POL00001304
POL00001304
e
15 November 2007 POST
OFFICE
Mr R Bilkhu
Bowburn Post Office
5 The Leazes www.postoffice.co.uk
Bowburn
Durham
DH6 SAA
Dear Mr Bilkhu
Re Bowburn Post Office
Marilyn Stoddart at the National Federation of Subpostmasters has
i) forwarded documentation supplied by yourself and asked me to
investigate how discrepancies have arisen at your branch.
T understand you have discussed this at length with the Lottery Manager
and his team. Thus I feel greater clarity might be gleaned by trying to
>) illustrate how the different lottery inputs to Horizon will impact a balance
at a branch in a written format.
POL are in no way implying that sales are not being recorded in Horizon
3 or that any knowing errors have been made. Rather, there has been a
misunderstanding as to the impact of adjusting lottery stock, as opposed
to remming the stock in, has on the branch balance.
The enclosed spreadsheet attempts to clarify (note values are purely for
h) illustration purposes). The top table headed “Correct Accounting” shows
how any branch has an overall balance comprising stock and cash.
The Rem in, of a pack of 120 £1 scratchcards, increases stock value
5) holdings but also increases the branch balance, whilst cash is unaffected.
Similarly Horizon sales reduce stock but also increase cash totals, leaving
the overall balance unchanged.
Post Office Ltd. Registered in England and Wales no: 2154540. Registered office: 80-86 Old Street, London, ECV 9NN.
‘The Post Office and the Post Office symbol are registered trade marks of Post Office Ltd in the UK and other counties.
For the purposes of products regulated under the Financial Services & Markets Act 2000, Post Office Ltd isan appointed representative of Bristot & West plc, who are authorised
and regulated by the Financial Services Authority. Registered In England no, 2124201, Registered Office: Bristol & West ple, One Temple Back East. Temple Quay, Bristol BS 6DX
Post Office®, car and home insurance is administered by BISL. Limited, who are authorised and regulated by the Financial Services Authority, Registered in England No 3231094.
Registered office: Pegasus House, Bakewell Road, Orton Southgate, Peterborough, PE2 6YS.
Card account offered by JP. Morgan Europe Ltd through Post Office Ltd. 2P, Morgan Europe Ltd is authorised and regulated by the Financial Services Authority. Registered in
England & Wales No, 938937, Registered Office: 125 London Wall, London EC2Y SAI.
F/426/1
»
POL00001304
POL00001304
www.postoffice.co.uk
The second table illustrates the effect of adjusting stock rather than
Remming in. Unlike the Rem process, adjust stock does not impact the
overall branch balance. Thus if stock levels go up the derived cash
position goes down by a corresponding amount. The effect would be a
cash surplus at the branch at Branch Trading/Balance Snapshot. This
could be easily tested in branch.
The table illustrates stock adjustment of 3 packs impacting the cash value
of the branch by £360. A Transaction Correction is then issued to
replicate the missing Rem process causing stock levels and overall branch
balance to increase, This leaves stock levels overstated by the original
stock adjustments. Thus stock is re-adjusted downwards to the correct
level, which drives up the derived cash position, leaving the branch in
balance.
I do not believe the fact that your branch has been adjusting stock when
the Rem in process has been missed is in dispute, but there are specific
questions that need to be answered.
The Lottery Team have been dealing with a significant backlog of
accounting issues arising from a combination of the move from weekly
Cash Accounts to the current monthly Branch Trading process and
significant levels of non conformance in the Branch Network. This has
meant that issues have not been dealt with in as timely manner as we
would have wished. causing difficulties when branches have disputed
errors. We do apologise for this. This situation impacted the whole of
the Network and the Lottery Team are now able to address current issues.
There was clearly confusion over telephone conversations that have taken
place and hope my illustration has helped to clarify.
The fact that £120 surplus’ should have appeared on your balance
snapshots is correct, but the fact that you were experiencing losses on the
majority of weeks in question does not indicate that the expected surplus
is not incorporated within the net loss figure.
Post Office Ltd, Registered in England and Weles no: 2184540, Registered office: 80 - 86 Old Street, London, ECIV ONN,
‘The Post Office and the Post Office symbol are registered trade matks of Post Office Ltd in the UK and other countries,
For the purposes of products regulated under the Financial Services & Markets Act 2000, Post Office Ltd is an appointed representative of Bristol & West ple, who ave authorised
‘and regulated by the Financial Services Authority Registered in England no, 2124201. Registered Office: Bristol & West pic. One Temple Back East, Temple Quay, Bristol BS1 6DX
Post Offices, car and home insurance is administered by BiSL. Limited, who are authorised and regulated by the Financial Services Authority, Registered in England No 3231094
Registered office: Pegasus House, Bakewell Road, Orton Southgate, Peterborough, PE2 BYS,
Card Account offered by 1P. Morgan Eutope Ltd thvough Post Office Led. 2.P. Morgan Europe Ltd is authorised and regulated by the Financial Services Authority. Registered in
England & Weles No, 938937, Registered Office: 125 London Wall, London EC2Y SA)
F/426/2
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@
POST
OFFICE
www.postoffice.co.uk
You are correct that customer claims on Lottery Transactions cannot be
entertained after 6 months, driving the business requirement to hold
records in branch for that period. The Lottery team have already supplied
the Horizon/Camelot file records that illustrate where discrepancies have
occurred.
As discrepancies at Branch Trading are routinely made good at the office,
there would be no discrepancies for Audit to pick up, as stock levels were
indeed correct. The discrepancies are only visible within POL Product &
Branch Accounting when Client (Camelot) and Horizon files do not
match,
Unfortunately it does appear as though the Transaction Correction was
correct to have been issued. Activation of the packs on the Camelot
terminal generates billing to POL whilst the REM in operation provides
the opposite entry for POL to agree payment. POL do acknowledge that
it would have been far preferable to have alerted you earlier in order that
the correct processing could have been instigated and preventing the debt
to have built to this level.
Branch Analyst
Product & Branch Accounting
1 Future Walk
Chesterfield
S49 1PF
Post Office Ltd. Registered in England and Woles no: 2154540. Registered office: 80-86 Old Steet, London, EC1V SN.
‘The Post Office and the Post Office symbol are registered trade marks of Post Oifice Ltd in the UK and other countries.
For the purposes of products regulated under the Financial Services & Markets Act 2000, Post Office Lt is an appointed representative of Bristol & West pl, who are authorised
‘and regulated by the Financial Services Authority. Registered in England no, 2124201. Registered Office: Bristol & West pl, One Ternple Back East, Temple Quay, Brito BS1 6DX.
Post Office’, car and home insurance is administered by BISL Limited, who are authorised and requlated by the Financial Services Authority, Registered in England No 3231094.
Registered office: Pegasus House, Bakewell Road, Orton Southgate, Peterborough, PE2 6YS.
Card Account offered by 2. Morgan Europe Ltd through Post Office Ltd 1P. Morgan Europe Ltd is authorised ond regulated by the Financial Services Authority. Registered in
England & Wales No. 938937. Registered Office: 125 London Wall, london EC2Y SAY.
