I would say it’s due to the fallen nature of Man
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I don’t recall Excel in the 1980s. It didn’t take over with me until the second half of the 1990s. Before then, I used various spreadsheets such as 1-2-3, Symphony, Quattro Pro, and SuperCalc. Visicalc was an Apple spreadsheet, but I never used it.
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Excel took off around v5 (1993). V5 coincided with Lotus failing to transition to Windows very well, and included VBA. Excel 95 (v7), which was 32-bit pretty much nailed the coffin in 1-2-3, if memory serves.
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I 100% agree with this, but…
Microsoft was making Windows and Excel, and 1-2-3 was not interfacing well with Windows. Was that Lotus’s fault or was that Microsoft making it impossible for a 3rd party software to work as seamless in Windows as Excel for marketing purposes? I always thought it was the latter: MS preventing 1-2-3 from working well. After all, what are monopolies for if not for driving competitors out of business (and yes, MS had a monopoly on operating systems)
I gave up on 1-2-3 not because it was a less capable calculation tool, but because it crashed all the effing time in my Win 3.1 world. (My STSC*APL install never crashed)
I kinda preferred the 1-2-3 macro forms over the more of a programming language that is VBA.
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Deloitte Web Travel screw-up with wrong numbers put into a spreadsheet
Again – it’s human error, not the spreadsheet’s fault
Deloitte made me do it: CEO throws auditor under the bus
A weekend call from the auditors sent the $1.7 billion Web Travel into a spin.
Nov 21, 2024 – 6.27pm
key excerpt:
It finally discovered the issue; Deloitte was using the wrong numbers.
Its auditors had copied and pasted the wrong cells to work out the adjustments – a simple (yet substantial) spreadsheet error.
article within
If there is one thing that is sacred with institutional investors, it is a company’s accounts. Investors do not have enough bandwidth to completely understand every ASX-listed company, its industry or various geographies, but they can analyse financial statements.
As soon as a company starts fiddling with historical numbers, changing its interpretation of long-held accounting standards or blueing with auditors, red flags are raised. When all that happens a few days before what should be a routine results release, investors question the foundations.
Web Travel has had a shocking week. The way Guscic tells it, he thought the company’s half-year numbers were as good as finalised last Friday when he sent his board the half-year accounts, investor presentation and even a draft results press release to mull over the weekend. His 28th result in charge of the company looked like plain sailing. Results day was scheduled for Wednesday this week.
He says that changed on Saturday when the company’s auditor Deloitte flagged a potential issue with Web Travel’s finance team.
Despite Deloitte having the same audit partner on the case for the third straight year and despite Web Travel hiring KPMG in London to separately look at this exact issue last year, Deloitte had access to Web Travel’s new accounting system and wanted Web Travel to rethink how it accounted for supplier liabilities including accruals for services rendered but not yet billed at the end of each month.
The impact? Apparently, tens of millions of dollars. Deloitte considered the technical accounting standards issue at a senior-level meeting on Sunday and confirmed it to Web Travel CFO Tony Ristevski on Sunday afternoon.
That’s when Web Travel freaked out.
Tens of millions of dollars was highly material for a company slated to record $113.9 million EBITDA this financial year. And four days out from results day, it was very late in proceedings to be notified of a potential switch in accounting standards. Such high-level issues are usually sorted in the lead-up, well before the trial balance is ruled off.
Strangely, it was also not flagged as a “key audit matter” in Deloitte’s audit opinion last year. Web Travel must’ve known it was a bit of a grey area – why else get that second opinion from KPMG in London? Did that make it worth a mention somewhere in the accounts?
Web Travel, confused but worried it had a bomb on its hands only days out from its first-half results, requested a trading halt on Monday.
Ristevski’s team ran around trying to understand both the accounting standards issue and the size of the potential adjustments to current and prior year earnings. They couldn’t work it out. They called around competitors to understand what their auditors made them do.
Web Travel MD John Guscic thought his half-year results were just about finalised on Friday last week. He was wrong. Arsineh Houspian
You can imagine the panic. Web Travel, having got back in touch with KPMG in London, agreed to switch accounting standards but couldn’t reconcile the size of the proposed adjustments.
It finally discovered the issue; Deloitte was using the wrong numbers.
Its auditors had copied and pasted the wrong cells to work out the adjustments – a simple (yet substantial) spreadsheet error.
The result was a bunch of small adjustments to current and prior year EBITDA, retained earnings and trade and other payables as announced on Wednesday night. Web Travel did its best to hose it down on an investor call on Thursday morning. The shares dropped 4.2 per cent when they resumed trading on Thursday.
