"There's a problem and we already know about it" is so much better than "there's a problem and we don't know about it and/or are hoping it will magically go away and that we won't be embarrassed".
"If we admit to it we may have to compensate per SLAs, so dishonesty it is!"
"If we admit to it we may have to compensate per SLAs, so dishonesty it is!"