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Pack for James Arbuthnot and Oliver Letwin meeting scheduled for 17 May 2012
This pack contains:
1, Agenda 2
2. Key Messages 3
3. Potential Questions 7
4. Network Background 10
5. Horizon WW
6. Post Office Recruitment and Training Process for Sub Postmasters 13
Z. rough Case 15
7.1 South Warnborough Timeline 15
7.2 South Warnborough Cash Holdings Graph showing cash holding for J Hamilton until March 2006 and then subsequent subpostmaster cash holding 18
8. Yetminster Case 19
1. Case Summary 19
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1. Agenda
Attendees: James Arbuthnot Member of Parliament for North East Hampshire
Oliver Letwin Member of Parliament for West Dorset
Alice Perkins Chairman, Post Office Ltd
Paula Vennells Chief Executive, Post Office Ltd
Susan Crichton Legal and Compliance Director, Post Office Ltd
Lesley Sewell (?) Chief Information Officer, Post Office Ltd
Case review: Rod Ismay Head of Produce and Branch Accounting, Post Office Ltd
Angela Van-Den- Head of Network Services, Post Office Ltd
Bogerd
Agenda Item Lead by: Duration
1_I Introductions Alice 5 mins
2 I Post Office Background Paula 5 mins
3 I Horizon - Background Lesley 5 mins
4 I Training — Background Paula 5 mins
5__I Introduction to case review Susan 2 mins
6a_I Review Jo Hamilton Case — South Warnborough branch Angela 20 mins
6b I Review Tracey Merrick Case - Yetminster branch Susan 20 mins
7 I Conclusion and next steps Alice 10 mins
2. Key Messages
Agenda Item
1 I Introductions
2 I Post Office Background
Who
Lead by:
Lead by: Paula
Durati
5 mins
5 mins
Key Messages
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eoo0000
Thank you for coming today
People round the table are....
We understand you have raised some concerns, and are
representing the concerns of sub-postmasters in your areas
We are open to feedback and we will provide you the
information we have available, our aim is to be open and
transparent
Start off by providing you an overview of the Post Office
11,800 branches
Over 10,000 agency branches
We process over 150 million transactions each month
20 million people visit a Post Office each week
Post Office Ltd provides full infrastructure support to all
branches with a UK-wide cash and stock distribution
system, product and marketing support, a helpdesk who
provide telephone support for sub-postmasters, and field
support teams who provide on site support.
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3 I Horizon - Background Lead by: Lesley 5 mins o Horizon is the system used in branch to process counter
transactions and branch accounting. Horizon was designed
with integrity in mind from day one.
o. Although we recognize that Horizon is not perfect, no
computer systems is, it has been audited by internal and
external teams, it has also been tested in the courts and no
evidence of problems found (of the nature suggested by
JFSA)
co An upgraded version of Horizon was deployed 2 years ago.
Both versions of Horizon were built on the same principles
of reliability and integrity:
co An audit trail is created for each transaction.
o Each transaction is protected with a digital signature
to prevent change or tampering
o Reconciliation processes automatically detects any
problems
4 I Training — Background Lead by: Paula 5 mins co Run through the recruitment / training process from
beginning to end. Key points:
o Classroom training followed by on site support
oO Help desk support available at all times
o On site support available on request
o Contract is available to the sub-postmasters before
they sign it. Key points are specifically reviewed
Effectiveness of training is independency assessed
o__What we are do to improve our processes
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5 I Introduction to case Lead by: Susan 2 mins o Occasionally we do get incidents of fraud.
review o Describe high level process Eg, P&BA phone call, audit,
investigation, interview,)
oO Public money, important it is protected.
o Direct Oliver Letwin into the next meeting room.
6a I Review Jo Hamilton Case I Lead by: Angela I 20 mins o Run through timeline of events. Key facts:
— South Warnborough o Cash holdings
branch o. Training received
o Audit findings
co. She was provided an opportunity for an explanation
© She did plea guilty to fraud
6b I Review Tracey Merrick Lead by: Susan 20 mins o Run through timeline of events. Key facts:
Case - Yetminster branch o Produces a cheque for £9,500 when audited,
explaining that she had removed cash of that value
the previous night after declaring her cash balance
on Horizon
o A further shortage of £3,500 was also found at her
outreach branch
o The cheque for £9,500 bounces
© Miss Merritt has said transactions were being done
after she had been excluded from the system.
There is no evidence of this, however, events that
would have been done are the balance following
audit and the remittance of the remaining cash back
to the cash centre.