We’ve only heard Guscic’s side of the story and the CEO was quick to throw Deloitte – a firm it paid $2.64 million last year for audit and tax services – under the bus. “We can’t comment on this one,” a Deloitte spokeswoman said on Thursday.
If it’s true, it’s an epic error from probably a junior auditor a couple of years into his or her career. Accounts payable isn’t the sexiest part of the audit; the juniors normally get cash, fixed assets and receivables and payables, while mid-level (still junior, really) auditors look at the P&L and the manager tackles key audit matters. Partners review the key balances only.
But the whole thing is incredibly untidy.
Web Travel can consider itself lucky if the worst that comes from it is four days of panic and a handful of immaterial adjustments. That it came only weeks after downgrading earnings (which caused the share price to tank 35 per cent) is worrying – remember investors don’t always understand their portfolio companies, but they like to think they understand their financials. An earnings downgrade into an accounting kerfuffle is two red flags in succession.
Investors will also be asking questions about Web Travel’s demerger of consumer arm Webjet, which now trades as a separately listed company with a $330 million market capitalisation.
If there is a kerfuffle like this inside the parent (the one with the established finance team, accounting systems, auditors etc), you can only imagine what is possible inside the spin-off. Can investors trust its numbers? The accounts there are also running two days late
.
In general, the spreadsheet didn’t screw up.
Usually, people made errors, often simple ones… and didn’t put in controls or check their work.
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Well, we will know in a month or two how many juniors KPMG have let go for this error.
Yup.
So why does Excel keep getting the blame?
I recall a coworker noting all the deficiencies of 123 vs Excel about that same time.
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It’s too easy for people to use.
Not sure that is a criterion to prevent people from MIS-using it.
New Zealand, wtf are you doing?
The body that runs New Zealand’s public health system uses a single Excel spreadsheet as the primary source of data to consolidate and manage its finances, which aren’t in great shape perhaps due to the sheet’s shortcomings.
The spreadsheet-using agency is Health New Zealand (HNZ) which was established in 2022 to replace 20 district health boards in the expectation it would be more cost-effective and deliver more consistent services. The org has a budget of $NZ28 billion ($16 billion) and advised lawmakers it would stay within it for FY 23.24.
That prediction was incorrect and HNZ blew its budget, leading to a review of its finances that last week delivered a damning report [PDF] that found the org lost “control of the critical levers that drive financial outcomes” and had an “inability to identify and respond to the disconnect between expenditure and revenue.”
Let’s look at this report:
https://www.tewhatuora.govt.nz/assets/Uploads/HNZ-Financial-Review-Report.pdf
From Deloitte, ok
page 42-43
Notably, one major issue was through a significant reliance on the use of an Excel file
to manage the consolidated financials of the organisation. This spreadsheet was the
primary data file used by HNZ to manage its financial performance. It consolidated
files from each district into a single spreadsheet, and key reports, such as the monthly
finance report, were produced from it. The use of an Excel spreadsheet file to track
and report financial performance for a $28bn expenditure organisation raises
significant concerns, particularly when other more appropriate systems are present
on the IT landscape.This Excel file is flawed in that:
• Financial information was often ‘hard-coded,’ making it difficult to trace to
the source or have updated data flow through.
• Errors such as incorrectly releasing accruals or double-up releases were not
picked up until following periods.
• Changes to prior periods and FTE errors in district financial reporting Excel
submissions, would not flow through to consolidated file.
• The spreadsheet can be easy to manipulate information as there is limited
tracking to source information where information is not flowing directly from
accounting systems.
• It is highly prone to human error, such as accidental typing of a number or
omission of a zero.
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…or don’t use Excel to do your fraud
More:
Emphasis added:
The Tricolor Auto case centres on a Dallas based subprime auto lender that grew rapidly by originating high interest car loans and financing them through warehouse lines and securitisations. According to US federal prosecutors the company collapsed in 2023 after lenders discovered that loan level data used to support borrowing and bond issuance was unreliable. An indictment unsealed in New York alleges that senior executives oversaw a multi year scheme to misrepresent the quality and performance of Tricolor’s loan book by altering borrower income figures delinquency data and other key metrics provided to investors and banks. Several former finance staff have pleaded guilty and are cooperating with authorities. Creditors are now owed close to one billion dollars and the company is in Chapter 7 liquidation.
