Deloitte fined £6.5m for role in Serco tagging scandal
Big-Four auditor Deloitte was today fined £6.5m and “severely reprimanded” for its role in Serco’s electronic tag scandal.
The Financial Reporting Council fine was reduced to £4.2m after the auditor admitted misconduct in connection to the scandal
Serco yesterday agreed a deferred prosecution agreement with the Serious Fraud Office over three offences of fraud and two of false accounting between 2010 and 2013.
Read more: Serco fined £19m for government tagging contract fraud
Deloitte said its work in 2011 and 2012 was “below the professional standards expected of us.”
“We have a programme of continuous improvement for our audit quality processes, which have evolved significantly since these audits were performed,” a spokesperson said.
The FRC also slapped a partner at the auditor, Helen George, with a £150,000 fine, reduced to £97,500. George still works at the firm.
The SFO yesterday fined Serco £19.2m over the same case.
The fine was the result of a years-long investigation into how a subsidiary handled a government contract.
Serco has already compensated the Ministry of Justice for the scandal over its contract to electronically tag released prisoners.
Read more: Capita picks up government tagging contracts after Serco and G4S scandal
“Serco Geografix engaged in a concerted effort to lie to the Ministry of Justice in order to profit unlawfully at the expense of UK taxpayers,” said SFO director Lisa Osofsky.
Serco chief executive Rupert Soames, who joined after the scandal, said he is “mortified, embarrassed and angry”.