F/426/3
vi9zbld
Correct Accounting
HORIZON
Cash
Opening Balances 500 £ 500.00
Rem tn 1 Pack 120 620 £ 500.00
Sales of 50 -60 570 £ 50.00 £ 550.00
Rem In 3 Packs 360 930 £ 550.00
Sales of 250 -250 680 £250.00 £ 800.00
Adjustment rather than REM IN
HORIZON
Cash
Opening Balances ) £ 500.00
Adjust up by 1 Pack 120 120 I-£120.00 £ 380.00
Sales of 50 -50 70 £ 50.00 £ 430.00
Rem In 3 Packs 360 430 £ 430.00
Sales of 250 -250 180 £250.00 £ 680.00
Adjust In 2 Packs 240 420 -£240.00 £ 440.00
Sales of 250 -250 170 £250.00 £ 690.00
Transaction Correction 360 530 £ 690.00
Corrective stock
adjustment -360 170 £360.00 £ 1,050.00
Branch Subtotal
£1,000
£1,120
£1,120
£1,480
£1,480
Branch Subtotal
£500
£500
£500
£860
£860
£860
£860
£1,220
£1,220
Cash held in Till
£
£
£
g£
£
£
£
£
£
500.00
500.00
550.00
550.00
800.00
800.00
1,050.00
1,050.00
1,050.00
~]
mmm mmm mh
m
jiscrepancy
120.00
120.00
120.00
120.00
360.00
360.00
360.00
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Bowbum Post Office
5 The Leazes
Co Durham
DH6 SAA
6" December 2007
Dear Mir Winn,
Lottery Scratchcards Issues
Thank v9 for your letter dated 15 November 2007 re: above. My apologies for the
delay bust I have been awaiting a response from NFSP.
In the absence of a response from NFSP to date and in view of the impending legal
action, J tow give the following response to you letter.
L appreciate the time you have taken to investigate and report my concems but the key
It seems t0 me that POL, the Lottery Team and others are getting themselves tied in
knots over Horizon technical jargon and accounting terminology.
The issue is very simple:
Scratchoards are received at Bowburn Post Office and as and when required put into
dispensers for sale.
This activity is no different to goods being received into a Tesco warchouse and then
put onto shelves in the retail areafor sale.
Up until the point a customer purchases and pays for the goods, no sale is made and no
income iS
Ihave already explained in my previous correspondence how, at close of business, a
simple calculation separates the cash due to POL (Camelot) and what remains for the
retail side.
(Our retail side is relatively small-daily takings average £63-00. We know from
experience that over 80% of the cash accumulated in our retail till belongs to
POL(Camelot) for the lottery. If we find the takings are unusually high e.g. £150-00,
we know 4 mistake has been made in our calculation. This may be simply due to an
error in reading the scratchcard number (numbers are upside down on the till side).
Even if the mistake is carried over, it will correct itself the following day when the
number is te-read and as already explained, Shirley Owens (Counter Clerk) keeps a
meticulous check on the cards at least 2-3 times per week and compares to what we
have and what the Balance Snapshot states. Any discrepancy is made good in cash).
F/426/5
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zalsulations tich Card Calculations
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POL00001304
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Camelot
Camelot’s management systems and their ability to access information are excellent.
At any given time, Camelot is fully aware of :
¢ The number of packs of sctatchcards we have in our secure area
© The number of activated packs and the names of the games in dispensers on sale
e The number of lottery (Lotto, Thunderball, Euromillions etc. ) tickets we have sold
e The mumber of prizes on-line and scratchcards we have paid out
‘The information that Camelot lacks during the day is the actual number of scratchcards
that we have sold. As already explained, we calculate the number of scratchcards sold
using a simple spreadsheet (Appendix 1a and 1b). This is the information we give to
POL via the Horizon system at the close of each day between 17:30 and 17:45.It is
usually the last transaction carried out on Horizon. Due to carly closing, Saturday’s
information is input on Monday morning before opening and is usually the first
transaction carried out on Monday.
These transactions are no different to any other transactions we carry out on Horizon-
be it the sale of a stamp, bill payment, Giro’s, cash withdrawals, cash deposits etc.
It is essentially cash in- cash out.
It does not matter, therefore, how many packs were received, remmed in,
remmed out, activated or not activated-the key question which you, Paul Smith,
John Day and others in the Lottery Team refuse to answer is the number of
seratehcards sold. I find it difficult to accept John Day/Paul Smith’s answer that
sales figures are not available.
A very simple way to address this issue is for POL to obtain the sales figares from
the dates in question, equate them to the number £1, £2, and £5 scratch cards sold
and then compare with the figures supplied by Camelot. A competent person
should be able to do this exercise in 2 less than two hours. All information should
be available at the press of a button.
I now make comments on other parts of your letter.
Parggraph 9
The fact that the Lottery Team had a backlog is frankly of little interest to me. All it
tells me is the levels of mismanagement and incompetence within the organisation. If
the system was not ready why on earth did POL move over to Branch Trading?
Making mistakes regularly seems to be part and parcel of POL’s culture. You only
have to look at the Memos sent to SubPostmasters via the Horizon system. Practically
every other memo is an admission of incorrect information supplied or incomect
F/426/8
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Paragraph 10
There was absolutely no confusion on our (Myself and Shirley Owens) part. All
conversations took place with both of us present. The details of the conversation are
already documented in previous correspondence and demonstrate quite clearly the
contradicting advice given by Lottery Team and Helpline.
If there is any doubt, then please obtain the transcripts.
Paragraph 11
The £120 surplus should have appeared in the Balance Snapshot. The losses indicated
are due to faults with the Horizon system for which the legal action is being pursued.
If you are suggesting that the losses on the weeks in question does not indicate the
expected surplus is not incorporated within the net loss figure, then the issues with
Horizon are much more serious than previously thought.
Paragraph 12
On the basis that I followed procedure and instructions from POL and Camelot
and disposed of Lottery records after 6 months the current claim (if at all valid in
the first place) is null and void and I am not prepared to consider the claim any
farther.
1am prepared to consider albeit very reluctantly (because it will mean going
through Horizon slips for every single day for the last six months) any claim for
the last six months as I will haye the records and that only on the basis that you
supply me with the actual breakdown of every single scratchcard sold (which we
would have declared on Horizon and the number of scratchcards supplied by
Camelot.
Paragraph 14
The Transaction Correction was not correct to have been issued. Not enough thought
or understanding went into prior to the note being issued. Time and time again we
were told there was no money involved-it was merely a stock correction.
All monies due to POL (Camelot) have been paid. There is no money whatsoever due
to POL in this instance.
If there is a need for stock adjustment then that is between POL and Camelot NOT
between POL and Bowburn PO.
A further transaction correction now needs to be issued to reverse out the 4312 to take
us back to what we physically hold in the branch.
F/426/9
Bowburn Post Office
5 The Leazes
Bowburn
Co Durham
DH6 SAA
9” June 2008
Dear Michele,
Re: Bowburn Post Office
My name is Raj Bilkhu and I am the Sub Postmaster of Bowburn Post Office (BPO).
J assumed control of BPO on 31" January 2004.
During the first few months of trading, there were a few errors (mainly paper related)
and any shortages/surpluses were satisfactorily resolved.
However, in October 2004 Horizon system was upgraded in BPO and from there
onwards my losses started to increase at an alarming rate. There were no changes in
staff or procedures.
By the end of December 2007, I had paid over £10,000 to Post Office Ltd (POL) to
settle shortages and continue to trade.
In the intervening period, I tried desperately to seek the help and advice of the
Contract Manager, the Area Intervention Manager (who later became the Business
development Manager) and even members of NFSP. Other than suggesting the losses
were due to theft, none of these people helped.
