KPMG have several active contracts with Australian Public Service departments. Photo: KPMG.
KPMG continues to enjoy lucrative Commonwealth contracts across a range of APS agencies, despite its well-publicised integrity breaches and inquiries into its unethical behaviour.
Newly published biannual government data on consulting services shows the Big Four accounting firm has new contracts worth more than $2 million, and between January and July this year it held active contracts worth $51.4 million.
Ironically, one of its current contracts is with the Australian Public Service Commission to teach ethics and leadership to public service leaders.
KPMG also has contracts with Defence, Finance, Home Affairs, Services Australia and other departments.
The Federal Government placed a temporary ban on new KPMG contracts, but says it can do nothing about those jobs already in place due to procurement rules.
The accountancy giant was forced to admit during a parliamentary committee inquiry that it shared confidential information for the benefit of its clients and its own profits; breached ethical standards in pursuing audit contracts; and inappropriately handled internal whistleblower complaints.
It corruptly misused confidential information from Optus to try to win an external audit contract with Telstra, which it didn’t get. It then mistreated the employee who raised concerns over the behaviour.
Long-term KPMG partner John Sams was appointed chief executive officer this week, replacing Andrew Yates, who resigned over the scandal.
Several of KPMG’s most senior leaders were forced to vacate their jobs over the scandal, including its chairman and senior audit partners in addition to the former CEO.
The firm has also recently announced that a further seven staff and partners have been punished over the scandal.
Those penalties range from official warnings and delayed career progression to substantial fines.
The Greens are furious over the new data release and insist the Federal Government must “stop feeding the beast that is KPMG” and follow its own Commonwealth Supplier Code of Conduct to reform the consultancy sector.
Greens finance and public service spokesperson Barbara Pocock said the government was failing its own test in ignoring the code, because Labor was “hopelessly addicted” to KPMG.
“The sheer size of these contracts is further proof of Labor’s dependence on KPMG,” Senator Pocock said.
“The Department of Finance alone has three multimillion-dollar contracts worth over $25 million combined – the same department that is investigating KPMG for its unethical behaviour.
“As scandal engulfs KPMG and it appoints long-term insiders to fill the shoes of the disgraced leadership, Australians want to know why KPMG is keeping multimillion-dollar government contracts and has not been removed from bidding panels.
“Labor promised to learn the lessons of the PwC scandal, but its response to date is a disgrace and a failure. What is the message to cheats and liars?”
Senator Pocock said the giant consultancies have “lost their social licence” and the government must now review all contracts with KPMG and ban dodgy firms from taxpayer-funded work.
“It needs to properly regulate the Big Four, establish a consultant regulator and increase penalties for egregious behaviour and ethical failures,” she said.
The new data comes as the Australian Securities and Investments Commission has warned company auditors they must report illegal and suspected illegal behaviour from the Big Four – KPMG, PwC, Deloitte and EY.
ASIC Commissioner Kate O’Rourke has written to all registered company auditors (almost 3000) reminding them of their legal obligations to report breaches of the law.
The KPMG corruption scandal is the latest in a series of scandals involving the Big Four, the most recent notable case being PwC leaking confidential Treasury information for its own benefit.
Treasury engaged then-PwC partner Peter Collins to give advice on designing new tax laws in Australia aimed at closing any loopholes that could be exploited to prevent multinationals from paying their fair share of taxes in this country.
Collins subsequently violated confidentiality agreements by sharing that trusted information with at least 53 PwC partners, including the firm’s tax advisory arm, so they could develop strategies to help their international clients outsmart the new laws once they were introduced.
PwC helped its clients avoid paying the very taxes it was helping the Australian Government create.
Accountancy insiders have told Region that the sector considers KPMG’s corruption an even worse breach of ethics than that committed by PwC.
Original Article published by Chris Johnson on Region Canberra.
