One department handed KPMG more than $22 million in variations or extensions to existing contracts in the three months after the firm agreed to stop bidding for new federal government work, AusTender documents have revealed.
Department of Defence staff signed off on at least four multimillion-dollar contract variations or extensions for "management support services" with KPMG between the ban's June 16 start date and mid-September.
One of these contracts, originally signed in for $5 million in 2022, has since ballooned to $35.6 million over eight variations, including one signed off on August 6, while another received a $4.1 million increase on July 1.
KPMG was rocked by allegations in March, made under parliamentary privilege, that staff in its audit division had misused confidential client data to win work from big corporates.
While investigations continue, the fallout from the scandal has seen a host of senior staff at KPMG resign, and led to the firm losing major audit clients such as Lendlease and Macquarie.
The ban on new KPMG contracts, announced in a policy note by the Department of Finance and later confirmed by Finance Minister Katy Gallagher, did not stop APS staff from extending or varying existing contracts with the firm.
However, the Department of Finance also launched an independent review of KPMG's governance, culture, ethics and integrity frameworks in June, and APS procurement rules state that "entities should only extent a contract where necessary".
Independent senator David Pocock, who has advocated for more transparency and better value for money in defence contracting, said restrictions put on KPMG work were a conservative response to revelations that the firm put its commercial interests ahead of the public interest.
"By continuing to tip millions of dollars into existing KPMG contracts, defence appears to be brazenly defying the consulting ban put in place in the wake of the consulting scandal," Senator Pocock said.
"Some of these contracts have been varied more times than the extension options originally specified."
One of the Department of Defence's contracts with KPMG, now worth $35.6 million, was signed off with two extension options in 2022, but had since undergone eight amendments, extensions or variations.
"It's hard to see how so many contract variations above and beyond what was originally specified could be warranted," Senator Pocock said.
"A ban that can be worked around this easily isn't a ban.
"The government should enforce a genuine ban that captures any non-essential variations and extensions."
The Department of Defence progressed the relevant procurements in accordance with government procurement policy, according to a staffer who was not authorised to comment publicly.
"The procurement process was conducted prior to the mutual agreement made between the Department of Finance and KPMG Australia on 16 June 2026," they said.
Earlier in September, the Department of Finance announced it would extend the ban on new KPMG work to October 31,while it awaited the outcome of the independent review.
A Department of Finance spokesperson said the arrangements, as set out in the procurement policy note, allowed for the variation or extension of contracts by the relevant Australian government entity.
"Under changes brought into effect from 1 July this year, significant contract variations to existing contracts require senior oversight, which would include (as part of varying the contract) consideration of ethical performance issues," the spokesperson said.
"The procurement policy note recognises that there may be legitimate reasons that entities need to continue to contract with KPMG and reminds entities they should continue to be mindful of the requirements to consider relevant experience and performance history, including ethical performance, when assessing value for money in all procurements, and the need to monitor the ethical behaviour of suppliers throughout the term of any contract."
Spokespeople for the Department of Defence and KPMG declined to respond to questions.
