G4S issues £24.1m refund over electronic tagging overcharging

G4S has apologised to the Ministry of Justice (MoJ) and announced that it has issued credit notes worth £24.1 million over the electronic tagging controversy.

It made the announcement as the National Audit Office (NAO) published a report that concluded that the government is owed “tens of millions of pounds” by Serco and G4S, after it was overcharged on electronic monitoring contracts. However, the audit also revealed that the government doesn’t have its own data to prove where they have been overcharged.

“Our announcement today follows months of intensive work by an independent law firm and external accountants and is an important step in setting this matter straight,” said Ashley Almanza, G4S group chief executive.

G4S hired law firm Linklaters to perform an independent review into G4S’s role in the electronic tagging billing disputes in June 2013. It said that it had incurred external investigation costs of around £2 million.

“The review has confirmed that, in certain circumstances, G4SCJS 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.

The firm said that it believes the billing practice is confined to its electronic monitoring contract for England and Wales.

It has therefore issued the MoJ with credit notes of £23.3 million for incorrect billing between 2005 and May 2013, and a credit note of £0.8 million for billings from the period from June 2013 to date. These credit notes have been issued against outstanding sums on these contracts.

Linklaters also reviewed emails and conducted interviews with G4S employees and found there was no evidence of dishonesty or criminal conduct in relation to the billing arrangements, G4S said.

However, it acknowledged the dispute with the MoJ over the refund amount.

“The assessment of these matters and the credit notes may not agree with the Ministry’s audit findings,” G4S said.

“Once those findings are available, G4S will work with the Ministry to resolve any outstanding matters.”

Copyright © 2013 IDG Communications, Inc.

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