The South African Revenue Service (SARS) spent more than R23 million on a KPMG investigation into an alleged “rogue unit” at the authority‚ and the report was issued with a disclaimer that it could not be used to settle any dispute or controversy.
Finance Minister Pravin Gordhan replied to a written question in Parliament by Economic Freedom Fighters (EFF) deputy president Floyd Shivambu‚ who had asked the minister how much the KPMG probe had cost the tax agency‚ whether an open tender process was used for appointment of the audit firm and what the terms of reference of the probe were.
The reply to the question was published in March‚ but has only become available.
The contentious KPMG report was among the issues that arose between SARS commissioner Tom Moyane and Gordhan‚ after it was leaked to the Sunday Times late last year.
Gordhan at the time questioned the audit firm’s findings‚ which said that while it could not find evidence that he was aware of the unit‚ as accounting officer‚ he “ought to have known” about it. Gordhan said KPMG had never interviewed him‚ nor had it asked him for his input in their investigation.
He was SARS commissioner when the investigation unit was set up‚ which Moyane now maintains was a “rogue unit”. A Hawks investigation is also under way into the unit.
Gordhan in the reply said the information he was providing in the written reply was from SARS and he had no way to verify it.
In the reply‚ he said SARS paid KPMG R23m to investigate allegations around the work of the unit.
SARS had commissioned KPMG to conduct a “forensic investigation” into the rogue unit based on allegations contained in a report from another SARS investigation headed by advocate Muzi Sikhakhane‚ to institute a more detailed investigation and to provide evidence of its findings‚ the reply said.
However‚ this is in stark contrast to a KPMG statement from January this year in which it said its investigation was simply a “documentary review”‚ which did not include interviewing people named in the report nor where they were given sight of the report.
The statement‚ signed by KPMG CEO Trevor Hoole‚ noted that the KPMG report into the unit referred to the “limitations” imposed on its assignment. Hoole said its mandate was to undertake a “documentary review” and that the report remained a draft until it was signed off by the client. SARS had said that it would publicly release the report but has not yet done so.
In response to the question about whether an open tender process was used to appoint the company‚ Gordhan said “an already existing panel was utilised for this purpose that was previously appointed through an open tender process”. This was in line with a Treasury guide for accounting officers.
SARS spends more than R23m on investigation of ‘rogue unit’ by KPMG
The South African Revenue Service (SARS) spent more than R23 million on a KPMG investigation into an alleged “rogue unit” at the authority‚ and the report was issued with a disclaimer that it could not be used to settle any dispute or controversy.
Finance Minister Pravin Gordhan replied to a written question in Parliament by Economic Freedom Fighters (EFF) deputy president Floyd Shivambu‚ who had asked the minister how much the KPMG probe had cost the tax agency‚ whether an open tender process was used for appointment of the audit firm and what the terms of reference of the probe were.
The reply to the question was published in March‚ but has only become available.
The contentious KPMG report was among the issues that arose between SARS commissioner Tom Moyane and Gordhan‚ after it was leaked to the Sunday Times late last year.
Gordhan at the time questioned the audit firm’s findings‚ which said that while it could not find evidence that he was aware of the unit‚ as accounting officer‚ he “ought to have known” about it. Gordhan said KPMG had never interviewed him‚ nor had it asked him for his input in their investigation.
He was SARS commissioner when the investigation unit was set up‚ which Moyane now maintains was a “rogue unit”. A Hawks investigation is also under way into the unit.
Gordhan in the reply said the information he was providing in the written reply was from SARS and he had no way to verify it.
In the reply‚ he said SARS paid KPMG R23m to investigate allegations around the work of the unit.
SARS had commissioned KPMG to conduct a “forensic investigation” into the rogue unit based on allegations contained in a report from another SARS investigation headed by advocate Muzi Sikhakhane‚ to institute a more detailed investigation and to provide evidence of its findings‚ the reply said.
However‚ this is in stark contrast to a KPMG statement from January this year in which it said its investigation was simply a “documentary review”‚ which did not include interviewing people named in the report nor where they were given sight of the report.
The statement‚ signed by KPMG CEO Trevor Hoole‚ noted that the KPMG report into the unit referred to the “limitations” imposed on its assignment. Hoole said its mandate was to undertake a “documentary review” and that the report remained a draft until it was signed off by the client. SARS had said that it would publicly release the report but has not yet done so.
In response to the question about whether an open tender process was used to appoint the company‚ Gordhan said “an already existing panel was utilised for this purpose that was previously appointed through an open tender process”. This was in line with a Treasury guide for accounting officers.
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