I was left with no choice but to pursue legal action against POL.
The legal action was discontinued (with the option to continue to claim in future) due
an absurd counterclaim by POL to have the Cash Accounts for BPO examined by a
forensic accountant at a cost of £1 million! It has to be said that if the case had gone to
court, the claim would have been rejected purely on the basis that it was grossly
disproportionate to the sum being claimed by myself (£10,000).
Enclosed with this letter is a spreadsheet which is essentially a week to week
summary of cash discrepancies as generated by the Horizon system.. This is referred to
as ‘Amount system required to be made up’. The column ‘Amount Personally paid to
POL’ is exactly that: amount paid by me to POL to allow me to continue to advance
to the next Trading Period and remain in business.
The document also highlights incidents which are indicative of serious system and
management failures.
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To date my losses are as follows:
£ P
Personally paid by RSB to POL 10862 97
Legal fees and disbursements 6630 71
paid by RSB to his legal team
Legal costs paid by RSB to POL’s 5452 20
legal team to discontinue counterclaim
Total 22945 88
In addition to the above costs, I am also being pursued by POL for £4312 for Lottery
Scratchcards which date back to two years. (see Spreadsheet for details).
The key points are:
1) Conduct of the Contract Manager and Business Development Manager
I regard both of these key personnel to be in effect my senior line managers to whom I
look for help and support. Their conduct (see spreadsheet for details) have left a lot to
be desired. My repeated requests for a meeting with the Contract Manager to discuss
issues have been ignored.
2) Cash Account
During the litigation process, POL argued that because I had signed the Cash Accounts
that they were correct, I could not then come back at a later stage and then claim they
were not. Of course, at the time of signing they were correct-they have to be as every
SubPM and POL know perfectly well that any cash discrepancy has to be settled
before you may advance to the next Trading Period and continue to trade.
PS The BDM removed Cash Accounts from BPO for the litigation process and has
still not returned all of them to BPO.
F/426/11
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3) Calls made to Helpline
Also during the litigation process, POL submitted transcripts of all calls made from
BPO to the Helpline from the period in question (i.e. from 31° Jan 2004
onwards). When analysed closely these indicated quite clearly that over 90% of the
calls were directly related to issues with Horizon (hardware/software)and equipment
failures e.g. printers, pinpads etc. Very few calls referred to transactions or business
policies, These calls clearly demonstrated that we had very competent staff but were
being frustrated by poor equipment.
In February 2008, Terminal base station (the one which appeared to have caused
to most problems) was replaced by a Fujitsu engineer. It was removed from BPO
on the understanding that it would kept in a secure area at Fujitsu’s site in
Bracknell. The base station was sealed in a box before leaving BPO.
Since the replacement of the base station, we have had no issues or losses at BPO.
Our discrepancies amount to +/- £10-£15 which is well within acceptable limit for
a business which turns over tens of thousands of pounds every week. There have
been a number of Transaction Corrections during the period but we do not have
any issues with these TR’s as we understand them and know exactly how they
were caused.
By way of this letter, I now request that you nominate one of you Flagship
investigators to critically study the enclosed spreadsheet to see if my criticism is
justified and also arrange to have the offending base station kept at Fujitsu’s Bracknell
site be examined by an independent expert.
Please contact me if you need any further information.
Yours sincerely,
RS Bilkhu
F/426/12
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Our ref: FCT203/08 @
Mr Raj Bilkhu
Bowburn Post Office
5 The Leazes
Bowburn
DH6 SAA www postoffice.co.uk
11™ June 2008
Dear Mr Bilkhu
Thank you for your letter addressed to Adam Crozier, Chief Executive, Royal Mail
Group Limited.
Mr Crozier has asked that the issues you have raised are fully investigated on his
behalf and a full response will be sent to you as soon as these are completed.
Yours sincerely
Michele Graves
Executive Correspondence Manager
Post Office Limited
Post Office Ltd. Registered in England and Wales no: 2154540, Registered office: 80 - 86 Old Street, London, ECEV SNN.
Post Office and the Post Office symbol are registered trade marks of Post Office Ltd.
Fost Office Ltd s an appointed representative of The Governor and Company of the Bank of Ireland, which is authorised by the Irish Financlal Regulator and the Financial Services Authority:
{Eauated by the Financial Services Authority for the conduct of UK business. Bank of Irland, incorporated in the Republic of eland with limited lability, Registered in Enoland ana Wetec aith
‘branch number BROOO4S9.
Se herount offered by 2. Morgan Europe Ltd through Post Office Ltd. )P. Morgon Europe Ltdis authorised and regulated by the Financil Services Authority. Registered in England & Wales,
No. 938937. Registered Office: 125 Londen Wall, london EC2Y 5A).
F/426/13
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Our Ref: FCT203/08
Mr Raj Bilkhu
Bowburn Post Office® www.postoffice.co.uk
5 The Leazes
Bowburn
Co Durham
DH6 5AA
18" June 2008
Dear Mr Bilkhu
Thank you for your recent letter dated 9" June addressed to Adam Crozier, Chief
Executive, Royal Mail Group Limited.
The issues you have raised are being investigated but enquiries are taking a little
longer than anticipated, for which I apologise.
l assure you that a full reply will follow shortly.
Yours sincerely
Michele Graves
Executive Correspondence Manager
Post Office Limited
Post Office Ltd Registered in England and Wales no: 2154540. Registered office: 80 - 86 Old Street, London, ECIV NN.
Post Office and the Post Office symbol are registered trade marks of Fost Office Ltd.
Post Office Ltd is an appointed representative of The Governor and Company of the Bank of reland, which is authorised by the irish Financial Regulator and the Financial Services Authority,
regulated by the Financial Services Authority for the conduct of UK business. Bank of Weland, incorporated in the Republic of Weland with limited liability. Registered in England and Weles with
branch number BRO004S9,
Cord Account offered by 1. Morgan Europe Ltd through Post Office Ltd. }?, Morgan Europe Ld is authorised and regulated by the Financial Services Authority Registered in England & Wales 149.674 4
No, 938937, Registered Office; 125 London Wall, London EC2¥ SAI.
POL00001304
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Lill
e
Mr Raj Bilkhu
Post Office®, Bowburn branch
5 The Leazes www.postoffice.co.uk
BOWBURN
CO DURHAM
DH6 5AA
07 July 2008
Dear Mr Bilkhu
Thank you for your letter and enclosures dated 9 June addressed to Adam Crozier, Chief
Executive Royal Mail Group Ltd. Your letter has been forwarded to me for investigation
and reply on his behalf.
I apologise for the detay in reply but I wanted to consult with colleagues to better
understand the situation before responding.
As I understand it you issued proceedings against the business in November 2007 alleging
Problems with the Horizon system. As part of your evidence you supplied a document,
which is to ail intents and purposes, identical to that supplied under cover of your letter of
the 9 June except that the last entry was made on 7 November 2007. As you withdrew
your action upon receipt of our Defence and paid a contribution to our cost we are not
going to reopen the issues litigated as we consider this matter to be closed. There was
absolutely no option to bring fresh Proceedings in the future on the same facts. Once a
Court case is settled then there can be no further litigation over the issues disputed and
identified in those proceedings.
