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September 21, 2023

The South Dakota Retirement System Has Dumped KPMG

So far, KPMG has not been posting passive aggressive status updates on Facebook in revenge:

The trustees for the South Dakota Retirement System have replaced its auditor, who is being sued by the Securities and Exchange Commission for the way he handled TierOne Bank's audits.

The system's trustees chose the Eide Bailly firm, which has an office in Sioux Falls, after conducting interviews and a lengthy closed-door discussion.

KPMG, the international firm, had held the external auditing contract for the past 12 years.  KPMG partner John Aesoph was the lead representative on the SDRS account. He and senior manager Darren Bennett were formally accused in January of wrongdoing in civil complaints by the Securities and Exchange Commission regarding the collapse of TierOne Bank.

Now, it is worth noting that trustees for the SD Retirement System did not specifically mention the SEC allegations when breaking up with KPMG, so we aren't sure if that's what inspired them to end their 12 year relationship with the firm.

The SDRS trustees and administrators didn’t make any public mention of the SEC allegations. Aesoph was part of a three-person team that delivered the firm’s presentation. 

Michele Stromp, who appeared at the meeting of trustees, would have been replacing Aesoph as the lead representative if KPMG won the SDRS account again.

The SDRS has paid KPMG $117,320 thus far this fiscal year. They received $110,000 last year and $107,500 the previous year.

Congrats on the new gig, Eide Bailly!

Our previous coverage of TierOne and KPMG's related SEC trouble:

KPMG Resigns as TierOne Bank Auditor

(UPDATE) Friendly Reminder to TierOne Bank: Today Is the Last Day to Get Your Act Together

SEC Charges Two KPMG Auditors with Something We're All Accustomed to Auditors Doing

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