HMRC Struggles With Accountability After Recent Mistakes

Numerous mistakes by major government departments have resulted in significant consequences recently, leaving their reliability in question. HMRC has been pursuing taxpayers for unreceived penalty notices; The Department for Work and Pensions (DWP) is having problems with duplicating records; and tens of postmasters have been jailed for supplying faulty evidence.

These departments should have a high level of accountability, backed up with a reliable system of records that can be used as a definitive authority on ‘the truth’. The definition of a system of record refers to a system where original data is recorded, providing a reference point for other systems and any future investigations. Restrictions on who can make entries into these ledgers allow someone to be held accountable for any mistakes made.

Similarly named, systems of engagement should not be confused with systems of record. They instead interpret the data into analysis and insights, which can be input into management systems, sales support systems, and other dashboards.

When an automated system is left to deal with these systems of record, its reliability can be called into question. We have broken down the errors and miscalculations that have recently occurred to try and understand why they have happened and what this could mean for the future.

Processing errors: HMRC’s penalty notice data breach

As we become increasingly reliant on automated systems, programming errors become significantly more detrimental. While these miscalculations and errors do not occur that often, they have become renowned in certain areas, such as The Department for Work and Pensions’ universal benefits system.

HMRC has encountered numerous data breaches over the past few years, with almost 20,000 penalty notices being sent to the wrong agents. The department blames this major error on software issues that occurred when a physical task was automated. Notices were incorrectly placed in envelopes addressed to different taxpayers, together with the correct notice. While this is a major data breach, it also causes further trouble for the intended recipient, as the system assumes that a notice must have been received by the correct person if it has been issued and not returned.

Log Accountability: The Post Office Horizon system

As we previously discussed, a system of records needs to be logged accurately by specific individuals to provide confident accountability. Unfortunately, this does not seem to have been the case when 39 Post Office employees were wrongfully prosecuted after the company covered up software bugs in its Horizon IT system that were affecting accounting records in at least 40 branches.

Each prosecution relied on ARQ data from the Horizon system, which is a complete record of all keystrokes made by sub-postmasters and their branch staff. These records are meant to be provided by Fujitsu. This evidence, which proved both the Post Office and Fujitsu were fully aware of Horizon generating inaccurate accounting records, was withheld in many of the court cases. Thankfully, the cases were thrown out in almost every instance.

This miscarriage of justice shows how relying on a system that is meant to record accurate logs does little for accountability when these records can just be ignored or hidden.

Multiple Truths: DWP’s Issues With Their Data Warehouse

Establishing a single version of what is correct is a common issue among large businesses and organisations. When a computer system has multiple data entry points and pools, it can lead to duplicate entries and, as a result, differing versions of the same record.

This problem can occur within government departments too, for example, when your national insurance number is used as an identifier but their systems are not integrated. After updating your address on one system, it is not automatically updated on the others, leaving the government unsure which is the correct record.

As well as the renowned issues with its universal benefits system we mentioned earlier, the DWP is still working to move away from its single data warehouse, Oracle, to achieve a single version of every record made. They are now opting to use on-premises and cloud data systems instead.

The Future of Automation

These examples show how problems in these areas can cause major issues, particularly within accounting, where we rely on an accurate and reliable record from which accounts are derived. These records need to be truthful, with the identity recorded of whomever logs or makes changes, and they all need to exist in a single version.

While artificial intelligence is seen as the future by many, simplifying our lives and removing errors, we can see there are some distinct disadvantages. Many questions are raised, such as how we can hold AI accountable for the mistakes it makes. Is the developer responsible, those in charge of its maintenance, or the person who chose to implement it? How do we identify when an error is due to a human or AI mistake? Will it be a single instance or an ongoing issue? Was it caused by an unfortunate programming error or by a malicious hack? Is a hackable system more reliable than a human, who is more capable of error or influence?

While AI may be able to enhance our systems and speed up a lot of work, it cannot be entirely reliable. As a result, our essential systems of record will not be either. Until significant advances are made in AI’s reliability, it will be an ongoing goal for developers to achieve and organisations to hope for.