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Ramsgate MSPO RTU Case
Postmaster: Mr Lee Andrews
Background:
Mr Andrews was suspended as Postmaster for Ramsgate MSPO on 13” June
2003, as a result of an audit, which revealed a shortage of £76915.69.
This shortage was totally unexpected as whilst the branch had been
experiencing balancing problems, they had been showing large surpluses in
the cash account and hence the audit had been arranged (with the
Postmasters knowledge as he felt this would be beneficial also) in an effort to
understand what was going wrong at the branch. The reason such a large
loss had been hidden is that the Foreign Currency Sterling Equivalent (FCSE)
figure had been growing ever since the trainers left the branch. When the
auditors declared the correct figure for the FCSE it effectively deflated the
cash figure within the branch and produced the shortage of £76915.69.
Because of the unexpected nature of the shortage, the following Monday (16"
June), Drew McBride (Head of Area), Rob Fitzgerald (Investigations
Manager), Andy Bowman (Investigations Manager), Alan Stuart (Senior Audit
Inspector) and I (Mark Lawrence, Retail Line Manager) met with Lee Andrews
(Postmaster) and Jo Smallwood (Manager) at the branch to examine if there
was anything that could explain the loss. After examining the paperwork, we
found £23,424.99 of the loss, which had been caused by Mr Andrews
completing the cash account paperwork for the bureau de change transaction
incorrectly, we were unable to find any of the remaining loss, which still stood
at circa £53k. Bearing in mind we had immediately found £23,424.99 of the
loss, we were optimistic that on further inspection at Chesterfield etc. the
remainder might be found, however, because we were unsure of the
circumstances and what may have gone on at the branch, we informed Mr
Andrews that the precautionary suspension would have to stand until we
could get to the bottom of the matter.. Whilst he was unhappy, he agreed that
we could put a temporary Postmaster in charge of the branch in order for it to
reopen.
Following this meeting I contacted all of the various departments at
Transaction Processing in Chesterfield, particularly those dealing with travel
services and explained the situation and asked that all of the paperwork was
thoroughly reviewed in an effort to find errors that would reduce the loss. I
also contacted the local National Federation of Sub-Postmasters (NFSP)
Branch Secretary (Phil Blackman) who has vast experience of the on-demand
bureau de change transaction and arranged to meet him and his wife
(Vanessa) along with Drew McBride to go through all of the paperwork to see
if we had missed anything. We met with Phil and Vanessa of 4" July 2003,
but were unable to find anything further, although the general feeling at this
point was that someone within the branch may have taken advantage of Mr
Andrew's lack of controls. As a result of the meeting I requested further
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information from Chesterfield, including the Command 10's as only some of
these had been retained by Mr Andrews.
Unfortunately between this point and October we received no further error
notices that had a major bearing on the loss, which at this point stood at
£51,820.98.
It was therefore decided that we invite Mr Andrews to a fact-finding interview
to discuss the outstanding loss, the outstanding licence fee and the
outstanding rent. The interview took place on 24" October 2003 and it was
agreed that Mr Andrews would put in writing to us why he believed the loss
was in fact in the paperwork, the first stage being for him to contact us and let
us know what information he required. It was further agreed that if he were to
be reinstated in the future then he would have to pay the outstanding rent and
licence fee prior to reinstatement. Subsequently Mr Andrews contacted us
asking for various pieces of information and paperwork, some of which had to
be specifically requested from other POL departments.
Mr Andrews was contacted in November 2003, to advise him that the
information and paperwork he had requested was now available and was
being held at the Kent Area Office in Maidstone for him to inspect. On the 5"
and 6" January 2004 Mr Andrews and a colleague attended the Kent Area
Office and went through the paperwork provided in one of the interview rooms
and then produced a letter detailing where Mr Andrews believed the loss to
be.
For thoroughness I had Mr Andrews reasons for the loss examined by another
Retail Line Manager (Glenn Sully), a Branch Manager with seven years
experience of the Bureau de Change transaction (Steve Toroude, Hastings
BO), and a travel services manager from Chesterfield (Karen White). All
agreed that the argument put forward by Mr Andrews held no validity
whatsoever and so I wrote to him on 17" February 2004 explaining why his
argument was flawed and asked him how he intended to repay the loss.