Conclusion and next steps
Alice
10 mins
What are your thoughts on the meeting? Do you have any
areas of concern?
We are considering commissioning an independent audit as
an assurance measure, but in light that there is no evidence
that there is a problem, we need to determine if this is a
good use of public money.
What are your thoughts?
Next steps?
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3. Potential Questions
Quest
1 I Why are crown staff and sub-post
masters treated differently if
found committing fraud
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Response
Post Office staff are expected to balance in the same way as sub postmasters. If a clerk misbalances
resulting in a loss of more than £30:
co. Three times in a three month period (or less) they receive an informal warning
© Six times in a six month period (or less) they are interviewed
o Nine times in a nine month period (or less) they are re-interviewed an put on an
improvement plan which could lead to dismissal if no improvement is forthcoming.
Criminal Investigation and Prosecution Process
Post Office applies consistent investigation and prosecution processes across our Sub office and our
Crown estate.
Once any branch comes to our adverse attention we would raise an active investigation and proceed
in a formalised manner. Suspect offenders would be interviewed under the auspices of PACE (Police
and Criminal Evidence Act) and cases passed for advice to lawyers. The lawyers would apply the
“prosecutors’ guidelines” (in reality CPS checks and balances) to the matters in hand and advise
prosecution, or not, accordingly dependant on evidence and not branch type.
In terms of investigation and prosecution it is factually incorrect to state or infer that we treat the
branch office staff differently.
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What is our view of Computer
Weekly
Computer Weekly is well respected within the IT industry and widely read in Government.
Computer Weekly does not have in-house experts; it relies on using expert consultants from the
industry at large.
As we have external and internal experts available we don’t believe Computer Weekly can assist us
in this specific case. Although there is no evidence of problems with Horizon, as an assurance
exercise we are considering an audit of our processes, data, and IT systems. If we do proceed with
this audit, it is likely that we will use a professional audit organisation that are tried and tested in this
area as we require organisation who have the reputation and the experience of defending audits
against external scrutiny
We will, however be engaging Computer Weekly as part of our IT Transformation communication
plan, and will pick up any Horizon related matters through that forum.
If when suspected of fraud we bar
sub-postmasters from the system,
how can they be expected to
prove their case?
Sub-Postmasters should be balancing their accounts at the end of every day. If there are any
discrepancies they should be investigated by the sub-postmaster with assistance from the help desk
and P&BA. There should be no surprises at the time of an audit.
In cases where an auditor has found evidence of fraud, the previous trial balance (which the sub-
postmaster has approved) will be the baseline record. If there are found to be any discrepancies with
that Trial Balance the sub-post master should have followed the standard process to resolve.
If discrepancies are found during the audit, the sub-postmaster will have the opportunity to explain
any anomalies.
Does the system allow sub-
postmasters to understand why
errors occurred, eg can they
interrogate past transactions?
Yes, they can go back and look at past transactions
The help desk and P&BA can also provide assistance
Sub-postmaster should do a cash balance every day so, so should not be necessary for them to
integrate vast quantities of transactions.
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Why are we considering Deloittes
to perform the audit?
KPMG are excluded as they are Fujitsus’ auditor
E&Y are excluded as they Post Office’s auditor
PWC are not recommended because not on Post Office’s supplier short list, although this could be
bypassed if required.
Deloittes are on Post Office’s supplier short list and have proven experience in this area
The audit could cost in the region
of £250-£500k, why so expensive?
The audit envisioned is a thorough end-to-end review of processes, systems and data which not only
could reveal potential improvements but could be used as an assurance for court future cases. The
cost is a result and thoroughness of the audit and the expertise required. An alternative, reduced
scope audit could also be considered.
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4, Network Background
The Post Office has a unique and valued place at the heart of communities across the UK.
A third of the UK population and half of all small businesses visit a Post Office each week which helps to make it one of the nation’s most
valued and treasured organisations.
It is seen as a vital public service but it faces a challenging commercial environment.
Over the last ten years footfall has dropped from 28 million customers a week to just under 20 million. This is largely driven by the reduction in
government services and a shrinking consumer mails market in an increasingly digital world.
Following the enactment of the reforms contained within the Postal Services Act 2011, Post Office Ltd is now (as of 1 April 2012) an
independent company. It has its own Chairman and full Board including non-executive directors. The Postal Services Act has made clear that
the company will remain in the public sector — with the possibility of mutualisation at a later date.
