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Summary of Issues affecting Sub-Postmasters
Sub-post offices make up the vast majority of the Post Office Network. A sub-postmaster or
sub-postmistress (“SPM”) is a self employed manager of a sub-post office. They contract with
Post Office Limited (“POL”) to provide this service.
Although SPM's are self employed, many are under the mistaken impression that they are
employed by the POL such is the control exercised by POL as to how they carry out their
duties.
Access Legal from Shoosmiths, a national law firm, have been contacted by almost 100 SPM's
who have suffered losses they cannot explain and have been subject to disciplinary measures
by POL. All are adamant that they or their staff have not stolen any money. They claim that the
Horizon system, an electronic point of sale and accounting system POL require them to use,
has caused the errors or not enabled them to work out why the errors have appeared in the first
place. They claim there has been no real investigation by POL as to the cause of the losses
that have appeared — SPM's are expected to pay it back regardless of how it was caused.
POL are adamant that the Horizon system has no faults.
Horizon & the balancing of accounts
All transactions in a sub-post office are processed through Horizon. At the end of a trading
period (a 4 or 5 week period) a SPM must balance his accounts and send a declaration, plus
any related receipts, checks and cash to POL. The Horizon system will produce figures based
on the transactions that have taken place as to what he cash and stock total at the sub post
office should be. The SPM will then have to count the stock and cash held to check it matches
up.
When an SPM has completed a cash and stock check and discovers that there is less cash or
stock than Horizon believes there should be, the SPM must make good this loss if it was
caused by his/her error or that of an employee. It is also the case that if the SPM has more
cash than the Horizon system believes there should be, the SPM is entitled to take the surplus
money from the system. At the Crown offices, the larger post offices run by POL, the managers
do not have to repay these losses as they are written off by POL.
If the SPM is ever faced with a loss when balancing, the SPM is presented with two options on
the Horizon system: “Settle Centrally” or “Make Good Loss”. Settle centrally means that,
according to POL, the loss can be investigated. However the description of this from SPM's is
that it just means the loss will be taken from the SPM’s remuneration either as a lump payment
or in stages. If “make good loss” is selected the SPM must make good the loss there and then
out of their own pocket. One of these options must be selected otherwise an SPM will not be
able to trade the following day.
Some of the SPM’s have told Horizon that they have made good the losses when in actual fact
they haven't. The reasons they do this vary, but are typically related to an inability to pay (often
due to have made various repayments previously) and a desire to keep the post office open for
their community. When doing the above an SPM is committing false accounting, albeit not to
enrich themselves, or deny POL what is rightfully theirs.
If a SPM, over a period of time, settles centrally lots of losses or appears to POL to making
good lots of losses they will be audited. If discrepancies are found at audit, a SPM will be
suspended and all the accounts papers at the post office will be taken away for investigation.
The SPM will not be allowed to go behind the post office counters in their shop. The losses at
this stage have been between £6,000.00 and £150,000.00.
The SPM then has a supposed chance to explain the losses but without access to the papers or
the post office system the SPM’s ability to do this is extremely limited. Typically the SPM's
contract will be terminated and POL will request that any losses are repaid under the Contract.
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. POL will ask an SPM to repay all losses that occur and as such there appears no distinction
between losses that may be the fault of the SPM and those which may have been caused by
something else. SPM’s have no opportunity to investigate the reason for the loss, nor to POL
seem inclined to do so either. It is far from clear whether when there is a loss in a sub post
office that POL have actually lost any money.
. If the loss is not repaid POL will prosecute the SPM for false accounting. SPM's are typically
advised by their legal advisors to plead guilty to false accounting, as in the above
circumstances they will have committed it. Many will be charged with theft or fraud but these
charges are typically dropped in these circumstances. SPM's have been imprisoned as a result
of convictions for false accounting.
Other relevant issues
Interview — At interview for the position of SPM most are not questioned about their accounting or
computer literacy skills. Very few of the SPM's had any experience or qualifications in accounting
before taking on the role of SPM, although even those with accounting qualifications have struggled
with Horizon. The SPM’s are then expected to take over the full accounting and balancing procedures
upon their appointment as SPM without even basic knowledge of the same.
Contract - The contract with POL is a standard form 100 page contract that was drawn up in 1994
when a paper based accounting system, with a full paper audit trail, was used. SPM's are routinely
not provided with this contract until they have purchase the sub-post office and completed the
interview and training process. The SPM’s are typically not made aware of the onerous sections of
the contract, specifically those sections relating to repayment of losses, termination of the contract
and lack of compensation for loss of office.
Training - POL provide training for SPM's on how to use the Horizon system which is undertaken
prior to an SPM commencing their contract. This tends to vary between 2 days and two weeks. The
training typically focuses on sales technique with very little focus on accounting skills. When an SPM
starts they are typically accompanied by a trainer for their first week who shows them how to use the
system, in their own post office. The majority of SPM’s believe that their training was not adequate, in
particular in relation to the accounting and balancing procedures and what to do if a loss occurs.
Requests for further training are denied and there is no possibility for a SPM to obtain further training
on the Horizon system without it being provided by POL. The support provided by the Helpline POL
operate to assist SPM's is reported to be inadequate.
Faults with Horizon — It appears that there are numerous ways in which these losses could have
occurred, whether it is as a result system errors, human errors when entering data, faults with cross
system communication or electrical faults. The technical reasons why the errors are occurring is not
the main issue that needs be addressed, instead it is that the Horizon system is does not allows
SPM's to find where an error has occurred and rectify before having to repay losses.
National Federation of Sub-Postmasters — The NFSP are the trade association for SPM’s. They
negotiate with POL on behalf of SPM's and provide representation at disciplinary meetings. They
state publicly that there are no issues with Horizon. Many SPM'’s report that they receive no useful
assistance from the NFSP when they have accounting difficulties. The Communications Workers
Union, the relevant union for POL employees, have recently set up a branch to assist and represent
SPM's. This has been set up by former executive members of the NFSP. Many SPM’s are now
seeking assistance from the CWU as opposed to the NFSP.
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