Two subsequent letters were sent to Mr Andrews asking him how he intended
to repay the loss, with no proposal forthcoming. Therefore on 21 April 2004 I
sent an RTU letter to Mr Andrews, whose response was that he was liaising
with more senior managers in POL over this issue and he would not attend an
RTU interview until he had received a response from them. Mr Andrews was
subsequently written to by Dave Miller (Chief Operating Officer, POL) and
advised to attend the RTU meeting. The RTU meeting eventually took place
on Monday 21* June at the Kent Area Office.
All of the relevant paperwork documenting the process followed has been
included with this summary.
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Case Against Lee Andrews:
14.
Shortage of £76915.69 at audit was totally unexpected, and despite
subsequent investigation and enquiries a loss of over £50,000 still
remains, there have been no significant claim error notices received.
Despite having been given numerous opportunities to prove the loss is
not proper to the branch or himself over a 12 month period Mr Andrews
has been unable to do so.
Despite not being able to prove the loss is not his, Mr Andrews has
failed to accept responsibility for the loss under the terms of his
contract or to offer terms for repayment of said loss.
Case Put By Lee Andrews:
1.
2.
The loss is in the paperwork and the Post Office has not proved that it
is proper to him
He carried out the accounting procedures in line with how he had been
shown by Post Office Ltd trainers.
. Post Office Ltd trainers made it clear to him that they were not
competent in balancing on-demand Bureau de Change branches and
that they ‘made’ the account balance whilst they were there, it should
not have balanced if they had done things correctly.
. There was insufficient training at the branch.
The Retail Line Manager was aware of the loss at the branch prior to
the audit and did nothing to resolve this.
There was a lack of support from the Post Office and Retail Line
Manager.
The process followed since the loss was discovered has been unfair
and Mr Andrews has not been given the opportunity to interrogate the
system.
The process has taken too long and Mr Andrews has not been kept
informed of what is happening.
@ Review of Lee Andrews Case:
I shall review each of the arguments put forward by Mr Andrews in turn before
reaching a conclusion:
1.
There was a comprehensive audit completed on Friday 13" June 2003,
which is how we arrived at the figure for the loss. Further to this, the
branch was revisited on Monday 16" June 2003, by a senior audit
inspector, members of the retail line and members of the Post Office
Investigation Department, £23,424.99 of the loss was identified (as a
result of Mr Andrews incorrectly completing cash account
documentation on 4 different occasions) and subsequently taken from
the original loss figure of £76915.69.
The paperwork for Mr Andrew's period in charge of Ramsgate MSPO
has also been reviewed by Transaction Processing at Chesterfield and
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whilst a number of errors have been discovered, the overall loss still
stands at circa £50,000.
The paperwork was also reviewed by the local Branch Secretary of the
National Federation of Subpostmasters (Phil Blackman) and no
reasons for the loss were found.
When Mr Andrews accepted the appointment as Postmaster at
Ramsgate he signed the appointment papers agreeing to be bound by
the terms of the contract. Further to this, as a result of the transfer
papers having not been completed at the transfer audit on 18" October
2002 they were forwarded to me (as the RLM for the branch) to obtain
Mr Andrews signature. These papers were signed by Mr Andrews on
29" January 2003, over three months into his tenure as Postmaster at
Ramsgate MSPO. The acknowledgement of appointment states: I
accept the appointment as Subpostmaster at Ramsgate and agree to
be bound by the terms of my contract, and by the rules contained in the
book of rules and instructions contained in those postal instructions
issued to me. The specific section relating to losses in the MSPO
contract is Section 9 (M), part 12 and states that: ‘The Sub-Postmaster
is responsible for all losses, caused through his own negligence,
carelessness or error, and also for losses of all kinds caused by his
assistants. Such losses must be made good immediately.’
Mr Andrews did not complete the cash account as instructed by the
trainers. You will see from attachment 1 that for the five weeks the
trainers were at the branch i.e. cash account weeks 30 to 34 the
Command 10 total from the Forde Money Changer matched the
Foreign Sterling Cash Equivalent (FSCE) figure on the cash account.
From week 35 (2002/3) to week 11 (2003/4) when Mr Andrews was
responsible for the cash account these two figures did not match once,
with the FCSE figure continuing to grow, which effectively boosted the
cash on hand figure, and hence masked the shortage until the audit
was completed on 13" June 2003.
