The NSW and Victorian governments are scrutinising their multimillion-dollar relationships with KPMG, after the consulting giant last week confirmed confidential client data had been shared, throwing the company into turmoil.
The NSW government on Wednesday demanded assurance from KPMG that people under investigation as part of a whistleblower scandal are not working on multimillion-dollar government contracts, while Victoria this week said it was reviewing contracts with the firm.
The growing pressure from governments came as another senior executive stepped aside from their duties at the embattled firm.
In a letter seen by this masthead, NSW Treasury secretary Michael Coutts-Trotter has told KPMG to reveal “as a matter of priority” what the firm will do to address issues revealed by its “ethical lapses”, and provide a list of active contracts it has with all NSW government agencies, irrespective of the procurement arrangement.
The NSW government has also sought written confirmation from KPMG that none its personnel under internal or external investigation are currently working on any NSW government engagements – and that all information obtained by KPMG while providing internal audit or other services for NSW government agencies has been appropriately managed.
Tender documents reveal the NSW government has current contracts with KPMG entities worth more than $70 million. Those contracts, with a range of state government departments, are mostly due to expire between later this month and October 2029.
A Victorian government spokesperson said the issues at KPMG were “a serious matter” and the government would review its contracts with the firm.
“We are considering our next steps to ensure government information has not been inappropriately used,” they said. “We will also review all contracts with KPMG.”
Data collected by the Victorian Auditor-General’s Office shows KPMG was the state government’s biggest consultancy vendor between 2017-18 and 2022-23. Over that period, it awarded KPMG $150 million worth of work.
KPMG has come under fire after the company confirmed confidential client data had been shared and potentially used to win new business with other clients, following explosive claims from a whistleblower. The scandal first came to light in March when Labor senator Deborah O’Neill revealed the whistleblower allegations in parliament.
On Friday, KPMG Australia boss Andrew Yates and senior partner Julian McPherson abruptly resigned after the company confirmed confidential client data had been shared and potentially used to win new business with other clients.
In an email to staff on Wednesday, KPMG’s acting chief executive Stan Stavros said that Eileen Hoggett, who led KPMG’s audit business at the time of the alleged confidential client data breach, had stepped down from her executive role at the embattled firm while an investigation into the scandal continues.
She remains an employee of the firm.
In a media statement, NSW Finance Minister Courtney Houssos said the concerns raised about KPMG’s work practices are being taken seriously and that the information provided by the firm would inform any further action the government may take.
In 2023, following at tax scandal at KPMG rival PwC, Houssos announced the firm would be suspended for an interim period of three months from obtaining new tax engagements with the NSW government. It was also required to attest that no staff member who had breached confidentiality or misused information as part of work for the Commonwealth Treasury would be involved in any NSW government work.
In an interview with ABC Radio National Breakfast, Finance Minister Katy Gallagher said the government was “deeply concerned” about the allegations made about KPMG. “I’ve had several meetings with the department of finance over this and they have met with KPMG as well,” she said. “We are absolutely firm on making sure suppliers with government have the highest ethical standards. If they don’t, we will respond to that.”
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Millie Muroi is the economics writer at The Sydney Morning Herald and The Age. She was formerly an economics correspondent based in Canberra’s Press Gallery and the banking writer based in Sydney.Connect via X or email.
Colin Kruger is a senior business reporter for the Sydney Morning Herald and The Age.Connect via email.