Australia’s Services Agency Considered Terminating KPMG Over Data-Handling Breach

Australia’s Services Agency considered terminating its contracts with KPMG after the accounting firm transferred sensitive government material outside its secure environment in breach of contractual requirements, documents reviewed by Reuters showed.

The incident occurred in late 2025 when a KPMG employee sent a draft audit report marked “OFFICIAL: Sensitive” from a KPMG email account instead of the designated Services Australia account. An agency official recommended seeking an explanation from the firm and assessing possible contract termination.

Services Australia’s national audit manager, Sally Bond, subsequently informed KPMG that the transfer of information outside the agency’s environment was explicitly prohibited under the contract.

Both KPMG and Services Australia told Reuters that the incident did not involve a data breach. However, the agency has not awarded KPMG any new audit work since the incident.

The development comes amid wider scrutiny of KPMG Australia over its handling of confidential private-sector client information. The firm had AUD 650 million in active Australian federal government contracts as of 2026.