The basis of your claim was that Horizon was not fit for Purpose. As Horizon isa
computerised accounting tool both computer and accountancy evidence would be
required by you to prove your case. Post Office Ltd is fully aware of the costs of employing
such specialised experts, As you have formally requested the return of your Branch
Trading records I will arrange for this to be put in hand.
Once a subpostmaster has balanced and completed the Branch Trading Statement for
that period without seeking and obtaining special permission to hold items in suspense
the accounts for that period are closed. By completing the Branch Trading process you are
certifying that its contents are a true and accurate record of the Position within your
branch.
Post Office Lid. Registered in England and Wales no: 2154540, Registered office: 80 - 86 Olé Street, London, ECIV ONN,
Post Office and the Post Office symbol ae registered trade marks of Post Office Ltd
ceaerea tid on appointed representative of The Gaverno: and Company of the Bank of land, which is authorised by the rsh Financial Regulator and the Financial Series Authority,
ranch nue BRO ea ees Authority forthe conduct of UK business. Bank of kelan, incorporated in the Republic of Wear with imitedhabilty, Regtered In tonone aero with
‘branch number BROVOASS
aid Account offered by 1P. Morgan Europe Ltd through Post Office Ltd.1P. Morgan Europe Ltd is authorised and regulated by the Financial Services ‘Authority Registered in England & Wales
No. 938937. Registered Office: 125 London Wall, London EC2Y SAI.
F/426/15
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Page 2 of 3
Whilst I note the points you have raised with regard to your requests for a meeting, I have
been unable to find any record of a request for a formal meeting. I believe, however, that
you received a visit from a member of the training team in November 2005, and also
from your former Business Development Manager in an attempt to provide assistance
with balancing procedures and ongoing losses at your branch.
You have been offered additional training on the Horizon system, which I would
encourage you to take up, as it is important that laid down processes are followed exactly.
t also understand that a recommendation was made to you to move from having a single
stock unit that you refused. This would permit any possibility of misappropriation to be
detected and I would urge you to act upon this recommendation. Should you decide to
pursue this option or require any further assistance or training in relation to the use of
individual stock units, or on any other aspect of the Horizon system, please advise me in
which areas you require development and I will make arrangements for you to receive the
necessary training.
lam pleased to note that your difficulties with operating the Horizon system are now
under control.
Fujitsu have confirmed that:
(a) as they own all terminals they are not holding one in a secure area at Bracknell for
your branch
(b) (b) even if the terminal was still in existence it would not contain any of the
disputed data
and as such we are not going to conduct any investigation into the replaced terminal.
We are unable to comment on the information that Camelot have provided, however I
have confirmed with our Lottery Team in Chesterfield that records should be kept for a
minimum of two years. Due to system issues when branch trading was introduced it was
discussed and agreed with the National Federation of Subpostmasters that records would
be reviewed on a branch-by-branch basis, hence the delay in issuing Transaction
Corrections. I believe both our team in Chesterfield, and a Camelot manager, have spoken
to you previously regarding this matter.
Having reviewed the evidence supplied we believe there is no reason to revoke these
Transaction Corrections and, therefore, the amount is proper to be paid. I do recognise
that my reply will be disappointing to you but in light of the foregoing we consider this
matter closed.
Michele Graves
Flag Case Manager
F/426/16
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Bowburn Post Office
5 The Leazes
Bowburn
Co Durham
DH6 SAA
16" July 2008
Dear Michele,
Re: Bowburn Post Office
Thank you for your letter dated 7" July 2008.
Iam puzzled that document you received only goes up to 7” November 2007.
T enclose the missing pages.
At the outset I have to agree with your final sentence that I would find your reply
disappointing. I thought that by escalating the issues to the highest levels of
management I might have received a response based on a thorough investigation.
I know you consider the matter closed but your letter is full of inaccuracies and
innuendoes that you leave me no choice but to respond.
Legal Proceedings
Clearly there is a misunderstanding between the legal teams. The case did not go to
court as the counterclaim was discontinued. My legal team has informed me that the
claim can be brought again in the future subject to statutory limits. (Letter ex.Tolhurst
Fisher enclosed).
Meeting with the Contracts Manager
The request for a meeting with the Lesley Joyce was made on at least three occasions,
twice via Rachel Oysten BDM and once via NBSC. The first time the request was on
12" May 2005 after Rachel Oysten’s visit, the second was made in the presence of
POL auditors Mike Webb on 22™ September 2005 and my colleague Shirley Owens.
Each time Rachel Oysten clearly stated she would arrange a meeting.
I fail to understand how ‘formal’ one has to be to seek a meeting with one’s immediate
manager.
R Oysten’s conduct on 12 May 2005 was despicable. Both I and my staff were
humiliated by her and although I made a formal complaint about her via NFSP and to
Linda Rodwell in 2005 and then again to Andy Bayfield via my solicitor in February
2006-nothing was ever done.(Details are in the spreadsheet)
In any other moder organisation her conduct would have been construed as bullying
and harassment and at the very least would have resulted in a hearing.
F/426/17
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When Rachel Oysten came in to investigate the ‘Tesco Mobile’ incident Terminal 3
(see entry under 1 1" April 2007) on 22" May 2007 that was the only reason for her
coming to Bowburn Post Office. When I asked her again on 13 February 2008-she
denied all knowledge of the incident. When I reminded her that I gave her copies of all
Counter printers receipts-she said yes but they were copies! These copies were made
in front of her-she could have had the originals if she wanted. I believe she did nothing
to investigate that incident. Indeed 1 am now beginning to wonder if she ever relayed
my request for a meeting with Lesley Joyce and other requests e.g. I have specifically
asked her to for the Lottery Team to obtain sales figures. She was also to arrange for
individual stock balancing. (see below). I am still waiting. (Details are in the
spreadsheet)
© I left message for Rachel Oysten on 9" July 2008 via NBSC to confirm some of
the allegations in your letter. To date she has not responded.
Training
lam a firm believer in training. I have never ever refused training be it road shows or
in-house. I attended all road shows with the exception one when I was on holiday.
My colleague, Shirley Owens has worked in Bowburn PO for nearly 20 years. She was
trained in using the Horizon system.
Camelot offered training in Lottery (via a local college) in 2006, that was also taken
up and all staff including myself were trained to NVQ Level.
You state in letter that J refused training. Now, please tell me when and what was it
connection with.
For the record, I actually requested for trainers to come and oversee us to ensure that
we were following procedures correctly. Both trainers David Round (21% June 2004)
and David Oglive (30" November 2005) could not find anything wrong with what we
were doing.
On the subject of individual stock balancing, Rachel Oysten was again supposed to
arrange for trainers (see spreadsheet entry 16" May 2007) but as usual never got
around to doing it. To date I have not heard anything from her.
I would have done anything to cut down my losses and that included taking up ANY
training that was offered.
Audit
An audit of Bowburn Post Office was carried out by POL’s own audit team on 10°
June 2008.They found (taking aside the disputed Lottery element), the net cash
discrepancy of £31.53! Now this is hardly indicative of an office which is poorly
managed or the staff lack understanding or operating the Horizon system. On the
contrary it indicates a well managed office and competent staff. How many other
offices can come up with such discrepancies at an audit?
F/426/18
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The actions were non display of Banking Code and Data Protection Sheet and
emergency phone number for Hostage Policy. (all were not received by us-otherwise
they would have been on display).
Your remark about ‘difficulty with operating the Horizon system’ is patronising to say
the least.