Mr Andrews does not follow clear instructions. He entered weekly
sales figures for the Bureau de Change transaction against the Bureau
de Change Commission line on at least four of the 29 cash account
weeks he was responsible for despite using the balancing guidelines
for bureau, which provides clear instructions on how to record the
necessary information.
. To an extent Mr Andrews has a point here in that the two trainers
originally assigned to him were not expert in the on demand Bureau de
Change transaction. However, I arranged additional Bureau training,
which was completed by Cindy Kennard (who is expert in this field),
which took place between the 12” and 15" November.
In terms of the trainers ‘making things balance’ this is not the case as
the cash account shortage declared for the last trainer balance was
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£2,921.78. Further to this, once we had reviewed all of the error
notices received for the first 5 weeks when the trainers were present,
the loss figure for this period was reduced to £2087.36, which we wrote
off from the outstanding loss in line with the national process.
4, The branch received way in excess of the normal training; in total the
branch received over 200 additional trainer hours compared to the
normal offer for a branch such as Ramsgate MSPO. Attachment 2
shows the details.
5.1 was not aware of this loss until the audit result was relayed to me on
13” June 2003. Up until that point a large surplus had been showing in
the cash account, and I was expecting a surplus to be declared
following the audit.
Mr Andrews up to this point also claimed to be unaware that the cash
account was running a shortage. If Mr Andrews were aware there was
a shortage, as he now claims, and that I had not been supportive then
why did he:
(i) Sign the acknowledgement of appointment on 29" January
2003, and in so doing agree to be bound by the terms of the
contract.
(if) I Not make a complaint to either Drew McBride or Richard
Barker, both of whom visited the branch on 10" June 2003
(prior to the audit on the 13" June), as he had previously
made complaints against numerous parties including Post
Office Property Holdings (POPH), the Audit Team and the
Training Team.
(iii) I Not write a letter of complaint to David Mills or Allan Leighton
as he had done in the past about other departments etc. and
has since done about this case.
6. Throughout Mr Andrews period in charge at Ramsgate I feel that I
supported him fully, as demonstrated by the following facts:
(i) I visited the branch on at least 30 occasions between Mr
Andrews taking over on 18" October 2002 and his
suspension on 13" June 2003. This is far in excess of the
usual levels of support offered to new agents.
(ii) I When Mr Andrews complained his pay was incorrect, I took
the time to review his remuneration and identify where the
shortage was. Indeed I pursued why this had occurred in the
first place. See attachment 3.
(iii) I arranged for Mr Andrews to receive fixed pay for first 3
months of appointment as previous Temporary Postmaster
had not completed the paperwork correctly which would have
affected the traffic related pay.
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(iv) I After 3 months arranged for Mr Andrews to receive fixed pay
for a further 6 months in order that he develop the retail side
of the business to make the overall venture viable.
(v) _ Larranged for POL to pay one of the staff members he took
on from the previous temporary Postmaster for the
outstanding wages she was owed. This was agreed with the
Head of Area as the member of staff was on the point of
leaving and this would have left only 1 experienced member
of staff.
(vi) I constantly liaised with POPH to make improvements to the
property. I still have scores of emails to demonstrate this
point.
(vii) I arranged additional training for Mr Andrews and staff as
previously documented.
(viii) I arranged support from the Network Implementation and
Equipment Team (NIET) for Mr Andrews plans to refit the
shop and Post Office.
If I knew about the shortage as Mr Andrews is now claiming why would
I have ignored this issue and yet dealt with all of those outlined above?
. The process followed has strictly adhered to the guidelines laid down
by the business. Indeed it could be argued that these guidelines have
been exceeded as demonstrated by the examples below:
(i) The meeting at the branch on Monday 16" June 2003,
whereby members of POID, Audit Team and the Retail Line
met with Mr Andrews and found £23,424.99 of the loss.
(ii) I The meeting between Drew McBride (Head of Area), Phil
Blackman (Branch Secretary, NFSP) and myself on 4" July
2003 to check the paperwork and look for any errors that
may be evident.
(iii) The fact-finding meeting held at Maidstone on 24" October
2003.
