G4S referred to Serious Fraud Office again

19th Dec 2013 13:39

The government has again referred security group G4S to the Serious Fraud Office after a review of outsourcing contracts due to suspected over-charging.As well as several issues identified in a cross-government report into contracts between G4S and rival Serco, a Ministry of Justice audit of G4S contracts uncovered problems with two further contracts held by the company for facilities management (FM) in the courts."Specifically, the audit revealed serious issues relating to invoicing, delivery and performance reporting against both contracts," a statement from the MoJ said. "While at this stage the department does not have evidence to confirm that dishonesty has taken place, they have today following legal advice referred both matters to the Serious Fraud Office in order to establish whether this is the case."G4S stated that information available to its management indicated that any financial exposure on the court FM contracts "is not expected to be material to the group" and that it did not expect anything to arise from the police investigation. A statement from the company said: "The MoJ has advised G4S that the Ministry does not have any evidence of dishonesty in relation to these contracts. Furthermore, G4S has no evidence of such conduct. The cross government review found no evidence of deliberate acts or omissions by G4S in relation to charging and billing arrangements on its major contracts."While the review found no evidence by either Serco or G4S of "deliberate acts or omissions" that led to errors or irregularities in the charging and billing arrangements, it did find there were "deficiencies in key controls being applied to the invoice and payment processes and there is therefore a risk that over-charging may have occurred", although it acknowledged that this was unlikely to be of material consequence. The government has since given the prisoner tagging work to another rival, Capita, on an interim basis while the issues have been investigated.Shares in G4S were down 2.3% to 247.p and Serco's up by 4.95% 471p at 14:15 on Thursday.OH