The company provides services to just under 20 million customers (and to half of all small businesses in the UK) per week
We have a network of over 11500 Post Office branches. 373 of these branches are operated directly by Post Office Ltd. All the others are
agency branches operated by independent business people or multiple retailers - typically as part of retail premises. There are over 10,000
agency branches.
The network carries out over 150 million transactions a month.
Post Office Ltd provides full infrastructure support to all branches with a UK-wide cash and stock distribution system, product and marketing
support, a helpdesk who provide telephone support for sub-postmasters, and field support teams who provide on site support.
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5. Horizon
Summary:
© Horizon designed with integrity in mind from day one
© Horizon has undergone external scrutiny
o. Each transaction is audited and protected with a digital signature to prevent change or tampering
o Reconciliation processes automatically detects any problems
Background
©. The Horizon computer system is used in all Post Office branches to process counter transactions and process all in-branch accounting
processes. Horizon enables sub postmasters to account accurately for each transaction they undertake in their branch.
o The system has been operating for over ten years. In that time around twenty thousand sub postmasters have used it in performing
many millions of successful weekly and monthly financial reconciliations between the cash they have in the office and the transactions
they have handled.
o. The National Federation of Sub Postmasters (NFSP), which represents sub postmasters throughout the country, has expressed its full
confidence in the accuracy and robustness of the Horizon system.
o In 2010 Horizon underwent an upgrade. The upgraded system was tested and has the full support of the NFSP
External Scrutiny
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Horizon and Post Office Ltd systems environment have always been subject to external scrutiny for both assurance and accreditation
purposes. Ernst & Young carry out an annual financial systems audit; an independent auditor also carries out a yearly audit to maintain
the system’s Payment Card Industry (PCI) accreditation.
The system and its Data Centre are ISO 27001 accredited which requires an annual audit from an independent agency. Horizon is also
accredited by HSBC Payment Services and WorldPay (Post Office’s Merchant Acquirers) and must comply with the VocaLink standard
for card payment transactions. In addition to these regular audits, ad hoc independent audits of the system are initiated by Royal Mail
Group and supported by Post Office Ltd.
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Designed for Security and Integrity
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Horizon was originally built to support benefit payments against requirements from Post Office Limited and the Benefits Agency. The
need for security, integrity and a strong audit trail has been emphasised since day one.
Horizon system keeps full audit records of all transactions undertaken by all log ins — so that it is always possible to track back anything
that has occurred within the system — or at an individual sub post office
The system is designed such that all data is sequentially numbered at the point of its creation and is separately stored in a secure
tamper proof facility for 7 years — so that recreation of situations and track back is always feasible
Horizon requires clerks to log on, using their own username and password before any transactions can be carried out.
Horizon captures ‘baskets’ consisting of items sold and payments in or out at the counter. When the clerk settles a basket this is clearly
shown on the counter screen. Software at the counter digitally ‘signs’ each basket.
Each basket is written to the audit trail where it is kept for 7 years. Data in the audit trail is cryptographically protected to ensure that
its integrity can be asserted.
Reconciliation and Validation
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Each basket is checked to balance to zero at the data centre; if it did not (eg because of a bug in the software) it would be rejected. The
signature applied by the counter is checked before the data is written to the database.
The data centre also checks that each basket is the one expected (i.e. the count has gone up by exactly one). If it is not, then, if
appropriate, the clerk is notified of the need to recover.
Transactions are reconciled with all the banks and clients, any discrepancies are investigated and resolved.
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6. Post Office Recruitment and Training Process for Sub Postmasters
Prior to appointment
The key extracts of the contract are covered at the interview stage by the Contracts Advisor. One part of which is:-
Post Office cash & stock
e Balancing/branch trading.
e All discrepancies to be made good immediately.
e Fraud.
¢ Cash for PO use only.
e Robbery/burglary,
e Error, theft by assistants, cashing personal cheques.
Following Appointment
Acopy of the contract is sent to the agent.
An appointment pack is also issued to agents when they take over a branch and is explained by the trainer to the agent whilst on site.
The following is an extract from the document:-
The Subpostmaster is responsible for all losses caused through his own negligence, carelessness or error, and also for losses of all kinds
caused by his Assistants. Deficiencies due to such losses must be made good without delay. Section 19:
Once the offer of appointment is accepted, training dates are then confirmed.
Training
Training processes are under constant review and can be modified to accommodate a variety of circumstances. Training commences within
classroom for larger branches and is delivered in advance of the site transfer, or delivered at the time of the on site transfer in smaller
branches. The Ops Manual is used as reference document during training and all subpostmasters have a copy, although most of the Ops
Manuals are now on-line in ‘Horizon on-line Help’ which is available at every branch.
