The work of KPMG in the public service has been called into question, with members of the Standing Committee on Public Accounts (Scopa) suggesting that there is no need for the firm as the Auditor-General can do the work at a cheaper price.
Committee member Ms Vuyiswa Mente said the firm operated as if it was part of a syndicate that kept shifting money out of the country. “KPMG International will never be able to unearth the syndicate because you are a syndicate,” Ms Mente said.
“There is no need for KPMG in the public sector if the Auditor-General’s office is there. This is a private business and charges using a method of gaining profit. This is what happened with this particular contract of Sars (South African Revenue Service),” she said.
She said KPMG was profit-driven and hence it is easy to let people exit its employ without being held accountable.
Committee member Ms Nthabiseng Khunou concurred and said once auditing firms become intrusive in financial matters of the state, then the country will have a challenge.
“Auditing firms do jobs with government departments and entities not to help but to make sure that they can milk forever. This is a problem. South Africa has an Auditor-General and that office could be expanded. The private firms are doing a disservice. Handling finances is the most important function of government. It is important to beef up the Auditor-General’s office and make sure that they do what they are required to. We should not have companies like KPMG doing business as they please with government departments,” she said.
Members sought clarity on a host of issues involving KPMG’s Sars report and the work done for a list of Gupta-owned companies’ accounts. Questions were also raised about a R23m refund, the audit of a Free State dairy farm, the “fired employees”, whether the transgressions had been reported to law enforcements, and whether anyone had been made to account.
Committee member Mr David Maynier commented that he was simply not convinced by KPMG SA’s damage control efforts.
“Golden handshakes and internal investigations based on a few bad apples is not convincing. There is, or was, a systemic problem at KPMG. Until such time as the independent investigation is completed, the work done by KPMG is doubtful,” Mr Maynier said.
“Would it not be appropriate to act in the public interest and voluntarily withdraw all your bids in the public sector, place a moratorium and not bid until the independent inquiry is complete?” he asked.
Questions were raised on the retraction of parts of the Sars report, whether Sars has accepted the R23m refund, integrity of persons involved, KPMG’s senior management resignations, red flags in the Gupta account, and various other matters.
The Chairperson of the Committee, Mr Themba Godi, encouraged KPMG to cooperate with future investigations that would be done and concurred with the view that the firm must not tender for work in the public service whilst it cleanses itself.
“We need to know the time frames on the private investigation you are undertaking. The element around profit motive messes a lot of things up. Companies often go in to perpetuate themselves instead of seeking to help in solving problems,” he said.
By Sibongile Maputi
5 October 2017