Australian Government Contract Reporting - Inquiry based on Auditor-General's report No.

19 (2017-18)
Submission 59

JCPAA
EY responses to questions on notice from the Inquiry into Australian
Government Contract Reporting

1. Could you provide a description, including case studies if possible, of what you consider good
public sector practice in ensuring knowledge is transferred from a consultancy to a
client organisation?

EY works in a highly collaborative way with our clients in the start-up, private, not-for-profit and
public sector. Our most successful knowledge transfer engagements in the public sector involve:

• Working in co-located integrated teams, developing or leveraging the frameworks and

procedures to maintain the practices co-developed during the engagement
• Proactively providing the agency with insights and industry knowledge
• Providing hands-on coaching and shadowing and the handover of tools and other artefacts.

Our staff work in the client’s offices and within integrated teams. Knowledge transfer occurs both
formally (through training, sharing methodologies and working styles) and informally through
interpersonal interactions. The effectiveness of knowledge transfer relies heavily on management
support from our clients and clearly defined handover points during, and following the completion
of, our consultancy work. We pride ourselves on the ability to do this well and this is confirmed
through client feedback gained from our post-engagement interviews as part of our quality
assurance process.

Sample case studies

Department of Social Services – National Disability Insurance Scheme

Through competitive processes EY was engaged by the Commonwealth to help establish the
National Disability Insurance Scheme. Our work included establishment of a project management
office and ongoing function including planning materials, risk registers, stakeholder engagement
databases, communications plans and frameworks and other core documentation and tools to
support co-design of the NDIS Policy, legislation, rules and reporting to the various stakeholders. EY
worked in an integrated team with Commonwealth staff. Because the NDIS was a greenfield scheme,
EY established the tools, processes and methods and trained staff through hands on coaching and
job shadowing until Commonwealth staff were able to perform the functions as part of their
business as usual.

Department of Defence – Defence Youth Safety Framework Phase 3

EY was engaged by the Department of Defence to establish and implement the Defence Youth Safety
Framework (DYSF) following the Royal Commission into Institutional Responses to Child Sexual
Abuse. Using EY’s extensive working knowledge of the recommendations from the Commission and
experience across change management, risk management, assurance and training, EY’s diverse team
has successfully provided the Department with the right foundations for cultural change; provided
extensive input into procedural guidance and risk management strategies; and the educational
resources required to create a safe and protective environment for young people.
Australian Government Contract Reporting - Inquiry based on Auditor-General's report No. 19 (2017-18)
Submission 59

Prime Minister & Cabinet – Office for Women operating model review

The Office for Women was facing significant operating challenges and needed to evolve to meet the
changing expectations of its key stakeholders. In response to this, the Office for Women
commissioned EY to undertake an independent review to identify opportunities to improve its
operations in order to enable the Office for Women to effectively deliver on the Government’s
strategic priorities. The Office for Women subsequently commissioned EY to assist with the
implementation of recommendations designed to help realise their target operating model. EY took
a co-development approach to designing the future state operating model and then developing the
work-streams required to help implement it. These work-streams were then led by Office for
Women staff, with coaching and support from the EY team who were based on site. The EY team
shared tools, templates and provided direction and guidance to the Office for Women staff to enable
each work-stream to deliver on time and to expectations to realise benefits. EY also facilitated a SES
Band 1 leader to provide the overall program management and coordination and supported
facilitation of regular collaboration sessions for all work-streams so joint problem solving and
knowledge sharing took place.

2. Is Government work more or less profitable than work for the private sector?

There is no material difference in the profitability of our Commonwealth government work

compared to our business as a whole.

3. Can you provide a list of all ABNs you have used in undertaking Government work?

ABN Legal Entity name

35 122 885 465 EY Business Solutions Pty Ltd

12 003 794 296 Ernst & Young ABC Pty Ltd

59 160 755 055 Ernst & Young Australia Operations Pty Limited

64 007 086 348 EY Identity Pty Ltd

75 288 172 749 Ernst & Young (Partnership)

87 003 599 844 Ernst & Young Transaction Advisory Services Ltd

67 457 905 811 EY Services Trust

87 003 599 844 ERNST & YOUNG TRANSACTION ADVISORY SERVICES LIMITED

6. Do you support the government’s proposal to require a statement of tax compliance for any
tenders over $4 million? It was part of the government’s announcement on the Black Economy
Taskforce.

We will abide by any terms and reporting requirements set as a condition of contracting with the
federal government.

7. Would you be able to provide an estimate of tax payment paid in Australia, on your firm’s
annual profit over the last five years?
Australian Government Contract Reporting - Inquiry based on Auditor-General's report No. 19 (2017-18)
Submission 59

EY’s client revenue in Australia is derived by the EY partnership. Under Australian tax law, a
partnership is not a taxable entity in its own right. Profits are distributed to partners who then pay
income tax.

8. Would you support a proposal to require the filing of full financial statements with ASIC for any
entity receiving over $10 million a year in government funds?

We will abide by any terms and reporting requirements set as a condition of contracting with the
federal government.

10. Could you provide a list of projects undertaken for the Commonwealth showing the initial
contract value of each project and the final value, including variations, of each project?

EY systems do not allow us to track the information requested in a manner to allow us to respond to
the Committees’ request.

Depending on the circumstances surrounding contract extensions or variations, or renewed work

following a competitive process or machinery of government change, new engagements may or may
not be created.

11. Could you provide details of your firm’s staff growth in Canberra over the last ten years?

We have been able to access data for the last 7 years. For the period from July 2011 to July 2018, our
Canberra headcount has grown from 125 to 310, while our national headcount has increased from
5003 to 7462.

12. How many of your staff are currently deployed to Commonwealth agencies? Additionally how
many of your staff have IT logons or security passes for Commonwealth agencies?

Currently there are 349 staff spread across the country deployed on Commonwealth engagements,
not all in a full-time capacity.

EY does not track the number of IT logons or security passes for Commonwealth agencies.

13. Nationally, how many of your current partners are ex-SES officers or ex-senior military
officers?

EY currently has 6 partners who are ex Commonwealth-SES officers or ex-senior military officers.

15. Do the CEOs of the ‘big four’ accounting/consulting firms (Deloitte, EY, KPMG, PwC) catch up
regularly? If so, how often, where, who is present, and is the chartered accountants association
present?

Our CEO has attended events on a limited number of occasions with his counterparts from PwC,
KPMG and Deloitte in the past three years.

Four of these meetings were hosted by ASIC, with the Chairman and Commissioner of ASIC in
attendance, and the agenda agreed with the Chairman and Commissioner of ASIC.

The purpose of these meetings is to discuss a range of issues relevant to the professional services
industry.
Australian Government Contract Reporting - Inquiry based on Auditor-General's report No. 19 (2017-18)
Submission 59

17. Could you provide a copy of the document you use an independently set ethical framework for
your accounting?

By way of background, EY and each of its partners are members of Chartered Accountants in
Australia and New Zealand. Members practising in Australia or abroad must comply with APES 110
Code of Ethics for Professional Accountants (Code) issued by the Accounting Professional and Ethical
Standards Board (APESB). The Code is based on the Code of Ethics for Professional Accountants
issued by the International Ethics Standards Board for Accountants (IESBA) of the International
Federation of Accountants (IFAC).

http://www.apesb.org.au/uploads/standards/apesb_standards/20092017153656_Compiled_APES_
110_Sept17.pdf