G4S (LON:GFS) is to pay back more than £24mln to the government after an independent review confirmed it had overcharged on an electronic tag contract for eight years.
The embattled security services group said there was no evidence of dishonesty or criminal conduct, but G4S's subsidiary had mistakenly believed it could invoice when tags had not been fitted or had already been removed.
The company has apologised to the Ministry of Justice and issued credit notes worth £23.3mln for the period between 2005 and May this year and a further £0.8mln for May until now.
The company conceded this may not be the end of the matter, however, as it also being investigated by the Serious Fraud Office and said the credit notes may not match with that enquiry's findings.
All of G4S’s other contracts with the government are also under review by the Cabinet Office and Ministry of Justice, but no evidence had been produced yet that the overcharging on the tags contract had been applied to any of these.
Law firm Linklaters carried out the internal review, while the credit notes were issued against outstanding sums on the contracts and are covered by a provision in the interim results. In addition, the company said it had incurred £2mln of external investigation costs.
The tagging scandal comes at the end of a tumultuous period for G4S, which included a high profile failure on the Olympic security contract, when it failed to hire and train enough staff in time.
Ashley Almanza, G4S group chief executive said: "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 and restoring the trust which has been earned by our many thousands of committed and hard-working employees over many years.
“The way in which this contract was managed was not consistent with our values or our approach to dealing with customers. Simply put, it was unacceptable and we have apologised to the Ministry of Justice. As part of a wider programme of corporate renewal, we have changed the leadership of our UK business and we are putting in place enhanced risk management and contract controls.
“We remain committed to working with the Ministry and the UK Government to resolve this matter and to provide enhanced oversight of service delivery and contract performance."
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