that have been identified include the performance of some functions such as the administration of financial assistance to local government and other payment processes, which could be considered for centralisation in other areas of government such as the Department of Finance; and ceasing areas such as the department's performance of activities in maritime regulation, and whether that better sits with the Australian Maritime Safety Authority. It also indicates areas where government may wish to consider larger structural changes, such as considering the future of Airservices Australia.

Senator STERLE: How?

Mr Mrdak : Whether the government wishes to consider future options for different governance and ownership arrangements for some of our statutory bodies, including Airservices Australia.

Senator STERLE: So that could be outsourcing?

Mr Mrdak : It could be or it could be looking at taking it into different ownership structures to what they currently are.

Senator STERLE: What could they be? The reason I am asking is: we all know for Airservices Australia there is no competition, and it is quite a bit of a money earner for the government. Could you shine a light for us on how that could be done in a different way?

Mr Mrdak : The Functional and Efficiency Review did look at international examples of where governments have placed their air traffic control provider—air services provider—in different governance structures, particularly the United Kingdom and Canada, where they have been placed in either part-private ownership or a not-for-profit government body. They were models that were looked at in the scope. The Functional and Efficiency Review recommended that we consider further options for the future of Airservices Australia..

Senator STERLE: So 'functions ceasing' is, as it suggests, 'How can we outsource certain parts of the department or work that is conducted by the department or agencies around the department?' Was there a flipside where there was a study looking at how you could bring stuff back?


Mr Mrdak : That was not an area that the functional efficiency review settled on as one of its 18 areas of action.


Senator STERLE: We will watch that space with some interest. The government is going into caretaker mode in the next couple of days, but is there an indication of when it will respond to that?

Urban developers & Secondary Airports; ASA & OneSKY with Thales/ICCPM; and now KPMG with their snouts in the trough. Where will it stop nobody knows but IMO it is high time there was a Federal anti-corruption body overseeing the trough-feeding pollies & fat-cat bureaucrats.  

Good to see that even with the sad departure of the Heff that Sterlo has absolutely no intention on easing up on keeping the bureaucracy on their toes & honest in Senate Estimates -

On the KPMG front it would appear they have their snouts firmly entrenched in more than a couple of other government fed troughs...

Courtesy the other Aunty... :

NSW council mergers: Court action over access to internal government documents
By Nick Dole
Updated Wed at 7:13pmWed 1 Jun 2016, 7:13pm

Lawyers for several New South Wales councils fighting forced mergers have alleged independent consultants engaged by the State Government were "doing the Government's bidding".

Key points:

• Local councils seek access to internal government documents
  
• Government documents suggest lack of independence by consultants, court hears
  
• Government barrister described request as an "abuse"
  

The forced mergers are under scrutiny in the Land and Environment Court.

Barrister for Strathfield Council, Tim Robertson SC, told the court that new documents suggested a "lack of independence" on behalf of consultancy firm KPMG.

"Rather than being an independent advisor to government, KPMG was intimately involved ... in order to do the Government's bidding," he said.

A document authored by KPMG for the Government, entitled Options Analysis – Local Government Reform, dated July 2015, suggests the firm was helping the Government build the case for council mergers.

"[Office of Local Government] has commissioned KPMG to support development of a robust evidence base to support the NSW Government's Fit for the Future agenda," the document said.

Greens MP David Shoebridge, who obtained the document, said it showed KPMG's review of the Government's modelled savings was not independent.

"KPMG were doing the modelling and came up with the initial savings and then they marked their own homework," Mr Shoebridge said.

During question time, Opposition Leader Luke Foley questioned the Premier Mike Baird about earlier statements that KPMG had performed independent analysis.

"What on earth was independent about the process?" he asked.

Mr Baird responded by accusing the Opposition of blocking reform.

Councils want to 'trawl through records' to find case

The councils have sought access to a range of government documents in the hope of finding evidence to support their claim.

They included departmental briefing notes and records of the meetings at which Local Government Minister Paul Toole was present.

The Government's barrister, Neil Williams SC, described the request as an "abuse".
He said the councils were "seeking to trawl through extensive records in the hope of finding a case".

However, Justice Tim Moore refused the Government's request to have the issue set aside and will consider the councils' request.

A spokesman for Mr Toole said analysis by IPART, Ernst and Young and KPMG all reached the same conclusion about the benefits of council reform.

"Each merger proposal was the result of careful consideration of all the evidence, of which KPMG's analysis and modelling was just one part," he said.

"KPMG's analysis and modelling of the merger proposals is entirely contained within documents that are publicly available."

Mr Baird has previously said he makes no apology for following the boundaries commission consultation process.

"Clearly councils have taken that opportunity in some instances to undertake legal action, that's their right to do it, I don't think they're doing the right thing by their ratepayers," he said.

"We will continue to push ahead, obviously we're listening every step of the way but what we're determined to do is the right thing by the ratepayers."

Council merger 'process flawed' critics say

Save our Strathfield spokeswoman Nella Hall hailed Justice Moore's ruling a victory.
"Finally, we can see a bit of justice coming through. It has showed that the delegates [process] is flawed," she said.

"The process is flawed and it gives us an opportunity to ensure that the process is done right, and done with transparency and democracy, because that has not happened."

On Tuesday, the Land and Environment Court halted the forced merger between Sydney councils Strathfield, Burwood and Canada Bay due to legal flaws in a report from a State Government appointed delegate.

Strathfield Council has decided to push on with the challenge to the forced merger in the Land and Environment Court.

Mosman, Hunters Hill, North Sydney and Lane Cove councils were also due in court on Wednesday.

The State Government created 19 new councils under its forced amalgamation program earlier this month, reducing 152 councils to 112 and sacking hundreds of councillors, and appointing administrators in their place.

