KPMG has been accused of overcharging the Defence Department by millions of dollars. 

Two whistleblowers have alleged that global consulting firm KPMG has repeatedly overcharged the Australian Department of Defence, submitting inflated invoices and billing for hours never worked. 

The accusations, brought to light in an ABC investigation, detail a pattern of overbilling and lack of scrutiny on awarded work. 

The relationship between KPMG and the Department of Defence has allowed KPMG to amass a reported $1.8 billion in contracts over the past decade.

The whistleblowers, one from within KPMG and another from the Defence Department, assert that the cosy relationship between the two entities enabled KPMG to exert significant influence over senior Defence staff, leading to contracts being awarded with minimal scrutiny. 

The allegations include claims that KPMG charged for work that was never executed and jobs that were unnecessary.

The controversy highlights broader concerns about the use of consulting firms in government operations, with critics asserting that excessive consultant involvement is not only wasting taxpayer money but also undermining accountability. 

This issue is not isolated to KPMG, as other major consulting firms like PwC, EY, and Deloitte have also faced similar allegations.

Labor Senator Deborah O'Neill, who has been running a parliamentary inquiry into the practices of these consulting firms, says the situation amounts to an “abuse of privilege and power”.

She said the consulting business model's focus on “billable hours”, encouraging firms to prolong their involvement, potentially reducing efficiency in project execution.

The new head of the National Anti-Corruption Commission, Paul Brereton, has indicated that consultants' activities will be closely scrutinised, expressing that these firms fall well within the purview of the commission's interests.

Both KPMG and the Department of Defence have denied the allegations, with KPMG asserting that invoices undergo rigorous checks before payment and stating that no evidence of improper billing has been found. 

More details are accessible here.