Another big four consultancy firm has confirmed it misused government information last year, widening a scandal that has engulfed global giant PwC.
Deloitte disclosed the breach as part of an ongoing Senate inquiry, but has so far refused to provide any more details about the incident due to client confidentiality.
The firm has also detailed how it was dumped by the Home Affairs department after it failed to disclose a conflict of interest. A similar breach was also identified while working with the Australian National Audit Office (ANAO).
PwC’s misuse of confidential tax policy information has triggered a reputation crisis, multiple sackings and parliamentary inquiries, referrals to police and the new National Anti-Corruption Commission, and the divestment of its government services division for just $1.
Deloitte declined to comment when contacted by Guardian Australia about the misuse of government information, but told the Senate inquiry it takes its obligations seriously.
“Any matters in relation to the misuse of confidential government information would be investigated in line with our normal processes,” said Deloitte’s response to questions from the committee.
“Consequences would vary depending on the findings of our internal investigations and, as with any misconduct, these consequences include disciplinary actions in accordance with our policies, which apply to both partners and employees.”
Greens senator Barbara Pocock said the disclosure confirmed the “misuse of government information by consultants goes beyond the PwC tax scandal”.
“It has always been a central concern of mine that what we are seeing is just the tip of the iceberg.”
Dr Andy Schmulow, an associate professor of law at the University of Wollongong, said the disclosures highlighted industry-wide structural issues needed to be addressed.
“I have absolutely no doubt that this is not contained to PwC,” Schmulow said. “What this demonstrates is that the system itself is so dysfunctional … that it is no longer possible, even in theory, to uphold the public good.”
Deloitte also confirmed the misuse of confidential or proprietary information on nine additional occasions last financial year, down from 18 a year earlier. Details of these instances were not provided to the Senate and may lead to further investigations.
Deloitte did provide details on two conflict of interest breaches involving government contracts.
Last year, Deloitte was contracted by the ANAO to audit a government agency’s environment, social and governance data. At the same time, Deloitte was engaged by that same agency to audit its financial statements.
“It was identified in August 2022 that Deloitte had not sought pre-approval from the ANAO to provide the service, as required under their independence and conflicts management policies,” Deloitte’s response to the Senate said.
Deloitte also referred to the Home Affairs department terminating a contract after an investigation found “an organisational conflict of interest that was not disclosed to the department when it was engaged”.
According to an ANAO report published last month, Deloitte was advising the department on IT procurement. At the same time, a Deloitte partner was seconded to a company bidding for work with the department.
“At the time of its engagement … Deloitte had an actual conflict of interest and the failure to declare this interest was a breach of the probity plan,” the ANAO report said.
Deloitte told the Senate it was “not aware of any other significant conflict of interest matters relating to government work”.
Deloitte also declined to provide the Senate with details on how its partnership is structured. PwC supplied a copy of its partnership agreement, but requested it not be shared beyond committee members.
“The partnership agreement between the partners of Deloitte is a confidential and commercially sensitive document,” Deloitte’s response said.
“It contains sensitive information that could potentially present a commercial advantage to our competitors and prejudice our partnership.”
Earlier this week, PwC admitted to another serious conflict of interest breach but has clarified that it did not involve the misuse of government information.
