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Auditor-General should audit HIH bailout company.



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Kelvin Thomson - Auditor-General Should Audit HIH Bailout Company http://www.alp.org.au//media/0601/ktmshih270601.html Thursday, 28 June 2001

Auditor-General Should Audit HIH Bailout Company Kelvin Thomson - Shadow Assistant Treasurer

Media Statement - 27 June 2001

Labor's Shadow Assistant Treasurer, Kelvin Thomson, has criticised the Government's decision not to appoint the Auditor-General as the external auditor for HIH Claims Support Ltd.

HIH Claims Support Ltd (HCS) is the company the Government has set up to administer the $640 m taxpayer-funded bailout of collapsed insurer HIH.

"I have been advised that the Government's intention is to have Ernst and Young do the internal financial and operational audits and KPMG do the external audit and statutory account sign-off.

"The first concern with this is that KPMG is also the HIH liquidator, which may give rise to perceptions of conflict of interest. The question of the relationship between auditors and management is precisely one of the areas of public concern in the wake of the HIH collapse."

"Secondly, and more importantly, HCS is charged with distributing taxpayers money, and the Commonwealth Auditor-General is the right body to do the external audit."

"HCS has been set up as a subsidiary of the Insurance Council of Australia, and the Government may argue that because KPMG is the ICA's external auditor that it follows that they should do the HCS external audit."

"Labor does not agree. HCS books are going to be kept completely separate from those of the ICA, as they should be, so there is absolutely no need for the same auditor to be doing both jobs."

"An appropriate analogy is with the CSIRO, which is registered as a company but still audited by the Auditor-General because it spends taxpayers' dollars." Authorised by Geoff Walsh, 19 National Circuit, Barton ACT 2600.

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