G4S to Repay U.K. Government $39 Million for Incorrect Tagging

G4S Plc (GFS) offered to repay 24.1 million pounds ($38.8 million) that the security and guarding provider incorrectly charged the U.K. government for electronically tagging prisoners starting in 2005.

An independent review conducted by law firm Linklaters LLP found that G4S’s U.K. care and justice services division “wrongly considered itself to be contractually entitled to bill for monitoring services when equipment had not been fitted or after it had been removed,” G4S said in a statement.

The U.K. Serious Fraud Office has opened a criminal investigation into Crawley, England-based G4S and Serco Group Plc (SRP), another U.K. service provider, over the allegations. The National Audit Office said in a statement today that a forensic audit of the contracts by PricewaterhouseCoopers LLP had found that potential overcharging by both providers may amount to tens of millions of pounds.

“The way in which this contract was managed was not consistent with our values or our approach to dealing with customers,” G4S Chief Executive Officer Ashley Almanza said in the statement. “Simply put, it was unacceptable and we have apologized to the Ministry of Justice.”

G4S said it believed the billing practice was confined to the electronic monitoring contract for England and Wales. The company said it has also incurred external investigation costs of around 2 million pounds.

The National Audit Office said it had found instances of G4S and Serco charging “months or years after electronic monitoring activity had ceased.” It said the department hasn’t agreed to any refund offers made by the providers.

Serco has said it will refund any amounts that it agrees represents overcharging, the National Audit Office said.

To contact the reporter on this story: Natasha Doff in London at ndoff@bloomberg.net

To contact the editor responsible for this story: David Risser at drisser@bloomberg.net

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