This was revealed by Gauteng Premier David Makhura, when he tabled his political report in the Gauteng provincial legislature on Thursday.
Makhura was adamant his decision was influenced by the latest revelations linking the auditing firm to the Guptas.
He said he had sought legal advice with the view to severing ties with the auditing firm.
KPMG has been doing business with the Gauteng government since 2013 and had been paid more than R4 million for providing various auditing services, such as the disbursement gambling tax rate review and financial modelling gambling tax rate.
Other services included the performance information audit for the entire provincial government, as well as internal auditing services.
The company also facilitated computer auditing services, as well as a probity audit, after the provincial government adopted an open tender system.
Since 2013, KPMG has billed the Gauteng government R6.2 million and has been paid just over R4 million for its services.
The Gauteng government was also in the process of reviewing its relationship with another Gupta-linked software company, Sap, which is also providing financial and ICT services to the provincial government. The Gauteng government is using the Sap system for its human resources unit to process leave applications and to pay service providers. The Department of Social Development, under MEC Nandi Mayathula-Khoza, used the Sap system to pay non-profit organisations and NGOs who are doing business with the department.
Yesterday, Makhura was adamant that this was putting an end to the Gupta “contagion” in his provincial government.
He said he has asked his newly-appointed Ethics and Anti-Corruption Advisory Council, led by former auditor-general Terence Nombembe and his team to probe the conduct of the two companies and advise him appropriately.
“This Ethics Advisory Council has already started working. I have already referred them to the KPMG issue so that they can advise on how the provincial government should deal with ethical questions facing companies that do business with government.
“The same will apply to McKinsey, Sap and others,” Makhura said.
He said the advisory body was going to help him and his executive council to clean up government departments and galvanise society against corruption in the public and private sectors in the province.
He, however, expressed satisfaction that his provincial government had experienced sustained improvement in this key area of governance.
“This year, the auditor-general (Kimi Makwetu) gave two-thirds of our departments and entities clean audits. This is a major achievement that outperforms all other years over the past decade-and-a-half,” he said.
Detailing his success, Makhura said the national Department of Monitoring and Evaluation’s Management Performance Assessment Tool (MPAT) has ranked Gauteng in second position, after the Western Cape.
He said this was a significant improvement from the rankings of fourth and fifth, achieved by previous administrations, prior to 2014.
“The main area of concern for me remains wasteful and irregular expenditure and delays in disciplinary processes and lack of criminal prosecution of those found guilty of corruption.
“This is a matter that is receiving attention,” he added.