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Both the classroom and on-site training includes how to complete the office balance and the trainer is on site with the agent for the
completion of the first office balance, which is always a Branch Trading Statement.
Follow up support is provided to assist with balancing or any other training needs. This takes the form of:
Helpline support at NBSC. If unable to resolve the issue the agent is referred to the POLtd Branch Support team.
The Branch Support Team is able to provide telephone support to the agent. If this support doesn’t fully resolve any issues (and in the
majority of cases this does) then this is escalated to the Field Support Team.
A member (trainer/auditor) of the Field Team will also telephone the branch to assist and if necessary then visit the branch to provide
face to face support.
Remedial training would be arranged following the face to face support if the Field Support Advisor felt this was necessary.
Is the training adequate?
Customer satisfaction with training is tested through independent research questionnaires collated by an independent research company. The
field team leader receives a copy of each branch feedback form and if any comments cause concern or if any Agent raises an issue regarding
the quality of the training or lack of confidence this is followed up by the team leader. There is currently a 95% satisfaction from a response
rate of 69%.
Initial training
All new entrants to the business receive classroom training the length of which depends on the model of the branch, plus 6 days training on
site. All new Agents also have further follow-up contact to embed training, which includes:-
At one month from appointment a follow up telephone call to check all is okay and they are confident;
At three months from appointment a face to face visit to check all is okay and observe the branch operationally, provide a refresh and
support as necessary;
At six to nine months after appointment a face to face unannounced follow up which is unannounced and includes a procedural and
compliance audit, an audit of cash and stock
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7. South Warnborough Case
7.1 South Warnborough Timeline
Date Action
24/12/2001 I — Josephine Hamilton (JH) begins working at the South Warnborough SPSO.
21/10/2003 Ie JH appointed as subpostmaster (SPM).
¢ — SPM assisted by Mrs Partridge. Mrs Partridge denies (in her statement dated 31/07/2006) having ever assisted with balancing or completed any
cash declarations.
1/12/2004 I — Cash held increases from £15,000 to £35,000 (See Graph at 7.2)
to 1/4/2006
03/02/2004 Ie — Unidentified loss of £3,191.00. JH requested hardship payments to be set up to clear this loss. (Payment deducted from salary over a 12 month
period)
24/02/2005 I « Unidentified loss of £750.00. JH requested hardship payments to be set up to clear this loss.
01/05/2005 Ie Warning letter sent to JH for rolling balance not made good (£724)
01/09/2005 I * Second warning letter sent to JH for rolling balance not made good (£188)
05/10/2005 Ie PO migrated to branch trading. (Formal balancing every month instead of every week). No onsite visit provided, but would have been provided with
an interactive training CD ROM, a Transition Guide, a Quick Reference Guide, a branch trading calendar and the relevant manuals. The SPM would
also have been invited to attend a number of face-to-face events explaining migration.
. Records indicate that no requests were made for replacement materials or that the CD-ROM be exchanged for a video.
08/02/2006 I — Branch Trading Statement for trading period 10 (13/01/06 to 08/02/2006) completed.
¢ Statement shows a shortage of £6.74 and cash on hand stated as being £35,515.83.
06/03/2006 I « Rebecca Portch (Retail Cash Management Support) contacted the branch regarding high levels of cash holdings. Branch paying out approximately
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£2,500 on average per week, but declared cash holdings in excess of £20,000.
SPM requested by Ms Portch to return £25,000 by 08/03/2006.
SPM alleged to have advised a NFSP representative, Kam Matharu, that there were problems at this branch. The nature of the problems was not
specified.
07/03/2006 SPM signed off on sick leave.
08/03/2006 Excess cash holding not returned by SPM as per request.
09/03/2006 Audit undertaken. Deficiency (including cash and stock) of £36,644.89 identified by the audit team.
Cash figure on Horizon stated to be £37,360.06. The cash physically verified as being n hand only £1,933.48 (a difference of £35,426.58).
SPM precautionary suspended as a result of shortfall. SPM requested to attend an interview under caution.
15/03/2006 Izzy Hogg, solicitor acting for the SPM, contacts POL and offers to provide a written statement. Ms Hogg informed that an interview under caution
will still need to be conducted.
12/04/2006 Second letter sent to SPM regarding interview.
21/04/2006 Agreed interview will take place on 05/05/2006.
05/05/2006 Interview conducted by POL under caution at offices of the SPM’s solicitors.
