CNN Money recently reported that popular spreadsheet application, Microsoft Excel, has been involved in, and responsible for, some of the biggest blunders in finance history. Some of the most minute human errors have caused concentrated chaos for several large financial institutions. Below are some of our favorite examples:
Barclays buys Lehman Brothers
When Barclays sent over its offer to buy up Lehman Brothers in the immediate aftermath of the firm’s collapse, it did so with an Excel document. The authors of the spreadsheet detailing Lehman’s assets and Barclays interests, hid, rather than deleted, approximately 200 cell of rotten deals. However, when the Excel file was converted to a PDF and e-mailed out to the bankruptcy court, the hidden parts of the spreadsheet reappeared. The result: Along with the parts of Lehman Barclays wanted, the British bank was also forced to swallow losses on an additional 179 toxic deals it never intended to buy.
Utah has too many kids
In 2012, an unfavorable error in Utah’s office of education underestimated the number of students who would enroll in the state’s public schools, leading to a $25 million budget deficit. The state’s superintendent eventually blamed the error on a “faulty reference in a spreadsheet,” and two of the state’s top finance officials were forced to resign.
Fannie Mae under investigation
Back in 2003, Fannie Mae made an error in an Excel spreadsheet when migrating to a new accounting system. The result: a full investigation into Fannie Mae’s accounting practices and an error that made the corporation look $1.3 billion more profitable than it actually was. The company was embarrassingly forced to restate its results and issue a formal apology
InetSoft does it right
With Excel, the right mistake in the wrong cell can be positively devastating to an organization. By using InetSoft’s data mashup as an Excel alternative, calculations will be reliably repeated as the underlying data changes. Users get all the power and flexibility, without copy and paste errors or broken references.