The difference between a resignation and a lapsed membership of a professional body has resulted in a NSW parliamentary committee’s report on government procurement practices being amended more than a week after tabling.

Parliamentary committee members met this week to consider concerns from Professor Brendan Lyon, the former KPMG partner who exposed aspects of the advice the consultancy firm gave to the NSW government, that his circumstances had been misrepresented by the report.

Lyon’s evidence related to the case study of the Transport Asset Holding Entity (TAHE),which began operations in July 2020, and the problems he said he faced as a partner opposing a view from public servants that wanted the TAHE entity to be given the tick of approval by advisers.

KPMG was engaged to do work for Treasury and Transport relating to the TAHE’s creation, and those two NSW departments had different objectives.

There were conflicts of interest involved in the TAHE engagements and KPMG has said it had made mistakes in not properly managing these.

“The consulting service did not understand the lack of alignment between the interests of both government agencies,” the committee report says.

KPMG did not step back as required by the situation and ask the NSW government to resolve the issues.”

Lyon ended up leaving KPMG not long after the TAHE advice was completed following disputes with partners over the contents of advice and robust exchanges with key public servants on the engagement.

The committee secretariat sent Lyon a final copy of the report on its release date. He wrote a letter to the parliamentary committee on May 29 to complain about the characterisation of how his membership of the Chartered Accountants Australia and New Zealand (CAANZ) ended in the context of disciplinary investigations.

The committee said in the initial version of its report that Lyon resigned his membership and was able to rejoin to clear his name and rebuild his reputation.

Lyon told the committee the situation was very different.

“I did not resign from CAANZ,” Lyon said. “My membership lapsed after I was dismissed from the KPMG Australia partnership.

“My membership as an affiliate member was managed in all regards by KPMG Australia.”

He added that the report in its original form inferred that he resigned his membership to complicate or prohibit CAANZ from investigating KPMG Australia’s professional conduct.

He said it “infers that I was facing adverse allegations or findings over my ethical and professional misconduct of which CAANZ were similarly prohibited by my resignation”.

Lyon also noted that there was an inference that allegations and findings of an investigation were damaging enough to warrant rejoining CAANZ so that he could clear his name and rebuild his reputation.

“These sentences are factually incorrect and on their natural wording convey damaging and false inferences based on false matters of fact,” Lyon said.

“I have at all times provided honest testimony, supported by extensive documentary evidence and cooperated in full with the NSW Parliament.”

The committee agreed to change the report to correct the error.

“The case study ‘Transport Asset Holding Entity and KPMG’ stated: ‘The investigation into this matter has been limited as Mr Lyon has resigned from CAANZ’,” the erratum to the report says.

“This should read: ‘The investigation into this matter has been limited as Professor Lyon is no longer a member of CAANZ as his membership lapsed after he was no longer a partner of KPMG Australia following the finalisation of his advice on the Transport Asset Holding Entity of NSW’”.

The erratum links readers to Lyon’s May 29 correspondence and wraps up with a statement of regret.

“The committee regrets any distress this error has caused and acknowledges the role Professor Lyon has played in identifying the issues related to TAHE,” the erratum says