POL provided disclosure of documents to be put to the SPM in the course of the interview. Includes cash declarations and branch trading
statements.
SPM provides a pre-prepared written statement. The statement states that the SPM did not receive adequate training and that the operation
manuals provided were out of date. Statement also makes reference to an error for £1,500 which is alleged to have doubled to £3,000 when
attempts were made to correct it. The SPM was invited to confirm when that error is alleged to have occurred, but the SPM declined to comment.
Statement also contains a denial that the SPM has ever stolen monies.
Taped interview commenced at 12:13pm. The prepared statement was read and the SPM then gave “no comment” responses to all the questions
raised by the interviewing officers.
Interview concluded at 13.32pm.
11/10/2006 Decision taken to prosecute for theft.
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30/10/2006 Summons issued requiring the SPM to attend before the Aldershot Magistrates Court.
09/10/2007 Defence offers pleas to false accounting by way of mitigation.
19/11/2007 Hearing before Winchester Crown Court.
SPM pleads guilty to 14 separate counts of false accounting. This is accepted by POL on the basis that the losses are repaid in full by 25/01/2008.
Count of theft to remain on file until payment made in full.
04/02/2008 SPM sentenced to 12 month Community and Supervision Order.
18/02/2008 Cheque for £37,644.89 received from the SPM.
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7.2 South Warnborough Cash Holdings Graph showing cash holding for J Hamilton until March 2006 and then subsequent
subpostmaster cash holding
South Warnborough - Cash Declarations
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
£ Cash
01-Dec-04
01-Feb-05
01-Apr-05
Ot-Jun-05 4
01-Aug-05
01-Oct-05
01-Dec-05
01-Feb-06 +
01-Apr-06
01-Jun-06
01-Aug-06
01-Oct-06
01-Dec-06
01-Feb-07
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8. Yetminster Case
8.1 Case Summary
The defendant Tracey Ann Merritt (D.O. had been employed as a Post Mistress for over four years. Ms Merritt worked at the
Yetminster Post Office, but also operated an outreach Post Office at Chetnole.
An audit was conducted at the Yetminster Post Office on the 29" September 2011 following concerns raised by a former holiday relief worker
at the Yetminster branch in August 2011 over alleged cash shortages.
Mr Constant and Mr Gilding arrived at Yetminster Post Office at 8:30am and introduced themselves to Miss Lisa Porter, the daughter of Ms
Merritt who was sitting behind the counter having already logged on to the Horizon system and accepted the Transaction Acknowledgements.
Mr Constant asked Miss Porter when she expected her mother to arrive, Miss Porter informed the auditors that she would be in later on as she
had gone to the cash and carry. Mr Constant asked Miss Porter if she would allow him access to the secure area, which she did, and also to
inform her mother that the auditors were at the Post Office. Ms Merritt allegedly told her daughter to ask the auditors to wait until she
arrived at the branch before they continued, Miss Porter remained quiet until her mother arrived.
Whilst waiting for Ms Merritt to arrive, Mr Constant logged onto the Horizon system for the Yetminster branch using the Global User name
and password as Miss Porter did not have Manager Access to the system. Mr Constant then created user ID BCO003 and logged on to the
Horizon system, using that ID to produce audit reports.
Mr Constant also logged on the Outreach Horizon system for the Chetnole branch, using the user 1D BCO001. No other action was taken until
Ms Merritt was presents in the branch.
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Ms Merritt arrived at 09:15am and Mr Constant advised her that they were there to perform an audit.
Before t he audit commenced Ms Merritt advised Mr Constant of a cheque for £9500 and explained that she had removed cash to that value
the previous evening after she had declared her cash onto the Horizon system. The cheque appeared to be with her outstanding daily
documents, when questioned about this, Ms Merritt stated that she meant to put the cheque through the system the evening before but
hadn’t done so, and was intending to process it that morning. Ms Merritt explained that the cheque was to pay for ‘something personal’ that
had nothing to do with the shop. She explained that she had needed the cash urgently but was unable to get to the bank(s). Ms Merritt
explained that she thought she was allowed to use Post Office cash as a cheque had already been put in to cover it. She expressed that she did
not intend to steal the money and that the cheque, if banked would be honoured.
Ms Merritt confirmed that this was t he first time that anything like this had happened. However the audit team noted that the date on the
cheque had appeared to have been altered from what appeared to be ‘5 (May) to a ‘9’ (September). When asked, Ms Merritt said that it was
due to a writing error. There were no details recorded on the reverse of the cheque and it had not been date stamped.