(iv) _ Providing Mr Andrews with access to all of the paperwork at
the Kent Area Office on 5" and 6" January 2004, so that he
could put forward reasons as to why the loss was not proper
to him.
Further to this, the paperwork has been reviewed by Ria McQueen and
then by Dave Miller (Chief Operating Officer, POL) following a flag case
complaint from Mr Andrews constituency MP and all was found to be in
order. Indeed Mr Miller emailed a response to this effect to Mr
Andrews on 10" July 2004, in which he stated: ‘the agreed processes
have been followed in this case and I can find no evidence to support
your allegations of unfairness.’
Mr Andrews constantly refers to the fact that he has not been given the
chance to interrogate the Horizon system to prove that the loss was
caused by the system and that at our fact-finding meeting of 24
y
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October 2003 he had been promised the opportunity to do so. This is
in fact not true, at the meeting of the 24" we agreed that the first step
would be to provide Mr Andrews with the documentation he requested
so that he could put his case to us. We further agreed that once this
case was reviewed, that if necessary we would use the Horizon system
at a training office to check what he had done. However, we also
stated that if the case put by Mr Andrews quite obviously resolved the
issue in that it identified the loss then there would be no need to use
the Horizon equipment to review the argument, and likewise, if the
case put forward by Mr Andrews was obviously flawed then there
would be no point in using the Horizon equipment to review it.
As you can see from my letter to Mr Andrews of 17" February 2004,
the case that he put forward to us (and was adamant that identified the
loss) was fundamentally flawed and could be shown (as it was in the
letter) to be so without the need to review on an Horizon terminal. The
fact that in his letter to me of 21% February 2004 Mr Andrews wrote
that: ‘I don’t understand or agree with its content,’ is not a valid reason
to waste more resource meeting up to prove the theory is incorrect on
an Horizon terminal. Anyone with a working knowledge of the cash
account should be able to understand the content of the letter sent to
Mr Andrews on 17" February 2004, so the fact that he could not or
claimed not to be able to is worrying to say the least, and would point
to a lack of control within the branch during his period in charge.
At this point I realised that no matter what I did, Mr Andrews was not
going to accept responsibility for the loss and so for us to meet up
would have been a farce as he would not listen to reason on this
matter, no matter how obvious this may be, as demonstrated by his
inability to accept the contents of the letter sent to him on 17" February
2004.
. The process has taken a long time to complete, but this is because we
have properly reviewed all of the paperwork to ensure that the loss is
not within the paperwork as claimed by Mr Andrews. We have also
held various meetings as part of the process and given Mr Andrews
sufficient time to put forward arguments to POL as to why the loss is
not proper to him.
Mr Andrews must take responsibility for some of the delays as detailed
below:
(i) Mr Andrews was contacted and advised on both the 20"
November 2003 and 17" December 2003 that the paperwork
he had requested was available from 4" December 2003 and
despite of this he did not visit the Area Office until the 5”
January 2004 to review the paperwork he had requested.
(ii) Mr Andrews was first written to on 17" February 2004 and
asked to put forward proposals as to how he would repay the
loss, but refused to take responsibility.
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q
(iii) I Mr Andrews refused to attend an RTU until after his
complaints to Dave Miller had been answered, despite
having been advised to. The first RTU letter was sent on 21*
April 2004, but because of delays on Mr Andrews part was
not heard until 21! June 2004.
Mr Andrews has been kept fully informed of the progress of this case
as shown from the correspondence associated with this case.
Conclusion:
e It is evident from our records that there have been a large number of
accounting errors related to Mr Andrews'’s period in charge of
Ramsgate MSPO.
¢ tis also clear however, that despite it now being over 12 months since
Mr Andrews suspension there is a large loss at hand of circa £50,000, @
for which there is no explanation. There are 5 possible reasons for this:
(i) An error notice is due. This is extremely unlikely as all of the
paperwork has been reviewed at Chesterfield and it is now
over a year since Mr Andrews was in charge at the branch,
anything that was due could reasonably have been expected
to have been issued by now.
(ii) I The loss was caused by a system error. Mr Andrews has
been given the opportunity to prove that this is not a paper
loss and has been unable to do so.
