Wednesday, 25 November 2015

Infamous Spreadsheet Mistakes: why HR should think twice about using spreadsheets for staff holiday planning

The majority of SME's of between 100-500 staff that we speak to still use spreadsheets for managing things like expenses and staff holiday planning.

Everyone makes mistakes.  Spreadsheets are known to be fallible to human error - so for every one of  us who has made a mistake on the UK's most popular tool for staff holiday planning, (myself included!) here's a few famous blunders through the years:

London Olympics 2012:

The London 2012 organising committee made a decidedly unsynchronised error in its
ticketing process – leading to four synchronised swimming sessions being oversold by 10,000 tickets.

A member of staff had made a single keystroke mistake and entered ‘20,000’ into a spreadsheet
rather than the correct figure of 10,000 remaining tickets.

Fidelity’s Magellan fund:

An accountant omitted a tiny minus sign when entering a net capital loss of $1.3 billion onto a spreadsheet, meaning it got incorrectly treated it as a net capital gain….

The result - the dividend estimate spreadsheet was off by a mere $2.6 billion...

…..Unhappy shareholders did not receive their expected dividends.

The King’s Fund 

This well respected organisation was forced to apologise to the Welsh government after their Chief Economist John Appleby, in an article for the British Medical Journal, argued that the health service budget in Wales faced cuts of up to 11 per cent over three years, which was widely reported by the media.  

Appleby later issued a correction: 

“Unfortunately, a spreadsheet error which was only noticed after publication 
 exaggerated the real change in Wales’ NHS spending.  The correct figure is -8.3% by 2013/14 
(compared with 2010/11) and not -10.7%.”


One Kodak employee nearly got the bonus of his life, when someone made an error on a
Spreadsheet that calculated severance pay.

Kodak spokesman Gerard Meuchner said the hefty $11 million severance error was traced to a
faulty spreadsheet. "There were too many zeros added to the employee's accrued severance.
Thankfully it was an accrual. "There was never a payment," he said.

Lies, damned lies and spreadsheet errors

Reinhart and Rogoff’s paper, “Growth in a Time of Debt” was one of the world’s
most quoted research statistics – until students at the University of Massachusetts
tried to replicate the results.

The students discovered an error whereby Reinhart & Rogoff’s spreadsheet formula was
averaging the wrong columns…

Meaning economists worldwide were publishing flawed statistics… including…

Chancellor George Osborne 

The Chancellor used formulas based on the the aforementioned findings of  Rogoff and Reinhart to calculate his budget cuts.

This meant that a debt-to-GDP ratio of 90% saw growth of -0.1%, instead of 2.2%!

The Guardian described these flawed results as ‘embarrassing’.

Flintshire County Council

Flintshire Chronicle reported in 2010 that Flintshire County Council had over-allocated 
money to the county’s 12 high schools, creating a £1m loss

Results of the internal investigation were not published, but the Chronicle reported that
the mix-up occurred because someone ‘put money in the wrong column’ – and no one spotted 
it before the money was handed out…

Councillor David Wisinger, a governor at John Summers High School, commented: 
“If someone working for a public company had lost £1m they’d be sacked.”
When the town monster is a spreadsheet…

Town of Framingham

This US town overbudgeted by $1.5 million and had to use $600,000 in unexpected state aid to help fill that gap.

Chief Financial Officer Mary Ellen Kelley said a figure went missing as staff managed 
"monstrous spreadsheets."

Kelley said "I hate when we make mistakes. People are human and they do make mistakes, 
but I hate it."

Denbighshire County Council 

A clanger was discovered by Denbighshire County Council staff just before its annual audit, 
resulting in the council having to issue revised accounts.  A spreadsheet error had made a £21m (3.5 per cent) reduction in the assets shown on the council's balance sheet, because the spreadsheet had double counted some assets.  

Isn't it reassuring to know that many local authorities, who report some of the highest absence rates in the UK still manage staff absence data via spreadsheets…

The Good News

Spreadsheets are are by their very nature prone to human error, however when it comes to managing absence, they are also inefficient and not terribly cost effective.

For staff holiday planning, our cloud based alternative will eliminate errors and save time and money - it will also manage absence and any other types of leave too!

To find out more, contact us on 01656 750858 or visit our website

Sources: The Guardian
Flintshire Chronicle

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