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BEHIND THE ASIC EXPENSES CASES

The auditor-general discovered over-payments in relation to the Australian Securities and Investments Commission chair and deputy chair when it looked at the corporate regulator’s financial statements.

DEPUTY CHAIR DANIEL CRENNAN

* In 2018-19 and 2019-20, regular accommodation payments of $750 per week were made by ASIC on Daniel Crennan’s behalf when the deputy chair was asked to relocate from Melbourne to Sydney.

* The rules allow for such payments to be made where an office holder has a “principal place of residence in a locality other than the office locality” but Mr Crennan did not meet this requirement.

* In August 2019, the auditor-general asked that ASIC seek advice from the remuneration tribunal on the payments, but as of late September 2020 this had not occurred.

* The payments came to around $70,000 and Mr Crennan has agreed to pay them back.

CHAIR JAMES SHIPTON

* Before US-based James Shipton was appointed chair, ASIC talked to Treasury about relocation expense package options. These options included estimates for an initial tax briefing ($3000) and annual tax return submissions ($5000) for the successful applicant.

* ASIC approved KPMG to provide taxation services at a cost of $4050.

* KPMG provided an initial tax briefing to Mr Shipton in December 2017.

* Then, KPMG asked for approval to prepare 2017 and 2018 tax returns for Mr Shipton. This was approved by ASIC with no cost estimate submitted.

* Mr Shipton was advised by KPMG in September 2018 that the fee would be $60,000-$70,000 and that ASIC had agreed to pay $9500 of this. In October 2018 ASIC advised it would pay the lot.

* The final invoices in August 2019 totalled $118,557. ASIC also ended up paying fringe benefits tax of $78,266 in relation to the benefits.

WHAT’S IN QUESTION

* KPMG invoices described the work as encompassing “tax advice on personal investments”, “optimisation of the Australian taxation of foreign exchange gain or loss in foreign bank accounts” and “assistance in respect of resolution of Massachusetts State tax notices and penalties due to late filing of 2017 Massachusetts state tax return”.

* According to the auditor-general, ASIC never confirmed in writing the type of services KPMG was to provide and did not seek advice from the remuneration tribunal on the additional benefits for Shipton.

* The auditor-general has asked ASIC to review how it approves all pay and benefits for executive office holders.

* Treasurer Josh Frydenberg has also asked for an independent review to be completed by the end of the year.

* Labor wants to know why action was not taken earlier, given the treasurer’s office was informed of the issue on September 15.