South Africa: EFF Welcome Auditor-General South Africa Decision to Cancel Audit Contracts With KPMG

press release

The EFF welcome Auditor-General South Africa (AGSA) overdue decision to cancel audit contracts with KPMG as the we have called for the cancellation of all government contracts so many time. In September 2017, the EFF instructed all its caucuses in municipal council and provincial legislatures to table a motion for cancellation of all contracts with KPMG. The motion led to cancellation of many contracts with KPMG at municipalities and legislature level.

KPMG senior partners have been at the centre to legitimatize Gupta-led syndicate to loot state resources, including unacceptable conduct by their own admission when their obscene SARS report was clumsily withdrawn. The decision by the AGSA has been long overdue as more concrete evidence including the reports relating to the external audit of VBS Mutual Bank and improper conduct of KPMG continue to pile up.

We view the statement by AGSA to say the termination of the contracts with KPMG is not a judgement on the capabilities or integrity of the professionals that work at KPMG. There is prima facia evidence sufficient for criminal prosecution and their own admission of incompetent and unethical conduct. To suggest the termination is as a result of some imagined significant reputational risks is misleading and must be condemned. One of the reason why AGSA never raised any serious findings against state capture is because KPMG, like it is the case with many other audit firms, was appointed to audit its own client and possibly assisting Gupta-led syndicate to hide evidence.

We therefore call on AGSA to appoint an internal team to review all work, especially in critical infrastructure projects, and pursue civil case to recover any monies where there is concrete evidence that poor work was done. We further call on the AGSA to restructure its operation model to depend less on external auditors, and build strong internal capacity as audit services must be considered essential services if we are serious about rooting out corruption. In any case, the very same companies that are paid millions employ graduates to conduct these audits while paying them peanuts.

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