Serco fined £19m over tagging scandal

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Electronic tag (stock image).
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Outsourcing giant Serco has been fined £19.2m for fraud and false accounting over its electronic tagging service for the Ministry of Justice (MoJ).

The fine is part of a deferred prosecution deal with the Serious Fraud Office, which will end an investigation that began in 2013.

Serco had been understating how profitable the contract had been in its reporting to the MoJ.

Back in 2013 the company paid £70m in compensation to the government.

On top of the fine, Serco paid £3.7m in costs.

The firm said it was “mortified” its UK subsidiary Serco Geografix had overcharged to tag criminals.

“Serco apologised unreservedly at the time, and we do so again,” the firm’s chief executive Rupert Soames said.

He added that the management and culture of Serco “have changed beyond all recognition” since 2013.

Reform efforts

In 2013 Serco and fellow outsourcing group G4S faced allegations of charging the government for electronically monitoring people who were either dead, in jail, or had left the country.

Serco lost its contract to tag criminals in the UK in late 2013.

It said it has taken “significant steps” to try to reform, including strengthening its bidding, contract management, internal audit and management assurance processes.

No board members or senior executives that were in post at the time still work for the group.

The Financial Reporting Council also launched an investigation in June 2016 into Serco’s auditor, Deloitte, at the time of the offences.

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