(iii) I Mr Andrews or a member of his staff has been careless and
overpaid a customer or mislaid accounting vouchers to this
value. Once again extremely unlikely due to the extremely
large sum of money involved. @
(iv) The audit result was not robust. No reason to doubt the
audit figure, and indeed subsequent checks and visits have
not lead to any cause for concem in this area. Mr Andrews
has not raised this as an issue.
(v) I That Mr Andrews or another party has misused our cash.
Whilst this cannot be proved, on the balance of probabilities
this has to be seriously considered.
Mr Andrews employed staff without completing background
checks on their suitability. He employed a female member of
staff (Jeanette Todd) who subsequently stole money from
him and was prosecuted. After this he also employed a
manager known only to me as Paul who left very shortly
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afterwards as information regarding his previous employment
came to light.
There was a lack of control within the branch with Mr
Andrews not fully understanding the cash account as
evidenced by his letter to me of 21° February 2004 and the
four errors totalling £23,424.99 made through Mr Andrews
inability to follow simple accounting instructions.
Mr Andrews employed a manager (Jo Smallwood) within the
branch who had no experience of Post Office transactions
and the cash account. Ms Smallwood struggled to
understand the transactions when being trained at the
counter and yet was given responsibility for back office work
and the cash account.
The branch ignored error notices, to the extent that I had to
show Ms Smallwood how to put these through, despite the
error notices containing clear instructions on how to process
them. Calls from Transaction Services at Chesterfield were
also ignored or callers told that the branch was too busy to
deal with these matters.
The retail side of Mr Andrews business was struggling to
make ends meet, as was his other business, a nightclub in
Ramsgate which was suffering due to a rival nightclub
opening up which provided free transport for pub-goers to
their venue. Could Mr Andrews have been struggling to
make ends meet?
Taking all of the evidence into account it is my opinion that there is no doubt
that the losses at Ramsgate MSPO are proper to Mr Andrews and that
despite being given numerous opportunities to offer terms as to how he would
repay this loss he has failed to do so. Mr Andrews has therefore placed
himself in breach of his contract for services.
Award: Summary Termination
An award of three months notice was discounted because following the audit
of 13" June 2003 and the subsequent unexpected and unexplained loss, I
had no option but to precautionary suspend Mr Andrews. The whole of the
process followed has been transparent, and in my opinion fair to Mr Andrews
as it has given him the chance to either explain the loss or repay the
outstanding monies, neither of which he has been able, or chosen to do.
It is also my belief that should Mr Andrews offer to repay the outstanding loss
at any subsequent appeal interview, then the award of summary termination
should stand for the following reasons:
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5
1. The loss currently stands at £49,290.95 and despite all of the evidence
and the fact that he has signed a contract for services that clearly
outlines his responsibility to repay losses he has refused to do so. Mr
Andrews clearly believes that if a contract is not in his favour it can be
ignored and my belief is that he would continue to ignore his contract
for services if reinstated if the circumstances suited him to do so. Why
should Mr Andrews be allowed to behave this way and refuse to
recognise his responsibilities?
2. Anumber of errors have been uncovered since Mr Andrews
suspension and his inability to understand simple Post Office
accounting procedures (as demonstrated by his letter to me of 21%
February 2004) call into question his capability to run any Post Office,
yet alone one the size of Ramsgate MSPO.
3. As previously detailed the fact that either Mr Andrews or one of his staff
may have misused Post Office funds has never been fully disproved
and remains perhaps the only logical explanation for this large loss. @
Hence, if Mr Andrews were reinstated after repaying the loss how could
we guarantee that this would not happen again, when we have not
uncovered the reason for the original loss?
4. Mr Andrews has blamed everyone but himself for the loss, and if he
were reinstated a balanced working relationship between Mr Andrews
and the Post Office would be very difficult to achieve and sustain.
5. Mr Andrews claims not to have been making any money from the
venture, hence our support in fixing his pay whilst he was supposedly
planning to refurbish the retail. Why would Mr Andrews want to take
back a loss making business, which he does not have the experience
or ability to run successfully, as demonstrated by his period in charge.
For the reasons outlined, it is my belief that the appropriate award is summary
termination and that there is no justification for his reinstatement, even if at ©
this late stage he offers to repay the outstanding loss.
Mark Lawrence
Retail Line Manager
Area 412 .
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