IRD Corrects Figures on Consultancy Hours

  • Bill Birch
Revenue

Revenue Minister Sir William Birch said today that, as a result of his inquiries this morning, Inland Revenue had revised figures it supplied as part of the answer yesterday to a Parliamentary question by Mr Rodney Hide on KPMG consulting work.

"Mr Hide did not ask for hourly rates. He asked for hours and cost. That involved a large and complex exercise converting various forms of contracts into nominal hours.

"The advice to me from IRD, based on those calculations, showed that KPMG had done 900.5 nominal hours costing $618,832.50 during the last two years for the IRD Strategic Projects business unit.

"In answer to my inquiries today, the department has further advised this morning that those figures do not accurately reflect a conversion onto an hourly-rate basis of contracts employing the consultants at a daily rate.

"A thorough review this morning shows that the 900.5 hours in yesterday's answer, converted from daily contracts generally reflective of 10 hour working days into pure hours worked, gives a figure of 2741 hours.

"That gives an hourly rate of $226, instead of the $687 suggested by the original figures.

"Moreover, a figure of 76 hours shown in the answer for Corporates at $29,668 refers to a management course conducted in five locations for 73 staff. That figure, which suggests an hourly rate of $390, is in fact inclusive of all development, course materials for 73 people, and travel.

"Mr Hide should appreciate that contracts are frequently let on bases other than hourly rates. He cannot presume that he can make a simple minded conversion from cost and nominal hours into hourly rates.

"Nevertheless I am very concerned that the department got its figures wrong in the original conversion. I have asked the Commissioner for an urgent report explaining why the conversions from day-based contracts to hours were incorrectly reflected in the advice provided in answer to the Parliamentary question."