12 errors in working with spreadsheets, resulting in catastrophic losses
A ranking of the largest errors in working with spreadsheets has been compiled, because of which companies suffered huge losses. The list includes both financial institutions and private enterprises from various fields, as well as two educational institutions and one spy agency.
No one is safe from mistakes
A list of errors has been published in modern spreadsheets that caused the most damage to the organizations to which they belonged. According to Oracle, which compiled this rating, multimillion-dollar losses can cause one single mistake made in a multi-page document – even the absence of just one “minus” or an extra zero can lead to very serious consequences for both business and the “author “Errors.
Everyone can make a mistake in the preparation of the table, regardless of the version of the software in which the specialist works, and the scope of his company. The ranking of Oracle includes both financial institutions and educational institutions, and even an intelligence agency, one of the largest in the world.
Mistakes in the tables are made by enterprises directly related to finance. For example, the Fidelity fund, founded in 2008, had to cancel the distribution of annual dividends of $ 4.32 per share.
Incorrect calculations caused by just one erroneous change can lead to an avalanche of financial problems.
The source of the problem was the tax accountant, who simply did not put a “minus” in the table before the net loss of $ 1.3 billion. Because of this, the losses were recorded as profit, which led to a fictitious increase in dividends.
Barclays Capital. About the importance of removing redundant data
Illiterate editing of spreadsheets caused major losses for Barclays Capital (the amount is classified). The bank unintentionally acquired part of the assets of the bankrupt company Lehman Brothers, including 179 of its contracts.
This happened because in a spreadsheet containing information about unwanted contracts, some of the cells were hidden and not deleted. When converting a document to PDF, these cells became visible again.
Fannie Mae. Mistake Initially
An unpleasant case with the use of spreadsheets occurred in the American mortgage agency Fannie Mae. At the beginning of the XXI century, financial specialists of the company worked with a table containing an error, which led to a distortion of the final result by $ 1.136 billion. The error was reflected in the financial report of the company for the III quarter of 2003.
JP Morgan The Case of the London Whale
But the biggest mistake made by trader Bruno Ixil (Bruno Ixil), known as the “London Whale” and working for JP Morgan. In 2012, his activities cost the company $ 6.5 billion – he made a number of fatal errors due to unverified copying of a large number of cells and errors in equations for modeling risk.
MI5. How spies watched the wrong ones
There was a place on the Oracle list for British intelligence MI5, founded in 1909. In 2010, due to just one formatting error in the spreadsheet, the department specialists had to analyze conversations only for those numbers that ended in 000, instead of specific three digits.
How exactly such a mistake affected the work of intelligence is not reported, but probably MI5 experts spent time listening to completely different conversations that were required. It is possible that this entailed the loss, in addition to time, of more important information for the department.
Eastman Kodak. The importance of proper retirement calculations
Eastman Kodak, a well-known manufacturer of photographic equipment, twice published quarterly reports with erroneous information – in one it later made corrections for $ 2 million, and in the second – for $ 13. The reason was a mistake in the table in which the calculations of benefits and allowances for employees retiring were conducted. For two consecutive quarters, the company calculated the figure for only one employee.
Olympics and non-existent tickets
The organizers of world-wide events are not immune from the mistake. So, during the 2012 Olympic Games in London for synchronized swimming competitions, 20 thousand tickets were sold instead of 10 thousand, half of which turned out to be invalid – they belonged to places that were not on the platform.
The reason was that one of the employees of the London Olympic Committee entered “20 thousand” instead of “10 thousand” in the spreadsheet. As a result, the committee had to pay at its own expense the attendance at the main performances to all those who bought tickets for non-existent seats.
University of Toledo. Fewer students – less profit.
American University of Toledo found out how much it costs just one typo in a spreadsheet. The document, which recorded the number of applicants that directly influenced the profits of the university, made a minor mistake.