Terminal 3 Base Station Removal
Terminal 3 base station, if you had cared to study the spreadsheet caused vast majority
of our problems. In fact as far back as late 2004 when the problems started, the then
Retail Line manager, Lesley Wilson even suggested that the easiest solution would be
to change the base stations.
On 13” February 2008 this base station disconnected itself whenever it was rebooted
Details of the sequence of events with the call references are under the entry for that
date. Basically the removal of the base station from Bowburn PO was agreed on the
basis that it would be kept at a secure site in Bracknell. These assurances were given
by POL’s and Fujitus’s representatives. The base station was boxed and sealed and the
Fujitsu engineer asked me to sign over the sealed tape on both sides.
Now where is that base station? Are you saying to me that the base station has been
destroyed?
You now say Fujitsu are not holding one at Bracknell and even if they were you are
not going to conduct any investigation into it.
The investigation FOR TRANSPARENCY needs to be carried out by an independent
expert. I only need you to recover the base station. It is not up to me or POL to decide
whether this base station was functioning correctly.
Camelot
Camelot is a well- managed and efficient organisation. I do no have any issues with
them. They are able to access information at the “press of a button”.
It was one of POL’s own trainers (John Wilson in 2005) who suggested that I need not
keep records for Lottery beyond 6 months. I rang Camelot on 10" March 2005 and
they confirmed that records need not be kept beyond 6 months, (You can contact
Camelot and they will confirm that conversation). Furthermore, I contacted the Lottery
team at Chesterfield on the same day and they confirmed that ‘if Camelot were happy
— so were they’.
You are now telling me that Lottery Team want records kept for two years. POL’s
own training manual (National Lottery Subsection 14, copy enclosed) tells a different
story. So when did the Lottery Team or POL change its mind when were ail the
Lottery outlets informed of the change?
F/426/19
Re: Outstanding Lottery Scratchcard Issue
Time and time again the Lottery Team, have been requested (directly to Paul Smith,
and via Rachel Oysten and via NFSP) that the only way to address this long ongoing
dispute is to obtain the exact number of scratcards supplied to Bowburn PO and match
them with the number sold as declared by. Bowburn PO via the Horizon system. Why
is such a request difficult?
* The audit team-on 20" June 2008 again discovered that there twas discrepancy
‘between the number of scratchcard packs activated on Camelot Terminal and.our
physical stock but because had all the activation slips, we were able to dispute the
discrepancy. The audit team accepted our evidence. ?
Yours sincerely,
RS Bilkhu
Outlining his Forward:Five2Eleven, strategy, Mr A COOK , MD clearly states under
“People”:
‘Our aim is for the Post Office to be an employer and partner of choice. We puta
great deal of emphasis in creating a good supportive working environment ‘for all Post
Office people, whether they are direct employees or agents, and this will continue. Our
vision is for the Post Office to increasingly become a business for whom people want
to work for and with’.
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Our ref: FCT203/08R
Raj Bilkhu
Bowburn Post Office
5 The Leazes
Bowburn www.postoffice.co.uk
Co Durham
DH6 SAA
23” July 2008
Dear Mr Bilkhu
Re: Bowburn Post Office
Thank you for your letter addressed to Michele Graves, Flag Case Manager, Post
Office Limited.
Mrs Graves has asked that the issues you have raised are fully investigated on her
behalf and a full response will be sent to you as soon as these are completed.
Yours sincerely
Eunice Kirby
Flag Case Advisor
Post Office Limited
Post Office Ltd Registered in England and Wales no: 2154540, Registered office; 80 - 86 Old Street, London, ECIV ONN.
Post Office and the Fost Office symbol are registered trade marks of Post Office Lt,
Post Office Lea 1s an appointed representative of The Govesnor and Company of the Bank of Ireland, which is authorised by the ish Financial Regulator and the Financial Services Authority.
fequlated by the Financial Services Authority for the conduct of UK business. Bank of ireland, incorporated in the Republic of Ireland with lirsted lability. Registered in England and Wales with
branch umber 88000459,
Card Account offered by 3 Morgan Europe Lid through Post Office Ltd 1P Moigan Europe Ld 1s authorised andl segutated by the Financial Services Authonity Registered in England & Wales
No. 938937 Registered Office: 125 London Wall, Londan EC2Y 5A),
F/426/21
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POST
OFFICE
Mr RS Bilkhu
Post Office® Bowburn branch www.postoffice.co.uk
5 The Leazes
Bowburn
Co. Durham
DH6 SAA
20 August 2008
Dear Mr Bilkhu
As the National Consultation Manager with responsibilities for managing the
correspondence for Alan Cook, I have been asked to review the issues raised in your
correspondence.
I have looked at all the enclosures you have submitted including the spreadsheet,
and have liaised with The Retail Line and Contracts Teams, who have provided me
with reports relating to your training and branch visits. In addition I have also
reviewed the information from Fujitsu, the Helpline and Branch Accounting in
Chesterfield.
If I may, I would like to address some of the issues referred to in your letter to
Michele Graves on 17 July.
You are correct that there are a range of retention periods for Lottery forms, and!
would advise that you continue to follow the instructions on retention periods as
outlined in the Operations Manual,
With regards to the base station, I can confirm that upon further investigation,
Fujitsu has revealed that they are still storing the base unit that was removed from
your branch. Please accept my apologies for any misunderstanding caused in
previous responses.
Turning to the legal proceedings, which were concluded in February of this year, the
evidence shows that you withdrew your claim following the submission of our
defence. Further to this withdrawal you also paid an award of costs to Post Office
Ltd. I think it is only fair to point out at this stage the advice I have been given from
our legal team in relation to this issue. Current advice suggests that should
proceedings be reissued, based on the same issues, Post Office Ltd will seek to have
the claim struck out and an award of costs made in its favour on the basis that it
would be an abuse of the court system to reissue identical proceedings.
Post Office Ltd Registered in England and Wales no: 2154540. Registered office: 80 - 86 Old Street, London, ECIV NN,
Post Office and the Post Office symbol are registered ade marks of Post Office Lt.
Post Office Ltd is an appointed representative of The Governor and Company of the Bank of Keland, which is authorised by the lish Financia} Regulator and the Financial Services Authority;
‘cegulated by the Financial Services Authority for the conduct of UK business. Bank of reland, incorporated in the Republic of treland with limited lability. Registered in England and Wales with
‘branch number BRO00459,
Card Account offered by 2P. Morgan Europe Ltd through Post Office Ltd. 1, Morgan Europe Lid is authorised and regulated by the Financial Services Authority, Registered in England & Wales 4.96/22
‘No. 938937, Registered Office: 125 Londan Wall, London EC2Y 5A).
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lam also concerned that the evidence indicates procedures in relation to processing
lottery scratchards were at some stage not being followed at Post Office® Bowburn
branch. You have been instructed to introduce activated scratchards into your
branch as a “Remittance In’. A letter from Andy Winn dated 15 November 2007
confirms the correct procedure and goes further by explaining the impact from an
accounting perspective of failing to follow the correct process. Please could you
ensure that everyone in your team is now following the correct procedures in
relation to lottery scratchcards.
Furthermore, as Michele Graves also mentioned in her letter of 7 July, it is
recommended that you move to individual stock units as these will allow you to
identify where losses may be occurring and help to recognise any necessary training
requirements. I do appreciate that the initial set up of the units will take a little time
and effort, however I would stress that there are longer term benefits that should be
taken into consideration. I do hope that you will give this some serious thought.