Mr Constant confirmed with Ms Merritt that he should expect to find the cash at least £9500 short when it was counted, she confirmed that
was correct.
Yetminster Audit findings:
£8546.17 (-) Difference in cash figures
£404.74 (-) Difference in stock figures
£518.24 (+) Difference in postage figures
£17.40 (-) Difference in foreign currency figures
£ 8415.27 Total Shortage
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Chetnole Outreach Branch Audit findings:
£3517.96 (-) Difference in cash figures
£46.71 (-) Difference in stock figures
£933.17 (+) Difference in postage figures
£17.40 (+) Difference in foreign currency figures
£ 3471.55 Total Shortage
The total audit revealed a shortage of £11,886.77 at the two branches under the control of Ms Merritt. The event log balancing printout
showed shortages were apparent during August 2011.
Ms Merritt was issued with a without prejudice receipt for the £9500 cheque and a further without prejudice receipt for a second Santander
cheque for £2386.77 that together made up the discovered shortages on the day. Both cheques later returned not honoured.
Mr Adderley, Contracts Manager precautionary suspended Ms Merritt’s contract for services on the 29" September 2011. Ms Merritt
admitted to Mr Adderley on the day of t he audit that she had taken the money from the Post Office on the evening of the 28" September
2011 for a personal matter, confirming what she had advised the auditors at the office that day.
On Monday 3" October 2011 Ms Merritt was contacted by Mr Thomas to informing her that he needed to interview her and explained her
legal rights and the Post Office Friend rule. Ms Merritt confirmed that she was receiving legal advice and that she would contact him once she
had done this.
On the 5" October 2011 Mr Thomas requested and received a personal printout from HR for Ms Merritt.
Whilst awaiting to hear from Ms Merritt, Mr Thomas continued to progress aspects of the case such as PNC results etc. Following a further
telephone conversation, Mr Thomas wrote to Ms Merritt again confirming that e still needed to conduct an interview with her under caution.
Mr Thomas was eventually contacted by Mr Mike Robinson of Morton Law Solicitors in Yeovil and an interview was arranged at their offices on
Wednesday 9" November 2011. Mr Thomas and Lisa Allen attended the offices at 12:30hrs where disclosure was given from Mr Robinson.
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The caution was explained to Ms Merritt and the interview commenced at 13.18 hrs in accordance with PACE. During the interview Ms Merritt
said the following:
1.
That she denied having taken the money the night before the audit as she had previously advised the auditors, and now produced a
large document regarding on-going litigation by Shoosmith Solicitors over the reliability of the Horizon system.
She only admitted taking the money during the audit because she was upset and would have said anything at the time, when shut
in a room with two men that she did not know. She went on to say that she felt intimidated and would have done anything to get
herself out of that situation. Mr Thomas confirmed that at no point was she locked in a room, but was in fact in a secure area in full
view of customers who were being advised that the Post Office was closed whilst the audit was being undertaken. She was only
present to monitor the audit taking place. Her daughter was also present.
Mr Thomas referred to an ‘Event Log Balancing’ printout which identifies an entry made by TMEOO1 (Ms Merritt) on the 17"
September 2011 at 12:36 hrs that identifies a substantial discrepancy that was immediately followed by a re-entry increasing the
cash on hand by some £14,400 and resulting now in a surplus of £245.45. (This was not posed to Ms Merritt at the time of the
interview).
When asked, Ms Merritt denied taking any money but blamed the Horizon system. Mr Thomas then advised her that it was her
responsibility to arrange an audit following information received from the holiday relief Catherine Early which appeared to be true.
Ms Merritt denied that she had asked Catherine to inflate the cash on hand by £12,000. She stated that there had been occasions
where she needed to take money to Chetnole from Yetminster and had not been able to officially transfer the money as she had no
barcodes to do it. Ms Merritt conceded that even if that was the case, the two branches would not balance and t he amount still
would have been short. Mr Thomas asked why would Catherin Early advised POL about the shortages if they were not true? And
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was she, therefore suggesting that Ms Early was lying? To which Ms Merritt could not say if she was lying, but only that she had not
asked her inflate the cash declaration.
At the end of the interview, Ms Merritt stated she would be willing to allow searches of her home to be conducted. A search was
conducted at 16:27hrs and concluded at 16:41hrs. Three items were seized that related to various bank statements, copies of
which were forwarded to Dave Posnett.
The loss to POL was £11,886.77and Ms Merritt gave a signed undertaking to repay £9,500 within 14 days of her interview on the 9"
November 2011.
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