089) Which way around do you calculate a percentage change?
Making a political plus of math error, Star Tribune, 12 Apr 06
DFLer Rebecca Otto is accusing Auditor Pat Anderson, a Republican, of sloppy work. In a column reporting the percentage changes in unreserved fund balances from 2003 to 2004, instead of dividing the difference by the 2003 figure, the auditor's office divided it by the 2004 figure. Deputy Auditor Tony Sutton said "The researcher who worked on that report just made a mistake in the formula in the spreadsheet. He feels bad about it."
Risk: Giving political opponents an opportunity to comment adversely on the state auditor
Avoidance: Check not just the data but the formulas too.
088) Scoring an own goal
The Register (UK) OGC spreadsheet madness 10 Mar 06
The Office of Government Commerce is blaming a spreadsheet error for a foul-up over accrediting suppliers for its new Catalist procurement programme. In a letter to suppliers, they confessed "Unfortunately, [we are] not, as we had hoped, in a position to accept your tender at this time. This is because an error in the original evaluation spreadsheet has been identified, necessitating rescoring of all tenders for this project. this error has now been corrected and this has caused a small number of changes to the original award decision."
Risk: inaccurate choice of vendors for large government contracts, legal challenges, bad press
Budget discrepancies attributed to computer error Jan 6, 2006
Risk : delay in city budgeting process, embarrassment
Risk : loss of participation of citizens in the bidding process, uproar and bad publicity
Avoidance. training in spreadsheet operation and checking against source data before posting publicly
082) 'Thought he had skills' to fabricate data
Dud spreadsheet threatens case By Leonie Wood November 10, 2005 A MULTIMILLION-DOLLAR petrol price-fixing case being led by the Australian Competition and Consumer Commission in the Federal Court has been seriously jeopardised by admissions from it that one of its investigators made up some of the evidence. The ACCC is relying on a huge spreadsheet which lists petrol prices and times of price changes to corroborate oral evidence from witnesses, including some of the petrol station operators, that Geelong fuel retailers worked together to push up prices in 1999 and 2000. ACCC's chief investigator Jane Edwards admitted that "at the risk of fingering one of my staff members", one of the investigators had cut and pasted slabs of data into the spreadsheet. Ms Edwards at the time told the court that the investigator was "very enthusiastic and he thought he had skills that we weren't aware of that might be of use", so he hurdled the problem that the ACCC lacked information about price movements on some dates by duplicating data from other dates.
Risk : losing a lawsuit
Avoidance. user training and consistency checks
081) Lack of data quality control gives a negative snapshot
Kodak restates, adds $9 million to loss By Jim Jelter, MarketWatch Nov. 9, 2005
SAN FRANCISCO (MarketWatch) - The hefty $11 million severance error was traced to a faulty spreadsheet. Kodak spokesman Gerard Meuchner said "There were too many zeros added to the employee's accrued severance. But it was an accrual. There was never a payment," he said. Robert Brust, Kodak's chief financial officer, called it "an internal control deficiency that constitutes a material weakness that impacted the accounting for restructurings."
Risk: loss of share value, investor confidence, career damage
Avoidance: Data quality control
080) Black-on-black cell text format attempt to 'hide' data
Westpac was forced to halt trading on its shares and deliver its annual profit briefing a day early after it accidentally sent its results by email to research analysts. Details of the $2.818 billion record profit result for the 12 months to September 30, were embedded in a template of last year's results and were accessible with minor
manipulation of the spreadsheet. (Some reports indicated an employee had thought that a black cell background fill would hide black text.) Mr Chronican said "It is not just one error, it is a compounding of two or three errors. We will obviously be conducting a full inquiry to make sure it doesn't happen again."
Risk: public embarrassment, loss of investor confidence
Risk: public embarrassment, adverse press coverage
067) Numbers entered as text lose school Ј30,000 (US$50K) from budget
Excel spreadsheets in Budgeting; Accountingweb 5-Mar-2001
School governor Peter Wolstenholme explained how his school faced a Ј30,000 shortfall because values in a budget spreadsheet had not been added up correctly. With help from several of AccountingWEB's Excel gurus, he managed to identify the underlying problem was due to budget figures being entered as right-aligned text values rather than as numbers. The text figures were not included within the =Sum calculation and rippled through to the school's budget submission. Wolstenholme acknowleded that he often gets text values turning up in Excel spreadsheets when he extracts data from his accounting system using the ODBC mechanism.
Risk: Budget shortfall
Avoidance: As AccountingWEB member Paul Mitchell pointed out, "Perhaps the authority should look into its IT training practices"; Wolstenholme added, "The most obvious deficiency I could see was the lack of cross-checks"
066) There's bad news and good news; mainly bad: US$1.8M
CECO Environmental to Restate 2000 - 2003 Financial Statements February 8, 2005
CECO's in-house accounting staff has discovered an accounting error in the spreadsheet calculations used by the Company's construction division for its 'percentage of completion' accounting. The net effect will be a cumulative reduction in revenue of $1,969,000 over the four year period 2000 to 2003 with an equivalent charge to pre-tax net income. The error has a favorable effect in the current year, 2004, [it] will add approximately $180,000 to CECO's 2004 income before taxes for the nine months ended September 30, 2004.
Phillip DeZwirek, Chairman and CEO of CECO stated that, "Our in-house accounting staff discovered this miscalculation and immediately reported it to our independent auditors. As our business expands it is important to know that our Sarbanes-Oxley compliance preparation is working."
Risk: Loss of investor confidence
Avoidance: Spreadsheet review
SHIRLEY Dec 1, 2004 - $100,000 revenue shortfall
At its meeting Monday Nov. 29, the School Committee approved its current year $7.3 million budget after learning of a calculation error in the school budget that overestimated school revenue figures by $100,000. Business manager Patty Stern said additional money from grant sources and the $167,000 approved for the school at the special town meeting covers the error. During the budget review process, Stern said a calculation error was found on the spreadsheet that doubled revenue figures by $100,000.
Risk: Budget shortfall
Avoidance: Cross-check totals
061) Auditors say spreadsheet controls "not sufficient"
http://business.bostonherald.com/businessNews/view.bg?articleid=55580 Boston Herald Nov 25, 2004.
Avoidance: Enhance controls around spreadsheet use
060) Nov 15, 2004: On the day the Sarbanes-Oxley act comes into effect in the USA
CARRIZO Oil & Gas, Inc. Corrects Diluted Share Computations, Nov 15, 2004.
The company recently discovered an error in a spreadsheet which tracks the average number of warrants and options outstanding. This error impacted Carrizo's financial results. The corrected number of shares for the 2004 six month period was 20.8M rather than 18.9M as previously reported. The actual diluted net income per share was $0.19 rather than $0.21.
Risk: Loss of confidence
Avoidance: Spreadsheet review
We can expect more of this in the future because of Sarbox/SOX requirements that management report on its assessment of internal controls over financial reporting in the annual filing. As a CEO is reported as saying, "I don't look good in orange ".