Having looked again at all the information provided, I do feel that we have explained
Our position on the matter and do not see any benefit to covering old ground. We
therefore consider this matter and all other issues related to it now closed and not
subject to further discussion.
In closing, I would like to assure you that as part of the forward: fiveZeleven strategy,
Alan Cook is committed to ensuring Post Office Ltd is an employer and partner of
choice, and will continue working towards achieving this goal. We will also continue
to work on identifying improvement opportunities to work in partnership with
subpostmasters. Moving forward, I can only urge you to put the issues relating to
your legal claim in the past, as we have done, and work with us to develop and grow
a successful business at Post Office ® Bowburn branch.
Philippa Wright
National Consultation Manager
F/426/23
Bowburn Post Office
5 The Leazes
Bowburn
Co Durham
DH6 5AA
27" August 2008
Dear Philippa,
Re: Bowburn Post Office
Thank you for your letter dated 20" August 2008.
I fully understand why you want the matter closed and also agree that we need to
move forward,
However, for future reference and to ensure there are no misunderstandings, I make
the following comments:
Ihave to assume from recent correspondence that Mr Croziet and now Mr Cook
have been briefed on my complaints and concerns and also your and Mrs Graves’s
Tesponses to them.
¢ Ido not believe that you or Mrs Graves have carried out an investigation. My
understanding of investigations (J carried out hundreds in my previous career in
the chemical industry) is somewhat different to what I have witnessed at the
highest levels of management in POL. Other than to confirm the existence of the
Terminal 3 base station, your letter follows the same ‘style’ as that of Mrs
Graves’s letter dated 7" July 2008.
¢ For reasons known only to yourselves and despite providing you with names and
dates, you have refused to comment on the issues and activities (or lack of) of Ms
R Oysten. I can only assume that you have decided to sweep the whole of Ms
Oysten’s episode under the carpet. I now know that nothing was ever done with
my complaints and concerns re: Ms Oysten.
* Lottery Scratccards Issue. As already mentioned in previous correspondence, this
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on-going dispute will only be resolved once a physical comparison of scratchcards
vs sales is made. I know for a fact that no money is due to POL. I know for a fact
that we have accounted for every single scratchcard sold and money tranferred to
POL every night. You mention A Wynn’s letter but you have clearly not studied
my detailed letters to A Wynn. Unless the Lottery Team or POL have something to
hide why & this comparison not be made?
Furthermore, even you and Mrs Graves cannot agree on the retention periods of
Lottery records. Mrs Graves in her letter says keep for 2 years-you say follow the
Ops Manual (which I have been doing). You do appreciate my difficulties,
F/426/24
oy
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Since the Terminal 3 Base station was replaced I have had no problems in
balancing. Other than settle a Transaction Correction (a paper related error) I have
not had to put any cash in personally to settle any discrepancies. So, nothing wrong
with my staff or procedures being followed at Bowburn Post Office. You and Ms
Graves make repeated references to individual stock units whilst ignoring the fact
that I have NEVER refused to introducing them-it was up to Ms Oysten to help us
do that!
As far as any future action (litigation or otherwise) is concerned, it would be up to
the legal fraternity to decide if there is an ‘abuse of the court system’. In the
meantime, I ask you, by way of this letter, to ensure the base station to be kept
intact at Fujitsu’s site at Bracknell for an indefinite period.
Thank You.
Yours sincerely,
RS Bilkhu
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yet pak oP op Ao Ne aS
F/426/25
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Our ref: FCT208/08 www.postoffice.co.uk
Mr Bilkhu
Bowburn Post Office
5 The Leazes
Bowburn
CO DURHAM
DH6 SAA
2" September 2008
Dear Mr Bilkhu
Re: Bowburn Post Office
Thank you for your letter of 27°" August 2008.
Your comments have been noted and will be retained on file at this office.
Yours sincerely
Philippa Wright
National Consultation Manager
Post Otfice id. Registered in England and Wales no: 2154540, Registered office: 80 - 86 Old Street London, ECTV ON.
Post Ofice and the Post Office symbol are registered trade marks of Post Office U6.
Post Office Ltd is an appointed representative of The Governor and Company of the Bank of eland, which is authorised by the lish Financial Regulator and the Financll Services Authority,
regulated by the Financial Services Authority forthe conduct of UK business. Bank of Ireland, incorporated in the Republic of Wreland with ited lablity. Registered in England and Weles with
branch umber BRODO4SS,
ard Account offeied by 1°. Morgan Europe Ltd through Post Office Ltd. 1, Morgan Europe Ltd is authorised and regulated by the Financial Services Authority, Registered in England & Weal
No, 938937. Registered Office: 125 London Wall, London EC2Y SAY. F/426/26
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POST
OFFICE
www.postoffice.co.uk
27 October 2008
Mr R Bilkhu
Bowburn Post Office
5 The Leazes
Bowburn
Durham
DH6 SAA
Dear Mr Bilkhu
Re Bowburn Post Office
Further to your enquiry to the Post Office Lottery team requesting an
investigation into transaction corrections relating to scratchcards dating
back prior to February 2008.
Full investigations were undertaken by the Lottery team and the
transaction corrections were proved valid to be issued, Evidence was
alongside activation.
You specifically requested an examination of your pre February 2008
Horizon base unit which has been put into storage. You have claimed that
this examination is central to the case you pursued against Post Office Ltd
which you subsequently withdrew. The action has been withdrawn and as
far as Post Office Ltd is concerned this matter is at an end.
Pont oftie Ltd Registered in England and Wales no: 2154840, Registered office: 80-86 Old Street, London, ECIV ONN,
Post Office and the Post Ortice symbol ave registered tae marks of Pont Gifs ud.
Post Office Ltd is an appointed representative of The Governor and Comnpany of the Bank of reland, which is authorised by the Kish Financlal Regulator and the Financial Services Authority
elated by the Financial Services Authority for the conductof UX bison fone land incorporated inthe Repub of keland with limited Habit, Registoeaie England and Wales with
branch umber BROOD4S9
Card Account offered by 1P Morgan Europe Ltd through Post Office Ltd. 1 “Motdon Eun Li's authorised and regulated by the Final Series Authority, Registered in England & Wales
No 938937, Registered Office: 125 London Wall, London EC2Y 500,
F/426/27
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@
www.postoffice.co.uk
Post Office Ltd’s position has always been that incorrect processes were
followed in the branch which was the cause of the transaction corrections
and not any fault with the Horizon system. Consequently Post Office Ltd
will not be examining the Horizon terminal.
1am sorry I am unable to support your request on this occasion.
Branch Analyst
Product & Branch Accounting
1 Future Walk
Chesterfield
S49 1PF
Post Office Ltd, Registered in England and Wales no; 2154540. Registered office: 60 - 86 Old Street, London, ECIV ON.
Post Office ond the Post Office symbol are registered trade rnarks of Post Office Ld.
Post Office Ltd is an appointed representative of The Governor and Company of the Bank of lreland, which is authorised by the Ish Financial Regulator and the Financial Services Authority:
regulated by the Financial Services Authority for the conduct of UK business. Bank of keland, incorporated in the Republic of Ireland with limited liability. Registered In England and Wales with
branch number BRODO4S9,
aid Account offered by 1P. Morgan Europe Ltd through Post Office Lid. }P. Morgen Europe Lid is authorised and regulated by the Financial Services Authority, Registered in England & Wales,
No. 938937. Registered Office: 125 London Wall, London EC2Y SA).