The Government originally proposed to create 35 councils but said earlier this month it had delayed its decisions on nine of them because the councils involved had launched legal action.

&..from the Daily Telegraph:

State Government forced to give up KPMG merger documents to the NSW Land and Environment Court
June 2, 2016 1:12pm
Ian PatersonNorth Shore Times



Premier Mike Baird faces protesters against council amalgamations at Manly Beach. Picture: Braden Fastier.

THE STATE Government will be forced to hand over closely guarded documents relating to KPMG’s role in preparing and analysing council mergers.

Lawyers representing several councils — including Mosman, North Sydney and Lane Cove — have questioned the independence of KPMG during proceedings in the NSW Land and Environment Court as they sought to obtain various documents including Cabinet files and departmental briefing notes.

KPMG issued a statement this morning refuting any suggestions they did not act independently during their analysis of council amalgamations and said they used assumptions from previously published reports.

“Further to yesterday’s court proceedings, KPMG strongly denies any issue of independence in its work for the NSW Government regarding council mergers,” a KPMG spokesman said.

“KPMG has been involved in council merger processes in NSW and other jurisdictions. As a result of our expertise in this area we were engaged by the NSW Government, through robust and competitive processes, to assist in a number of aspects related to the council amalgamation process.

“In December 2015 the merger impacts and analysis report (prepared by KPMG) concluded that there is likely to be a net financial benefit following a merger of the councils under consideration. 

“The analysis was prepared using assumptions, which were made publicly available, to estimate the potential financial impacts of the mergers proposed by government. KPMG had previously analysed merger options, predominantly based on options proposed through the Sansom review — the findings of this work were consistent with other independent findings including those of IPART.

The result means Willoughby Council’s potential amalgamation partners could be embroiled in a protracted legal challenge.

The barrister representing Mosman Council, Tim Robertson SC, said a central part of their case had always been establishing the “lack of independence of KPMG”.

“The public and the delegate were being misled by the State Government over the independence of KPMG,” Mr Robertson said in court.

Premier Mike Baird and Local Government Minister Paul Toole during the announcement that 19 new councils would be created throughout the state. Picture: AAP Image/Stefanie Menezes.

“The documents that they have could prove the engagement (of KPMG) was not independent.

“KPMG was intimately involved in the formulation of proposals and the report had been done in order to do the government’s bidding.”

State Government barrister Neil Williams, SC, described the notice to produce as an “abuse” of the court process and urged Justice Timothy Moore to throw out the notice.

“They do not have a forensically specific ground for issuing a notice to produce,” Mr Williams said in court.

Lawyers representing Mosman, North Sydney, Lane Cove, Hunters Hill and Strathfield councils, have requested to view documents which include contracts signed by the State Government with KPMG, proposals prepared by KPMG for the government and any notes relating to the KPMG report.

The State Government’s proposed three-way merger between North Sydney, Willoughby and Mosman councils. Supplied.
They also requested to view all files and notes presented to the Minister for Local Government as well as all cabinet files relating to KPMG and the mergers and all departmental briefing notes given or seen by the Minister.

Justice Moore agreed to accept the notice to produce but ruled the documents requested would be handed over to the court first.

The judge will then review the documents before deciding, in consultation with the respective legal teams, whether there is sufficient public interests grounds to justify withholding them from the council’s legal team.

Mr Williams said it could take a week or up to a month for the government to produce the notes.

The hearing in the NSW LEC continues.

What is the report?

■ The KPMG report, prepared at a cost of $400,000, has been used to support the Baird Government’s amalgamation agenda

Why do the councils want the documents?

■ They say the documents will show the report was compromised and the independence of KPMG would be called into question.

■ This would make the government’s justification for merging councils invalid.

Kind of makes you wonder about the veracity of the statement from M&M??

Senator STERLE: ...Mr Mrdak, it is not hypothetical. Would it be fair for me to assume that there is a massive conflict of interest in having an external provider of services to the department review where the department is resourced to deliver government priorities?

Mr Mrdak : No. The government established the functional efficiency reviews to be independent reviews. They certainly did do a very independent analysis of the department and the portfolio. I do not believe there is any conflict of interest in the fact that they are a provider of other services. We selected KPMG on the basis of a tender process. They provided a proposal, which we accepted and contracted, to undertake the efficiency review.

&..

Senator STERLE: We have talked a lot about the 'pub test' since Mrs Bishop's indiscretions. There is a government department engaging KPMG to the tune of $600,000. You stated that part of the review was 'functions ceasing', so this same mob, KPMG, who have the $600,000 to look for where efficiencies could be found in outsourcing, are actually a client of yours to whom you are outsourcing certain parts of the department's work to the tune of $1½ million dollars. It is a bit like banning live cattle exports—if we ask all the processors, of course they are going to want to ban live cattle exports. I find that very conflicted. Senator Heffernan, the chair, might think I am wrong.



CHAIR: No.


Senator STERLE: This is why ask. A number of mobs out there could do the work that KPMG do. If I was the one issuing the contracts, foremost in my mind would be, 'This could look a little stinky.'

Mr Mrdak : I can see the point you are making. Ultimately, at the end of the day, the department has the opportunity to respond to the report and government will make the final decisions, but I do understand the point you are making. As I said, it was a thoroughly independent review and there was no suggestion that the review's recommendations are in any way tailored to future work possibilities for KPMG, in my view.

Someone as efficient, astute & reportedly competent as Mike Mrdak and he wants us to believe he wasn't aware of the potential perception of 'conflict of interest' in his department's dealings and the 'independence' issues with the NSW government dealings with KPMG - yeah right 'BOLLOCKS'!
Bring on a Federal ICAC, preferably yesterday but ASAP...   
MTF...P2