What is striking about the allegations is not the use of exotic financial engineering or opaque models but the reliance on spreadsheets as the primary mechanism for preparing reporting data. Court filings and reporting suggest that Excel based files were used to aggregate transform and present loan information to counterparties and that numbers were manually adjusted but not always consistently. In other words the alleged fraud did not require defeating sophisticated systems but exploiting weak controls in business critical spreadsheets. https://lnkd.in/exd8Sz2XThis is precisely the failure mode EuSpRIG research has warned about for more than two decades. Empirical studies show that large spreadsheets are inherently error prone even without malicious intent Panko 2000 and that when spreadsheets are embedded in financial reporting and funding processes they create both error and fraud risk Panko and Ordway 2005. EuSpRIG work has repeatedly shown that spreadsheets often evolve into de facto systems without governance Croll 2009 lacking basic controls such as change review version management and independent testing Ferreira and Visser 2012. Where spreadsheets operate outside formal IT and audit frameworks management visibility is reduced but accountability is not Butler 2001. The Tricolor allegations illustrate the predictable outcome of treating spreadsheets as informal tools rather than controlled applications Grossman 2002 Baxter 2010.
Panko R R 2000
https://lnkd.in/eUTzfQMJ
https://lnkd.in/eWfz9Vib
Panko R R and Ordway N 2005
Fraud in Financial Reporting
https://lnkd.in/eJ4ytaCB
Croll G J 2009
https://lnkd.in/e3t_yn_c
Ferreira M A and Visser J 2012
https://lnkd.in/eGxhwjQt
Butler R J 2001
https://lnkd.in/eGxBx3rV
Grossman T A 2002
https://lnkd.in/eUykfBGn
Baxter R 2010
https://lnkd.in/etCKGyDp
https://www.cbc.ca/news/canada/british-columbia/bc-gas-royalty-budget-error-9.7328419
(I’m adding some emphasis)
B.C. energy ministry says 4 calculation mistakes led to $1.5B budget error
Most significant error involved currency conversion mistake that went undetected
The Ministry of Energy and Climate Solutions says the nearly $1.5-billion error in this year’s budget resulted from four different mistakes made while forecasting how much money the province will collect in natural gas royalties over the next five years.
That’s according to senior ministry staff who released a summary of the problems on Tuesday afternoon.
The mistake with the largest impact involved applying a U.S. dollar to Canadian conversion rate to figures that were already expressed in Canadian dollars.
“A formula was incorrectly dragged across cells,” said a ministry representative.
In another error, gas unit volumes were incorrectly converted, while in two other instances, staff used cost inputs from the year 2025 instead of 2026.
Last week, the premier’s office admitted that budget 2026 had overinflated projected gas royalties by an average of $292 million per year over the next five years.
According to senior ministry staff, the mistakes were made by “technical people inside the ministry,” and “new quality assurance and quality control measures have been implemented.”
“This was a human-caused and regrettable error made by a mistake on a spreadsheet,” said a spokesperson.
Summary
Experts with Treaty 8 First Nations first flagged the budget problem to Premier David Eby, Energy Minister Adrian Dix, and then-finance minister Brenda Bailey earlier this summer.
It wasn’t until Business in Vancouver broke the story last week that the government acknowledged the problem.
Treaty 8 First Nations are located in gas-rich northeastern B.C. and receive a portion of the royalties collected by the province.
A lawyer with a Treaty 8 First Nation said communicating with the province about the errors in the budget and their concerns around the gas royalty framework has been difficult.
“Our experts, we as advisers, the chiefs directly, have been asking for a full transparent technical review for weeks with absolute silence on their part,” said James Tate.
The government announced a $13.3-billion deficit for this fiscal year, a figure that is likely to rise once adjusted for the error. An updated fiscal outlook is expected later this month.
The ministry said the mistakes revealed Tuesday are not related to, and have no effect on, a new gas royalty framework being rolled out on Jan. 1, 2027, which aims to capture 50 per cent of industry profits for the public purse.
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A few more pieces on the $1.5 billion (in CAD I assume) error… oh, I’m sorry, $1.46B error
Summary
BC NDP says $1.5 billion error an exaggeration, as government admits it only missed by $1.46 billion
After a week of rounding the hole to $1.5 billion, energy and finance staff spent Tuesday walking reporters through four spreadsheet mistakes that official math now prices at $1.46 billion. Energy Minister Adrian Dix called it a serious human error.
PENTICTON — The Government of British Columbia spent Tuesday confirming Budget 2026 overstated forecasted natural gas royalties by $1.46 billion over five fiscal years, then asked the public to treat that as a tightening of last week’s $1.5-billion admission.