F/426/28
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Bowburn Post Office
5 The Leazes
Bowburn
Co Durham
DH6 SAA
2" November 2008
Dear Mr Wynn,
Re: Bowburn Post Office
Thank you for your letter dated 27" October 2008.
I was not expecting a letter from you because during the last few weeks I have been
having constructive discussions with Paul Smith.
I believe Paul Smith is a very competent and capable manger who is genuinely
interested in getting to the root cause of my problems at Bowburn PO, in particular the
Lottery Scratchcards issues. It was during these discussions that the examination of the
rogue Terminal base station surfaced.
Your letter is frankly a repeat of your previous letter and is similar in style to those I
have received from Michelle Graves and Philipa Wright (Flag Case Mangers for
Adam Crozier/Alan Cook).
In my letter to you (dated 6" December 2008), I explained in considerable detail re:
seratchcards. Clearly, you did not read or understand my letter because you continue to
focus purely on ‘procedural issues’ and that there is nothing wrong with Horizon
system.
There are hundreds of SubPostmasters across the country faced with the similar
problems to mine. We cannot all be wrong.
I have obtained from Camelot a list of the number of packs of soratchcards sent to
Bowburn PO. I have compared that list (from 20" March 2006 to 3" July 2007) with
the list sent to me by the Lottery Team. There is a discrepancy of 8 packs in my
favour-that is equivalent to £960. How do you explain that? ,
You comment on the legal case that I pursued and refuse to have the base station
examined as you consider the matter closed.
°
I do not propose to get into lengthy discussion re: case because it has been discussed at
Adam Crozier/Alan Cook level.
In summary, POL may consider the matter closed but I do not. According to my legal
team the case can be resumed subject to legal niceties.
In summary, the case was withdrawn because POL’s legal team demanded that
Horizon accounts at Bowbum PO for the last 4 years be examined by a forensic
accountant.The cost (estimated at £1 million) be borne by me.
F/426/29
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Clearly, this was not a case of establishing facts-more a case of legal blackmail.
It seems a sheer coincidence that my problems at Bowburn started in October 2004
when Terminal 3 base station was upgraded. They stopped when the base station was
removed in February 2008. This base station, I believe, sent over £12,000 of my life
savings into the Horizon blackhole.
Since February 2008, I have had no problems whatsoever. There have been no staff
changes or changes to procedures. Our monthly discrepancy is +/- £10-£15- a
perfectly acceptable figure, bearing in mind the business turnover.
You continue to restate ‘procedures not followed’ etc. yet fail to observe/follow your
own procedures,
On 10" March 2005 (embedded in Camelot archives), I was advised by POL and
Camelot that I need not keep Lottery records beyond 6 months. Your own Operation
Manual (details supplied previously) does not even mention 2 years. Even the
Flagcase Managers (highest level investigators!) cannot agree on the figure —one says
keep for two years the others says follow Ops Manual-which I am doing.
The only fair way to settle this dispute is to match the sales figure vs the no of
scratchcards supplied and have the rogue base station examined.
Yours sincerely,
RS Bilkhu
F/426/30
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Www Postoffice.co.uk
1 December 2008
Mr R Bilkhu
Bowburn Post Office
5 The Leazes
Bowburn
Durham
DH6 SAA
Dear Mr Bilkhu
Re Bowburn Post Office
Tcan only Tepeat that Post Office Ltd, of which Paul Smith is an
employee, Consider the matter closed,
Yours sincerely
Andy Winn
Branch Analyst
Product & Branch Accounting
1 Future Walk
Chesterfield
S49 1PF
post Office ta. Registered in England and Weles no: 2154540. Registered office: 89- ‘86.014 Street, London, Ec1V own,
ost Office and the Post Otic symbol ne ‘resistered trace marks of Post Office Li
Post Office Ltd is an appointed Feptesentative of The Governor and SoMPaNY ofthe Bank of elond, which i the nent Y the lish Financia Requtator and {ie Financial Services Authority,
regulated by the Fi Bonk of reland incorporated in the Republic of ireland with limite
Wabitty, Registered in Engiangram Wales with
RarG Account offered by 1. Morgan Europe Leg ona P08 Office t4a 3. Morgan Europe dis outhonsee and regulated by the Fintocil Services Authority Registered in England & Wa
No. 936937, Registered Ofce: 195 tender ‘Wall. London EC2Y 5a), “ Reeds rod & Maes
F/426/31
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ywburn Pi ice
Lottery Scratchcards Discrepancies
Background
Bowburn Post Office is among the selected Post Offices which can carry out National
Lottery transactions on behalf of Camelot. It can also sells National Lottery Scratchcards.
The incident below (under ‘Sequence of Events’) refers specifically to Scratchcards.
Scratchcards (in £1, £2, and £5 ‘denominations’) are delivered via a courier. Upon
delivery, the pack is opened and checked so that the contents agree with the barcoded
delivery slip. The value of each pack is £120. There are 120 cards on £1, 60 on £2 and 24
on £5 packs.
The delivery slip is scanned into the Camelot Lottery Terminal (situated on the retail side
of the business). The packs of scratch cards are then stored in a secure area behind the PO
Counter.
When a pack of scratchcards is required for sale, it is scanned on the Camelot Terminal to
‘activate’ it. The number of cards activated is then remmed into on the Horizon System
(PO side).If for some reason, the pack is not activated or remmed into Horizon System,
then Shirley Owens (Counter Clerk-20+ years experience) ‘adjusts stock’ on Horizon
system on a regular (weekly) basis so the number of cards currently active (on sale on the
retail side) matches what is on the Horizon system. That is what we were led to believe-as
we adjust stock with other PO items e.g. stamps stamp books etc. we did not think
adjusting scratchcards this way would create problems. No training has ever been given to
us on the Lottery side.
.
As the Lottery Terminal is situated on the retail side, all cash taken on the retail side is
placed into a common till on the retail side. At the close of business everyday, two reports
are generated: one for On-Line Lottery and one for Scratchcards.(see Appendix 1). A
simple calculation is carried out to separate the cash due to the PO (i.e. Camelot) and that
due to the retail side. The money owed to the Post Office is transferred every day at close
of business.
We have never knowingly had any problems with Lottery or Scratchcards and cannot
recall any Transaction Corrections in the past.
Sequence of Events
On 20" August 2007, Shirley Owens (Counter Clerk) was contacted by John Day from
Lottery Team stating that they had been looking at our Lottery records for the last two
years and there were discrepancies in scratchcards activated vs. remmed in. He insisted
that it was simply a ‘stock adjustment’ that was required.
S Owens informed RS Bilkhu the following day and RSB immediately rang John Day and
stated that for a start of it was unacceptable for POL to go back 2 years because RSB had
checked and confirmed with BOTH Camelot and POL over two years ago that Lottery
records need only be kept for 6 months. Why now were they dragging in Transaction
Corrections for which RSB would not be able tedispute.
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John Day insisted again that there was no money involved-that it was merely a ‘stock
adjustment’. RSB said ‘send me the paperwork and I’ll have a look at it’.
On 28" September 2007, a 17 page report (mainly listing) arrived from John Day. RSB
looked at the final figure on the last page which stated 4317.
