Statement re review of electronic monitoring contracts

Review of electronic monitoring contracts 11 July 2013 Serco Group plc (Serco), the international service company, notes today'sannouncements from the UK Ministry of Justice (MoJ) and the Cabinet Office.These reflect the initial findings of the independent audit of the electronicmonitoring contract originally let in 2005. The audit was commissioned by theMoJ on 17 May 2013. The initial findings of the audit have highlighted to the MoJ matters ofpotential concern in relation to billing practices. Serco has therefore agreedwith the MoJ that a detailed investigation into the contract should continuewith Serco's full cooperation. The MoJ has stated that the current estimate ofthe amounts involved are in the low tens of millions of pounds in total forboth companies since 2005. We have confirmed that we will repay any amountagreed to be due. Given this investigation, Serco has decided to withdraw from the re-tenderingprocess for the electronic monitoring service. The MoJ has reconfirmed thatSerco continues to be the single remaining bidder for the South Yorkshire groupof prisons. However, the award will be delayed and is dependent on the outcomeof MoJ's audit. We will cooperate fully with the MoJ on their audit of other contracts with theDepartment and with the Cabinet Office on their wider review across other UKgovernment contracts. The Justice Secretary, who said that Serco is one of theGovernment's biggest and most important suppliers, expressed his gratitude forSerco's cooperation. Christopher Hyman, Chief Executive of Serco Group plc, said: "Serco is abusiness led by our values and built on the strength of our reputation forintegrity. These values lie at the heart of the many thousands of our peoplewho are endeavouring to deliver the highest standard of service to ourcustomers around the world. We are deeply concerned if we fall short of thestandards expected of all of us. We are therefore taking this extremelyseriously and will continue to work closely with our customer to resolve theirconcerns in this matter. We will not tolerate poor practice and behaviour andwherever it is found we will put it right." Ends For further information please contact Serco: Stuart Ford, Head of Investor Relations T +44 (0) 1256 386 227 Marcus De Ville, Head of Media Relations T +44 (0) 1256 386 226 About Serco Serco is a FTSE 100 international service company, which combines commercialknow-how with a deep public service ethos. Around the world, we improve essential services by managing people, processes,technology and assets more effectively. We advise policy makers, designinnovative solutions, integrate systems and - most of all - deliver to thepublic. Serco supports governments, agencies and companies who seek a trusted partnerwith a solid track record of providing assured service excellence. Our peopleoffer operational, management and consulting expertise in the aviation, BPO,defence, education, environmental services, facilities management, health, homeaffairs, information and communications technology, knowledge services, localgovernment, science and nuclear, transport, welfare to work and the commercialsectors.

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