LONDON — The British government said Thursday it was calling in fraud investigators after auditors found security giant G4S had overcharged by millions of pounds on contracts to monitor offenders using electronic tags.
Justice Secretary Chris Grayling said he was asking the Serious Fraud Office to "consider whether an investigation is appropriate into what happened" after G4S refused to take part in a forensic audit of its contract.
He said an initial audit by accountants PwC had found that G4S — which ran into trouble providing security for the London Olympics — and another firm, Serco, had charged the government for people they were not actually monitoring. In a small number of cases, offenders they were supposedly monitoring were dead.
Grayling said the overcharging was in the "low tens of millions," went at least as far back as the start of the current tagging contracts in 2005, and could have begun as long ago as 1999.
He said Serco had agreed to a forensic audit to determine whether dishonesty had been involved in the overcharging, but G4S had refused.
The detailed audit would include examining internal emails between company executives to determine what happened.
Grayling told lawmakers in the House of Commons he felt "astonishment that two of the government's biggest suppliers would seek to charge in this way."
"The billing practices in question were clearly unacceptable and the government will take all necessary steps to secure a refund for the taxpayer," he said.
