KPMG South Africa said on Friday that its identification and investigation of potential bursary fraud at the auditing and professional services firm was an integral part of the arrest of a former employee, Fidelis Moema.
Moema appeared in the Palm Ridge Commercial Crimes Court in Johannesburg last week.
KPMG South Africa chief executive Ignatius Sehoole said in a statement on Friday that Moema was dismissed as an employee of KPMG on November 11, 2022, following a disciplinary process related to non-compliance with firm policies. Subsequent to his dismissal, KPMG had identified potential fraud committed by Moema and initiated an internal forensic investigation.
It is rare in South Africa for companies to publicly identify and aid in the arrest of employees that have allegedly committed fraud, and most often, these cases lead to a resignation following a closed disciplinary process, with very little legal action thereafter for the alleged perpetrator.
“I stated recently KPMG takes a zero-tolerance approach to unethical behaviour and any person found to be involved in it will be dealt with. I remain firm in this endeavour and as a firm we continue to drive an agenda underpinned by ethics and accountability,” Sehoole said.
He said their investigation had uncovered fraudulent behaviour related to bursary funds and as a result, the firm reported the matter to the relevant law enforcement authorities in February 2023.
“We continue to work closely with the authorities to bring this matter to a close,” said Sehoole.
He said while KPMG had internal controls in place to mitigate such issues, the forensic investigation had identified needed improvements, and additional measures of control had been implemented.
With regards to the bursaries, all monies misappropriated was through an elaborate scheme of fictitious accounts, overriding of internal controls and collusion with external parties, he said.
“KPMG’s approved bursars have not been impacted, the firm has honoured all its commitments, and the bursary programme will continue to support students in enhancing the profession. The most disappointing aspect of this situation is the lost opportunity to assist additional students,” said Sehoole.
He said the South African fraud landscape was at an all-time high, a risk faced by all businesses, and like all businesses KPMG had to constantly reinvent and implement additional controls to adjust to the ever-changing, volatile fraud landscape.
Their forensic investigation identified collusion by Moema with external parties, but did not identify others within KPMG involved in the scheme.
“We have a team of highly-skilled, ethical and professional people working in our firm, and this is not affected as a result of this case,” said Sehoole.
He said they would continue to work with the law enforcement authorities to ensure the perpetrator was brought to book and held accountable for his actions.
BUSINESS REPORT