The Claim
“Removed 3 out of 4 recommendations from a report investigating a blank-cheque payment to a private consultant which was made without even verifying that the service was delivered.”
Original Sources Provided
✅ FACTUAL VERIFICATION
The core facts of this claim are substantially accurate [1][2].
What happened:
In October 2020, the Australian National Audit Office (ANAO) discovered that ASIC had made payments totalling $118,557 to KPMG for personal tax advice for then-ASIC chairman James Shipton, and $69,621 for relocation expenses for deputy chairman Daniel Crennan [1][2]. These payments exceeded legal limits set by the Remuneration Tribunal and were not properly approved [2].
Auditor-General Grant Hehir issued an extraordinary "Section 26" letter to Treasurer Josh Frydenberg on October 22, 2020, detailing four specific concerns about the Shipton payments [1][2]. According to legal experts, this was the first time in Australian history that such a letter had been issued under Section 26(1)(a) of the Auditor-General Act 1997 [1].
Frydenberg commissioned Dr Vivienne Thom to conduct a review of the ANAO's findings [1]. Thom completed her report on December 17, 2020, and provided it to Treasury [1].
On January 29, 2021, Frydenberg released a document titled "Abridged ASIC Governance Report – prepared by Treasury" [1][2]. This was not Thom's original report, but a heavily edited version prepared by Treasury itself [1].
The deletions:
The released version removed Thom's responses to three of the four concerns raised by the Auditor-General [1][2]. The three deleted findings concerned:
- KPMG being given an "effective blank cheque" without costings or limits on services [1]
- KPMG being approved to provide services almost a year before proper approvals were obtained [1]
- No documentary evidence that ASIC confirmed the services were actually delivered before paying KPMG [1]
The only finding retained related to whether splitting the payment was done to avoid delegation thresholds, which Thom concluded was not the case [1].
Frydenberg simultaneously announced that Thom had "made no adverse findings" against Shipton and that he was "satisfied that there have been no instances of misconduct" [1][2]. However, the released version of the report contained evidence contradicting these claims, as the ANAO stated that less than $2,000 of the $118,557 was legal [1].
Both Shipton and Crennan repaid the money shortly after [2].
Missing Context
The claim's framing issues:
The claim uses the word "recommendations" when the deleted items were actually "findings" or "responses" to the Auditor-General's concerns [1]. While technically imprecise, this doesn't change the substance of what occurred.
The "blank-cheque" characterization is accurate:
The Auditor-General's concerns explicitly state that KPMG "did not contain any cost estimates or other indications of costs to be incurred. This was approved by the ASIC without costings or limits on the services to be provided" [1]. The ANAO also noted that approval was given before proper procedures were followed [1].
The "without verifying service was delivered" point is accurate:
The ANAO explicitly stated they were "unable to obtain any documentary evidence that a confirmation of the services provided occurred prior to payment by ASIC" [1]. ASIC claimed discussions were held but provided no written evidence [1].
Importantly, this was neither a routine government process nor standard practice:
The process was irregular in multiple ways:
- A private contractor (KPMG) was used as an internal audit firm for ASIC while also providing personal services to the ASIC chairman [1]
- The procurement approval process was not followed correctly [1]
- The Auditor-General felt compelled to issue an extremely rare Section 26 letter, indicating extraordinary concern [1]
Source Credibility Assessment
Original source - Independent Australia:
Independent Australia is a Labor-aligned advocacy publication with explicit left-wing political positioning [3]. The article by Anthony Klan, an investigative journalist, drew heavily on reporting from The Klaxon, another independent news outlet [1].
The Klaxon credibility:
The Klaxon is an independent news organization that conducted extensive original research into this matter [2]. Their reporting was corroborated by:
- Official government documents (the Abridged ASIC Governance Report released by Treasury) [1]
- ANAO statements and official audit findings [1]
- Mainstream media reporting (ABC, AFR, SMH) [1]
Cross-verification:
The facts reported by Independent Australia were substantially verified by:
- ABC News coverage [2]
- The actual released government document (Frydenberg's "Abridged ASIC Governance Report") [1]
- Official parliamentary discussions [1]
The Independent Australia article, while politically aligned, accurately reported documented facts about the deletions and the underlying ASIC scandal.
Labor Comparison
Search conducted: "Labor government consultant payments auditor general investigation similar scandal"
Finding: No direct Labor equivalent found with the same characteristics during the period researched.
