26 Sep 2013

Serious Fraud Office to consider Serco tagging investgation

The government hands over material to the Serious Fraud Office (SFO) in relation to security giant Serco over allegations of serious mischarging for the electronic monitoring of offenders.

A SFO spokesperson said: “We can confirm we are considering the information provided by the MoJ [Ministry of Justice] on the G4S and Serco electronic monitoring contracts.

“We have no further comment at this time.”

In July, it emerged that Serco and G4S overcharged the government by tens of millions of pounds for electronically tagging criminals – including for monitoring dead offenders.

Forensic audit

G4S refused to co-operate with an audit and was referred to the SFO immediately, while Serco allowed a further forensic audit to take place.

After completing the additional audit, the Ministry of Justice has provided material to the SFO in relation to Serco’s conduct under the electronic monitoring contracts.

A statement from the Ministry of Justice said: “The SFO will consider whether an investigation is required into either or both suppliers.

“We are unable to provide further comment whilst the SFO considers this information.

“As in any other case, the decision as to whether an investigation is launched rests with the SFO.”

An audit by big four accountancy firm PricewaterhouseCoopers, launched in May, revealed that overcharging began at least as far back as the start of the current contracts in 2005 – but could have dated as far back as the previous contracts let in 1999.

Auditors discovered that the firms had charged the government for tagging offenders who were back in prison, had had their tags removed, had left the country or had never been tagged in the first place but had been returned to court.

Multiple reviews

A series of audits and reviews were triggered by allegations that both firms had overcharged the Government for electronic tagging contracts.

Read more: G4S accused of massive fraud over electronic tagging

In July Mr Grayling said neither G4S nor Serco would be awarded work until they had been given a clean bill of health. No decision is expected in the review being carried out within the Ministry of Justice (MoJ) until November.

In addition, the Cabinet Office is also in the process of reviewing 28 government contracts with the two companies, worth a total of a billion pounds: 9 with G4S and the remainder with Serco. There is also a third review being carried out by the National Audit Office.