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Responses provided by KPMG in relation to power mapping practices reflect a lack of cultural change since its exam cheating scandal, senators say.
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Consulting inquiry grills KPMG over cultural practices
13 February 2024
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The Senate Inquiry into consulting firms has raised significant concerns about KPMG’s cultural practices following responses provided by the firm concerning the use of power mapping practices.
KPMG CEO Andrew Yates previously denied claims from senators that he lied about making “power maps” identifying key decision makers in government to secure $40 million worth of taxpayer money, despite being shown evidence to the contrary in a hearing in September.
Mr Yates, who said KPMG did not engage in the controversial practice during an earlier hearing, was shown an internal company document with a colour-coded diagram of a government department’s senior organisational structure.
Following the hearing last year, Mr Yates was asked to review his answers and responses to questions on notice following the hearing. KPMG was also asked to provide other examples of other forms of mapping used by the firm.
In his opening address, Mr Yates said KPMG had been “too literal” in its approach to its response to the questions around the mapping of its relationships with public services clients.
“When we were first asked about power mapping in August 2023, we took too literal an approach to our response,” said Mr Yates told the inquiry on Friday.
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“It was never our intent to create uncertainty on this matter, and I apologise for that. Clients demand that we engage with them in an organised and coordinated manner and have a deep understanding of their business, and a map can help support these goals.”
Senator Barbara Pocock accused KPMG of attempting to mislead the Senate in its response and failing to provide the requested examples of power mapping practices.
“There are two things about this that really bother me. One is that you do this practice. The practice bothers me. You say to your young people who go out and have a coffee in the northern region around health infrastructure, 'Come back with a contract. Farm that relationship.' That's what that document does,” said Ms Pocock, addressing Mr Yates.
“However, the second thing is that you come here and you mislead the Senate and you convey a set of values to the KPMG workforce—thousands of people who are watching you today and want you to be a leader who actually does right. They all know about farming, because they ring me up and tell me about it. They tell me their lives are miserable because they are set goals. It's in their KPIs that they have to raise money, and that is done through that kind of relationship farming.”
Senator Deborah O’Neill said the interaction between KPMG and the Senate around the power mapping issue revealed the “same culture of trickery and deception” continued to exist within the firm from when the exam cheating scandal occurred in the firm three years ago.
KPMG discovered in early 2020 that 1,312 of its partners and staff had either shared or received answers during mandatory internal online training tests for topics such as professional independence, auditing, and accounting.
As a result of its investigations, KPMG moved to dock the pay of 16 partners and 30 staff, while the remaining 1,083 staff members received verbal or written warnings.
Ms O’Neill said despite the implementation of KPMG’s cultural change program and appointment of a chief purpose officer, Mr Yates had failed to model ethical behaviour in his responses to the Senate.
“You've indicated that you've put in a chief purpose officer, and in your opening statement you have called on people in your organisation to speak up. But I would put it to you that modelling down is the loudest voice in your organisation and is the one that determines who gets paid what,” she stated.
“What's been modelled down in this entire interaction with us around power mapping reveals the same culture of trickery, deception and not telling the truth. I don't know how much you've spent on culture change, but it looks like the culture remains one that is not transparent—even when it's this public.”
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