Veteran reporter Bob Mackin noted the unusual timing and the lack of visibility. Media received 44 minutes’ notice that Energy Minister Adrian Dix would address the accounting mishap, he posted, and the appearance was not livestreamed.
Dix, taking questions in Vancouver after a background technical briefing, called the largest miss “a serious mistake, but it was a human error.” He said staff assumed Canadian-dollar gas prices were in U.S. dollars and converted them again, “leading to an overstatement of revenue.”
Premier David Eby, a few hours before the briefing, said he was “not pleased by this situation.”
On August 25, the same premier told reporters he was “not familiar with any error in the budget related to oil and gas revenues.”
Senior staff from the energy and finance ministries told the briefing the errors had been independently verified. The quarterly fiscal report on September 14 will carry the corrections. Officials would not say Tuesday what that does to the deficit.
The largest mistake was a currency-conversion formula dragged incorrectly across a spreadsheet. Fixing it cut the 2026-27 forecast price by 44 cents per gigajoule. A unit-conversion error took another five cents. Two further mistakes, both from using 2025 cost data instead of this year’s figures, cut one cent from the plant-inlet price and added three cents to the outlet price.
Budget 2026 published plant-inlet prices — the value of unprocessed gas — ranging from $2.34 to $4.83 per gigajoule. Those figures are now treated as wrong.
The combined correction averages $292 million a year from this fiscal year through the year that starts in 2030. It peaks at $378 million in 2028-29. This year’s royalty line falls 24%, from $1.297 billion to $991 million, a $306-million cut.
A ministry representative described the work as “a formula … incorrectly dragged across cells” by “technical people inside the ministry.” Officials promised new quality-assurance steps and outside reviewers.
The $1.46-billion official total is the same number the Office of the Premier floated August 27, hours after Business in Vancouver published an investigation that put the miss nearer $500 million a year.
Simon Fraser University economist Nancy Olewiler, who co-authored the last independent review of the royalty system, called the government’s explanation incomplete and confusing and said $292 million a year sits at the low end.
West Moberly Chief Roland Willson has said Treaty 8 technical staff put the problem in front of Dix at a closed-door meeting in Fort St. John on June 29, and that four Treaty 8 First Nations handed Eby a letter on July 14. Willson says the premier never replied. Staff told Tuesday’s briefing the conversion errors themselves were uncovered in July.
A recording of the June 29 meeting, first reported by Business in Vancouver, captured Dix telling the nations the new royalty framework would yield $2.4 billion more over five years than the previous plan, and that the number came from Budget 2026.
A ministry official on Tuesday could not say how much of that $2.4 billion is now at risk. The ministry has separately said the $2.4 billion was “based on information available to the minister before the administrative error was identified.”
Cabinet still aims to bring the new framework into force on January 1, 2027, with a stated goal of returning 50% of profits after production costs. Treaty 8 experts put the capture rate at 11% to 14% under most price scenarios and said Tuesday’s material still cannot be properly analysed. Dix said officials were “on the right track” and that the design should be “fair for the taxpayers and the owners of the resources,” including First Nations.
Conservative finance critic Gavin Dew has put three questions on the file: whether the new royalty design returns a fair share of a public resource, whether a forecasting error of this size is a competence problem, and what Dix and Eby knew when they sold the Budget 2026 numbers.
“What kind of dog and pony show, half-baked, Podunk, just-fell-off-a-turnip-truck-government is David Eby running where errors this basic are able to make it into the fundamental budgetary documents of this government?” Dew asked on X Wednesday morning.
Josie Osborne, who is marine biologist by vocation and has zero professional background in finance or accounting, inherited the finance portfolio on August 14. September 14 is her first chance to put a corrected royalty line into a public fiscal document.
The legislature returns October 5.
Rob Shaw: B.C.’s $1.5B Excel spreadsheet screw-up leaves bigger questions for voters
Budget error went undetected by senior officials, cabinet and the premier’s office for months
Summary
The B.C. government scrambled Tuesday to explain how a screwed-up Excel spreadsheet blew a $1.5 billion hole in the provincial budget — an embarrassing exercise that hurt the credibility of the province’s financial forecasting.
The contrition by the governing New Democrats for the mistake was slow in coming.
The issue was first raised by Business in Vancouver’s Stefan Labbé directly to Premier David Eby on Aug. 25. He asked why natural gas royalties could be off by billions of dollars from budget estimates.
“I’m not familiar with any error in our budget related to oil and gas revenues,” Eby responded.
