CSC has been hit with a huge $190 million [£122 million] fine from the US Securities and Exchange Commission [SEC] following an investigation into the accounting practices that primarily concern a European unit that has ties to the NHS.
The probe into Computer Sciences Corp, which got underway in 2011, first looked at the company’s former managed-services division and was focused on the Nordic region before it eventually looked at its operations in Australia and the UK.
CSC’s own auditors had begun their own internal investigation by this stage that found anomalies in files related to operations in Australia and the contract with the NHS.
Most of this relates to a long battle with the NHS over exclusive rights it claimed to hold to be the sole provider of clinical IT systems in the North, Midlands and East of England – something that was removed in 2012. CSC has also written off some $1.5 billion [£966 million] of its NHS investment.
“As part of the restatement, the company will revise those assumptions based upon uncertainty with respect to a range of possible final outcomes under the NHS contract,” read the SEC filing, according to The Register.
The SEC filing states that CSC must restate its financial statements from 2010, 2011 and 2012 and it means that $130 million [£84 million] of operating profit must be removed from those fiscal years.
As a result, net income will be cut by $50 million [£32 million] for fiscal 2010 and $3.69 billion [£2.37 billion] for fiscal 2011, according to the SEC filing, although CSC revealed it will rise by $3.9 billion [£2.5 billion] for fiscal 2012.
CSC’s primary business involves running data centres for the US government and also owns a spinoff commercial business that takes care of consumer, financial, defence and health-care clients.