A mistake in the system that disburses payments for a housing benefit program in Amsterdam led to a €188 million payout to around 10,000 households in the city, giving each 100 times their annual sum.

Software error leads to mistaken €188 million payout in Amsterdam, could cost millions to fix

on Mar 5, 14 • by Chris Bubinas • with No Comments

A mistake in the system that disburses payments for a housing benefit program in Amsterdam led to a €188 million payout to around 10,000 households in the city, giving each 100 times their annual sum...

Home » Static Analysis » Software error leads to mistaken €188 million payout in Amsterdam, could cost millions to fix

A mistake in the system that disburses payments for a housing benefit program in Amsterdam led to a €188 million payout to around 10,000 households in the city, giving each 100 times their annual sum. A recent investigation tied the cause of the error to an oversight in the software's implementation. While the city has managed to recoup the majority of the money, millions of euros have still not been recovered, and investigating and fixing the issue has already cost around €300,000, the Dutch News reported.

News of the error first broke in December, and the city quickly launched an investigation to find out both what went wrong and how it might go about recovering its money. Research firm KPMG was able to determine that the error was caused by the fact that the software used to handle the payments is based in cents rather than euros, the Dutch News reported. Additionally, no one caught the error as it occurred, leading to the €188 million payout instead of the intended €1.8 million. the highest individual payment was €34,000. Of the total, all but €2.4 million has been recovered, but experts have suggested that at least half of the remaining amount will be extremely difficult or impossible to recover.

Adding to the problem of the incorrect payments was the fact that there were no warning mechanisms in place. The investigation cited human error as well as a software mishap for letting the problem occur, and right way city officials decried the lack of automated safeguards.

""How can it be that no alarms went off?" city alderman Pieter Hilhorst said, according to the Amsterdam Herald. "It seems we're able to pay out €188 million without realizing it."

The incident underscores both the cost of a simple software error or of not implementing automated common sense safeguards, and it can serve as a reminder to developers of the value of using tools like static analysis software to catch potential errors during the production process. With rigorous source code analysis and approaches like peer code review, vendors can design products that are less likely to allow expensive mistakes.

Software news brought to you by Klocwork Inc., dedicated to helping software developers create better code with every keystroke.

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