Australian ban on new contracts with KPMG still leaves consulting firm with $38.5 million headroom

CANBERRA — The federal government has awarded KPMG A$38.5 million, even as the company is blocked from signing new contracts with the federal government after whistleblower allegations raised questions about its ethical soundness.

KPMG has reshuffled its Australian management, withdrawn from partners and announced nearly 390 job cuts as she grapples with the ongoing fallout from allegations that she misused her clients’ confidential information to secure a contract.

The Ministry of Finance in June asked agencies to stop awarding work to the company for appeals closed between June 16 and September 30 – then extended until October 31 – as a former senior civil servant Ian Watt examines corporate governance, culture, ethics and integrity frameworks.

KPMG agreed to comply and did not bid on new work, but the terms of the freeze still allowed six departments to send tens of millions of dollars to the firm – including through contracts finalized before it took effect and changes to existing agreements.