Labbé reminded the premier that Treaty 8 Nations chiefs had delivered Eby a letter July 14 raising concerns about the new gas royalty regime, and technical errors in how the province estimated revenue.
The normally well-briefed premier was caught off guard. His office quickly leapt into damage control. In a statement to Labbé, it described the issue as a mere “administrative error.”
But Labbé, to his credit, was undeterred.
He suffered through a series of vague and contradictory statements by the Ministry of Energy, which seemed more intent on quibbling about the complex technical nature of the issues raised by the Treaty 8 Nations than acknowledging the giant hole in the budget.
So Labbé put the question back to Eby again on Tuesday. This time, with a paper trail of evidence provided by First Nations, and rising concern from the Opposition and economic experts about the budgeting process, the premier fessed up.
“I’m not pleased by this situation,” said Eby.
“The Ministry of Energy has advised me that there was a human error in the spreadsheet calculations around natural gas royalties.”
The premier said he’d “instructed” the ministry to offer a technical briefing to the media, as well as refer the matter to the independent auditor general for review.
“We need to ensure that the information that goes into the budget is accurate, complete, and that people can have confidence in it,” he said.
“That was not the case for these royalty numbers. And we’ll ask the auditor general for assistance to ensure that we have the processes in place to make sure this never happens again.”
The premier’s contrition was not exactly echoed by senior government officials, who were forced to walk reporters through the issue hours later at a hastily scheduled briefing.
They offered a variation of the “mistakes were made” justification. Someone had dragged the wrong Excel spreadsheet formula across the wrong natural gas figures in a wayward spreadsheet, according to the senior ministry officials, who spoke only on background.
That meant a conversion process from American to Canadian currency was effectively done twice. There was also an incorrect unit conversion on some gas prices, and two “plant inlet adjustment” errors as well.
The borked Excel spreadsheet sailed through ministry officials, deputy ministers, treasury board, the finance ministry, the comptroller general’s office, cabinet and the premier’s office before becoming embedded into the final budget documents the public saw in February—which were then debated in the legislature and sat for five months out in public before First Nations leaders noticed the error.
The impact on this year’s budget is an estimated $306 million. That means the $13.3-billion deficit forecast by the NDP government in February should actually have been $13.6 billion.
Over the course of five years, that mistake totals up to $1.5 billion in overestimated revenue.
Senior ministry officials tried to minimize the error in an accompanying PowerPoint, noting, “for context” that $306 million this year is only a small amount of the overall $85 billion annual revenue forecast. Energy Minister Adrian Dix said natural gas revenue forecasts go up and down throughout the fiscal year.
“These things do happen from time to time,” Dix said of the mistake.
Really? I can’t recall a single time in 18 years covering B.C. politics that the government screwed up this badly in budget estimates due to an avoidable human error and a failure by senior leaders to properly check the work.
Yes, the entire budget is itself basically a giant forecast of what government predicts it will earn and spend in a given year. That’s why it’s updated quarterly with real results. But the starting forecasts are supposed to be carefully calculated by experts. If they’re not, the whole budget, and its interconnected estimates of money in and money out, starts to fall apart at the seams.
“The projections aren’t supposed to be based on a wing and a prayer, they are supposed to be based on sound conditions,” said independent MLA Peter Milobar, a longtime finance critic. “You like to have some sort of confidence in that. And frankly how much confidence should we have in any of these other projections? Was this a one-off or not?”
The Opposition BC Conservatives did not respond to a request for comment, and leader Kerry-Lynne Findlay’s team did not want to make finance critic Gavin Dew available to speak to the issue for this column. However, Dew defied the edict and did the interview anyway.
“It’s a wildly egregious error that strikes at the very competence of this government, their very fiscal literacy, their very ability to do something so basic every single small business person does every day, and that is calculate things using Microsoft Excel and not f**k up the formulas,” he said.
Dew said he’s concerned the government wasn’t honest with the media about what it knew and when. He demanded government make all relevant information public before advance voting begins Sept. 18 in the Abbotsford-Mission byelection being contested by Findlay.
“What kind of dog and pony show, half-baked, Podunk, just-fell-off-a-turnip-truck-government is David Eby running where errors this basic are able to make it into the fundamental budgetary documents of this government?” Dew asked.
He’s got a point.
Hopefully the auditor general gets to the bottom of it. Because at this point, it’s hard to trust the government to handle it.
Rob Shaw has spent more than 18 years covering B.C. politics, now reporting for CHEK News and writing for BIV. He hosts the weekly show Political Capital and has a NEW daily podcast, Political Capital Daily.
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