Business
KPMG Faces Three-Month Federal Contract Freeze Amid NACC Referral
Reserve Bank of Australia (RBA) holds at 4.35% after three consecutive rate hikes. The move follows a significant easing of economic growth, waning consumer spending and unemployment rising to a four-year high at 4.5%. Although several economists think rates have already reached a peak, others predict another rise in the latter half of this year amid continued inflation worries.
Key Highlights
- KPMG has been suspended from bidding on new Commonwealth government contracts for three months
- The freeze will last until September 30 as part of the independent review.
- The Greens have also referred KPMG to the National Anti-Corruption Commission (NACC).
- The government says they are "extremely concerned" about accusations of confidential client information and treatment of whistleblowers.
KPMG is under further pressure after agreeing to cease bidding for new Commonwealth government contracts for three months as an independent review investigates claims about confidential client information and the treatment of a whistleblower.
The move coincided with the Greens referring consultancy and accounting firms to the National Anti-Corruption Commission (NACC) on top of mounting pressure on the firm ahead of a parliamentary hearing later this week.
Review of Government Orders and Freeze on Contracts
Finance Minister Katy Gallagher said the government was "very concerned" with claims KPMG had abused privileged information about clients and care of whistleblowers. KPMG has responded to a request from the Department of Finance not to bid for any new Commonwealth work until September 30, pending an independent review.
An investigation will be held into their assessment against Commonwealth contracts and, in the meantime, they are ceasing to tender for work, Gallagher told.
The review will look at whether KPMG failed to meet the standards required of suppliers working for the government, and if taxpayers were charged for work which did not meet that standard.
KPMG referred to National Anti-Corruption Commission by the Greens
The Greens formally referred KPMG to the NACC over allegations involving a whistleblower disclosure in 2024. The claims were made public in March under parliamentary privilege by Labour senator Deborah O'Neill.
O'Neill says KPMG allegedly used secret information from construction company Lendlease to assist in conducting pitches for audit work with other major companies.
Greens finance spokesman Barbara Pocock slammed the government response, saying a three-month moratorium on new contracts didn't go far enough. The government had entered into $24 million in contracts with KPMG since the allegations emerged, she said, and the freeze amounts to no more than a slap on the wrist.
KPMG Contracts Continue Ahead of Parliamentary Hearing
Although KPMG committed not to pursue new government work, the pause does not apply to existing Commonwealth contracts held by the firm. It has 297 federal government contracts worth $653 million as of now.
Senator Pocock also said the government did not appear to have learned lessons from the scandal involving two accounting firms leaking confidential tax information, and he called for greater regulation, transparency and whistleblower protections.
Friday sees more than 30 witnesses expected to testify in a joint Canberra Committees hearing The chair of KPMG Martin Sheppard, interim chief executive Stan Stavros and recent arrivals such as former chief executive Andrew Yates, former chief operating officer Eileen Hoggett and former New South Wales premier Mike Baird are also due to be cross-examined.
Source: ABC News