KPMG headquarters. Picture: ALON SKUY
KPMG headquarters. Picture: ALON SKUY

The executive council of the Gauteng provincial government will at its next meeting later in May receive a final report on an investigation into the administration’s ties with embattled auditors KPMG, among others.

Gauteng Premier David Makhura announced in December the provincial government would review its connections with KPMG and multinational software company SAP.

Makhura also referred to McKinsey, but later indicated that the provincial government had not done business with the US-based consultancy.

KPMG, McKinsey and SAP were accused of enabling state capture through their dealings with the Gupta family.

In October, Gauteng finance MEC Barbara Creecy said in a written reply in the legislature that the provincial government had entered into contracts worth R6.2m with KPMG in the 2013-14 financial year.

Of this amount, R4m had been paid to the auditors.

KPMG has been contracted for internal auditing services as well as for auditing tenders in Gauteng’s Open Tender system.

Departments in the various provincial governments use SAP’s operating systems.

Deepening woes

KPMG’s woes have deepened, with Barclays Absa Group announcing on Thursday its decision to cut ties with the firm. The auditor-general has already done so.

Makhura’s spokeswoman, Phumla Sekhonyane, said the premier had asked the provincial treasury to look into the matter. This entailed three aspects: investigations by KPMG and SAP of recent allegations; sanctions if anyone was found guilty; and risk mitigation.

Sekhonyane said that the provincial treasury had presented a preliminary report to the executive council, which is made up of provincial cabinet members, but that there was additional information the treasury was requested to look into.

Sekhonyane said she was not at liberty to divulge the details for the moment.

"At the next meeting of the executive council they will be tabling the final report on what they have found with regard to these three [issues].

"We will also seek advice from the ethics advisory council and we will make a decision based on that," she said.

The consultation would take place before the end of May.

Makhura said in December that he wanted the new ethics council, led by members of civil society, to advise on the matter.

The council is chaired by Terence Nombembe, the former auditor-general, who is to lead the investigation team in the state-capture judicial inquiry.