Australia’s universities are spending an estimated $1.8 billion annually on external consultants and contractors, yet the identities of these firms and the specifics of their work remain undisclosed. This lack of transparency has sparked significant concern over the use of public funds and the potential impact on the sector’s commitment to the public good.
Professor Corrine Cortese, a professor of accounting and associate dean at the University of Wollongong, conducted an analysis of the annual reports of 38 Australian universities for the Four Corners program. Her findings revealed the staggering figure of $1.8 billion in consultancy spending, which she described as shocking. “It did shock me, and it shocked my colleagues too,” she said. As she reviewed each report, she found it difficult to believe the total amount.
A year-long Senate inquiry into university governance has highlighted the increasing corporatisation of Australian universities and their growing reliance on external consultancy firms for professional services and advice. Labor senator Tony Sheldon, who initiated the inquiry, called the $1.8 billion figure “shockingly high.” He emphasized that this money comes from taxpayers and should be directed towards improving student services rather than opaque consultancy contracts.
Professor Cortese pointed out that the current accounting practices of universities make it challenging to determine how much of the funds go to individual contractors or large consultancy firms. “There’s no clear definition about what a consulting engagement is, and how it’s to be reported,” she said.
Federal Education Minister Jason Clare was also surprised by Professor Cortese’s findings. “It is shocking, but what is also shocking is that you can’t break it down,” he said. Clare stressed that the Australian people have a right to know who the consultants are, what they do, and the justification for their work.
Universities Australia CEO Luke Sheehy defended the use of consultants, stating that universities need expert advice on matters such as occupational health and safety and cybersecurity. “That’s the expertise we often draw on, and that is accounted for as consultants, and that’s an appropriate spend,” he said.
The Albanese government has pledged to implement new university governance principles that would require full disclosure of consultancy spending, its purpose, and value. However, the decision to spend millions on a consultancy firm has led to controversy at one of Australia’s top universities.
‘Cookie-cutter’ advice
When the University of Technology Sydney (UTS) sought to reduce debt and balance its budget in 2024, it opted to hire external consultants from KPMG instead of seeking advice from its own Business School. KPMG charged around $7 million for what UTS academics described as “cookie-cutter” advice on cost-saving measures.
After winning the contract, KPMG embedded itself within UTS, assessing which courses and academic programs generated revenue. At least 24 KPMG staff, including directors and partners, had access to UTS systems and attended staff meetings.
Brendan Lyon, a former KPMG partner turned whistleblower, described the standard operating procedure as getting into a client and making them think they cannot function without the consultants. He noted that the education sector was seen as a growth area for KPMG, with a focus on revenue generation.
UTS staff had to request information through freedom of information to access the KPMG report, which was highly redacted. Dr. Paul Brown, an associate professor at UTS, found the report lacking in rigor and depth. The report, which was about 200 pages long, resembled a PowerPoint presentation and suggested a “triangle-shaped” organisational structure, which Dr. Brown found unrealistic for a university focused on research and innovation.
KPMG declined to comment on the matter. At a NSW parliamentary inquiry, KPMG’s national education sector leader, Chris Matthews, stated that the firm’s work focused on financial sustainability, including academic performance and research income. He emphasized that decisions about staffing and organisational changes were ultimately for UTS leadership.
UTS eventually cut $85 million from its annual budget, slashing 143 courses, 839 subjects, and more than 120 academic staff. The university cited financial pressures, including the impact of COVID and government policies on international students, as justification for the cuts.
Consultants on councils
There is growing discontent among university staff about the presence of consultants in leadership and governance roles. Professor Cortese’s analysis of 14 university councils revealed that many included past and present consultants from major firms like Ernst & Young, PwC, KPMG, Deloitte, McKinsey, and Boston Consulting Group.
Senator Sheldon believes this is not a coincidence. “I believe that there’s an intended infiltration of our governing boards by consultancy firms,” he said. He accused consultancy firms of looking after each other and allowing costs to balloon across the sector.
One example of this trend involved John Dewar, who was appointed interim vice-chancellor of the University of Wollongong while still working as a partner with KordaMentha. Shortly after his appointment, KordaMentha was invited to submit a tender for a project to review the university’s operations, which they won for $3.8 million.
During his eight-month term, Dewar was given one day off a fortnight to work unpaid for KordaMentha. The university claimed it had a conflict management plan in place, but critics argue that this arrangement raises serious concerns about impartiality.
Flawed data
Concerns also exist about the quality of data used by consultancy firms when shaping the future of Australian universities. KordaMentha’s report on the University of Wollongong acknowledged that the workforce data it used was unreliable. Despite efforts to clean the data, the report noted that the accuracy of casual workforce data could not be verified.
Fiona Probyn-Rapsey, a former union delegate at the university, criticized the use of poor-quality data to justify job losses. “Poor quality data is not an obstacle for consultancy groups to come up with wholesale job losses,” she said.
Academics at UTS also found the data provided to KPMG to be flawed. Dr. Sarah Wise, a health workforce expert, was appalled by the data used to assess course viability. “We know that that data was fundamentally flawed,” she said. “We’ve seen the report that was used, and it was never corrected.”
Professor Probyn-Rapsey highlighted the frustration of academics whose futures depend on accurate data. “This kind of data is known as garbage in, garbage out,” she said. “The garbage out that consultancy groups are using is the garbage that we’re presented with to justify our job losses and the restructuring of our universities.”
Watch Four Corners’s full investigation into Australia’s universities tonight from 8:30 on ABC TV and ABC iview.