However, important context:
This is not a partisan issue - The scandal involved structural problems with ASIC's governance and procurement processes, not partisan ideology. No Labor government during the same period had equivalent corporate regulator scandals with similar characteristics [1][2].
Government consultant payment controversies are not unique to Coalition - All governments have faced scrutiny over consultant spending. However, the specific combination of factors here (blank-cheque procurement, lack of verification, deletion of audit findings, rare Section 26 letter) appears distinctive to this incident [1].
The real issue: Response to audit findings - The more significant question is not whether a government receives criticism, but how it responds to Auditor-General findings. The deletion of findings from a review commissioned specifically to address an Auditor-General's concerns represents an unusual response to official audit scrutiny [1][2].
Balanced Perspective
The problems with the deletions:
The deletion of three of four Auditor-General concerns from a publicly released report raises serious questions about transparency and accountability [1][2]:
- Selective disclosure - The government released an edited version of a review without clearly marking what was removed, making it appear complete [1]
- Misleading public statement - Frydenberg's claim that Thom found "no adverse findings" contradicted what remained in the released document [1]
- Obstruction of accountability - By removing the findings without explanation, the government obscured the full scope of the ANAO's concerns [1]
Potential justifications (not provided by government):
- The government did not provide an explanation for the deletions
- Treasury cited "commercial confidentiality" regarding KPMG's involvement, though KPMG was a private contractor to ASIC, not a government agency [1]
- The front of the document stated it was "prepared for public release so as not to disclose personal or commercial information or legal advice," yet information was deleted without visible redaction marks [1]
The larger governance failure:
This was not primarily a Coalition partisan issue, but a failure of ASIC governance:
- ASIC leadership (Shipton) approved payments that benefited himself [1]
- Proper procurement procedures were not followed [1]
- Services were not properly verified before payment [1]
- These systemic failures were only discovered through ANAO audit processes [1]
Shipton's accountability:
- Shipton stood down from his position (though not before the scandal broke) [1]
- Both Shipton and Crennan repaid the money [2]
- However, neither faced formal disciplinary action or legal consequences [1]
The deletion decision:
The most controversial element is not the original ASIC payments (which were wrong and addressed through repayment), but the decision to delete three of four Auditor-General concerns from the publicly released review [1][2]. The government has never provided a detailed justification for these deletions, and the Albanese government subsequently refused to release the unedited version, citing that it was "a matter for the previous government" [2].
TRUE
8.0
out of 10
The claim that Frydenberg "removed 3 out of 4 recommendations from a report investigating a blank-cheque payment to a private consultant which was made without even verifying that the service was delivered" is factually accurate in substance [1][2].
However:
- The deleted items were "findings" or "responses" not "recommendations" (technical distinction)
- The underlying ASIC payments were wrong and were repaid
- The more serious issue is the government's response to an Auditor-General's concerns through selective disclosure rather than the original payments themselves
- The deletions were made without public explanation or visible redaction marks, obscuring what was removed
The claim accurately identifies a significant accountability issue: a government editing a review of its own agencies' misconduct and removing findings without explanation. This does warrant serious concern about transparency and response to official audit scrutiny.
Final Score
8.0
OUT OF 10
TRUE
The claim that Frydenberg "removed 3 out of 4 recommendations from a report investigating a blank-cheque payment to a private consultant which was made without even verifying that the service was delivered" is factually accurate in substance [1][2].
However:
- The deleted items were "findings" or "responses" not "recommendations" (technical distinction)
- The underlying ASIC payments were wrong and were repaid
- The more serious issue is the government's response to an Auditor-General's concerns through selective disclosure rather than the original payments themselves
- The deletions were made without public explanation or visible redaction marks, obscuring what was removed
The claim accurately identifies a significant accountability issue: a government editing a review of its own agencies' misconduct and removing findings without explanation. This does warrant serious concern about transparency and response to official audit scrutiny.
Rating Scale Methodology
1-3: FALSE
Factually incorrect or malicious fabrication.
4-6: PARTIAL
Some truth but context is missing or skewed.
7-9: MOSTLY TRUE
Minor technicalities or phrasing issues.
10: ACCURATE
Perfectly verified and contextually fair.
Methodology: Ratings are determined through cross-referencing official government records, independent fact-checking organizations, and primary source documents.