Nelson Mandela Bay Municipality has decided to cut ties with KPMG South Africa following the recent ethical scandal surrounding the auditing firm.
Last month, KPMG’s top eight executives, including chief executive Trevor Hoole, resigned following a storm created by work the firm did for the South African Revenue Service and the Gupta family.
The mayoral member for Municipal Public Accounts, Councillor Lance Grootboom, said the decision to phase out the current contract was taken at a council sitting on Thursday.
According to the municipality KPMG currently manages the Metro's ethics hotline, and audit and risk plan.
"The coalition government wants to ensure that those companies with whom the Metro has existing contracts are beyond reproach," Grootboom said.
"KPMG currently manages the City's audit plan, and will need to hand this over to internal resources within the next 3 months," he added.
Grootboom said Corporate Services, along with the Internal Audit Directorate, in conjunction with KPMG, will draft an exit strategy document with detailed handover processes and time-frames.
He said the Municipal Public Accounts Committee (MPAC) will conduct an oversight function to ensure the exit strategy is developed within the said time-frames so that Internal Audit is properly capacitated.
"The coalition government is serious about rolling out an audit and risk plan that is robust and reliable and that will minimize all fiscal and financial risks that could compromise our cities finances," Grootboom concluded.