RSB rang J Day immediately and quizzed him about this figure and whether this was the
amount in pounds that RSB was expected to pay. J Day replied again that no it was
merely a stock correction and at the most the cost would be a penny.
Discussions continued over the next few days between S Owens /RS Bilkhu and Jobn Day
to ensures! at we all understood clearly how this discrepancy might have arisen.
It is possible, at times, scratchcard pack may have been ‘activated’ but not ‘remmed in’.
However, whether a pack had been remmed in or not, the Post Office (and Camelot)
received what was due to them each every day as described above. Nobody has lost out.
‘And also as described above S Owens keeps a check to ensure the number of scratchcards
on Horizon matches what we have physically on sale. It is not often ‘stock adjustment is
required because S Owens is in three days per week and keeps a check on stock.
Now, whether there was a stock discrepancy or not, the fact remains that the correct
amount due to Camelot/PO was transferred AND logged on Horizon with details of the
scratchcards sold and prizes paid out etc. (Appendix 1 refers). This has to be the case
because:
a) we cannot recall having any TR’s re: Lottery
b) we should have had an increase of £120.00 on our Balance Snapshot every time a
scratchcard pack had gone astray. We have not. In fact, as Appendix 2 (this is summary of
the 17 page report that J Day sent but only picks up the dates in question) illustrates, on
the dates in question Bowburn PO balance Snapshot figure is a negative in all but four
cases.
‘Transaction Correction
John Day finally sent the TR on 1 i” October 2007.RSB did not accept it until the 12"
October due to uncertainty in what effect it might have on the balance. By accepting the
TR, it increase the number of scratchcards held by the Horizon system (515) to 4832!
RSB was horrified by this and thisexactly what RSB had been trying to explain to J Day.
This now meant that on Balance Day, stock would be adjusted and the by adjusting the
scratchcards to the physical level i.e. about 500, the system would be looking for £4317!
That is what RSB would be expected to put in to rollover to next Trading Period! This
was all explained to J Day but he continued to insist that it was just a stock transaction.
John Day said that the only way to address this was to ‘reverse’ the original adjust
Stock increases.
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RSB rang the Helpline on 16" October 2007 at 12:40 (Balance Day-Branch Trading
Period) to seek help and advice to address what was now clearly a serious problem-if RSB
7 corrected the Horizon held stock of scratchcards-Bowburn PO would close the following
day.
At 12:40 RSB spoke to a Sandra on Option3. She said that as it was a ‘credit? TR I should
simply take £4317 out and keep it! I said to Sandra that it was not as simple as that. She
said she would get someone to ring later.
RSB rang later and spoke to a Neil. Neil explained that as it was a credit it would increase
the stock value and I would be expected to pay £4317.
Maureen from Helpline rang later and initially agreed with what Sandra had said i.e. ‘take
out cash-it’s yours’ but when I explained the implications of the Balance Report, she
agreed that I would have to pay.
My final discussion (also with S$ Owens participating) took place with Paul Smith ( John
Day’s Line Manager. This discussion went on for a good hour and all of the above points
were explained to Paul viz. nobody has benefited from this, all parties concerned have had
the cash where due as all scratcards sold are accounted for at the end of the day and cash
transferred. If there had been a surplus, it would have been highlighted by an increase in
cash on our Balance Snapshot.
1 suggested to him that all accounting systems had to have a debit/credit. All they had
given me was the debits. To address this correctly, what the Lottery team needed to do was
to obtain the sales figures and match them with the cash declared and transferred by
Bowburn PO.
Paul said that they were unable 'to get those figures! RSB was astounded by this
statement.
In the end Paul did say that he would investigate further but in the meantime it was agreed
that the figure on Horizon would remain unchanged so that it would allow RSB to
tollover to the next period.
RSB was contacted by a Rebecca from the Lottery Team on 24" October 2007 After
about five minutes Rebecca declared that she was not supposed to ring me she was to ring
some other Post Office but my number had popped up on her screen!
¢ Also on 24" October 2007 RSB rang Camelot and spoke to Elena, Elena was
able to confirm RSB’s query on 10" March 2005 re: how long Lottery records
need to be kept. She confirmed that they had advised RSB that records need
only be kept for 6 months as claims by customers were not entertained after that
period. RSB made the same query to POL at Chesterfield on that day (10°
March 2005) and they said if Camelot were happy so were they.
© An audit was carried out on 22™ September 2005 when I was forced to pay
£3503-59 to POL to stay in business, Why did not the audit team pick these up?
Apes G2 Pos aon person s "
F/426/34
THE NATIONAL LOTTERY
ON-LINE SUMMARY
Topay
THUZS OCT @F 17:22:22
RETAILER NO. 260527
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SSSONSSESNOG AL
LOTTO
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SMAS GANE
LOT EXTRA
HOTPICKS
OLY PLAY
DREAM NUM
VOUCHERS
PROMOTION
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-
COMMISSION
SUB TOTAL
Ge ts Ph th th Be mm th te th tnt
EUROMILLIONS SUMMARY
5S SALES 2
@ CANCELS
1 PRIZES
EST. COMMISSIONS £
EST. BALANCE £
Bith th
TOT. EST. BALANCE £ Pa.
VOID NOT FOR SALE
a
kg
Be
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POL00001304
POL00001304
Acppomdix I
INSTANT SunMaRY
TODAY
THU2ZS OCT OF 17:21:38
RETAILER NO. 2ea62>
@ SALES 2.08
? PRIZES £ —59.@e-
RETURNS £ 8.08
COMMISSIONS £ 68
BALANCE = £59. aa
298-08993678-07297
VOID NOT FOR SALE
Post Office Ltd.
Your Receipt
Bovbu
5 The Leazes
borne”
County urbe
6
UAT REG No. 243 1700 02
25/10/3007 17239
SESSION 5-2076134-1
DUPLICATE
Mat lot sase
110) e180 110.60
Wat Tot cane
Wt a 1.50 18.58
Instents £5
1 e 5.00 5.00
Fibs ants 2 2.00 76.00
0 5
Instants #1
25 e 1.00 25.00
Wot lot cash pze
1- @ 108.19 108, 10-
124.40
124.40
0.00
TOTAL DUE To Past oFFIcE
Cash A 1
BALANCE mee cosTeneR
Phrw as ro } oq
Thank You
F/426/35
POL00001304
POL00001304
National Lotte ratchcards Camelot Horizon Discrepancies vs. Bowburn PO
Balance Snapshot Discrepancies
DATE DIFFERENCE I Bowburn Post Office Notes
Cash Discrepancy (£)
06-09-2005 120 -2528.95
23-09-2005 240 -2912.06 Audit carried out on 22” Sept
2005.Was forced to pay £3501-
59.Why did not the Auditors pick
up any discrepancies in
Scratchcards?
10-10-2005 240 ~185.92
17-10-2005 120 185.92
26-10-2005 120 -185.92
4 01-11-2005 120 27.47
{ 10-11-2005 120 62.39
i 14-11-2005 120 -183.19
30-11-2005 120 -183.19
08-12-2005 120 -25.51
; 19-12-2005 120 417.94
23-01-2006 120 -217.99
27-02-2006 120 -348.85
13-03-2006 120 4.88
22-03-2006 120 7285.46
28-04-2006 120 -162.84
08-05-2006 120 -162.69
23-05-2006 120 -323.45
12-06-2006 120 AAL
06-07-2006 120 -82.44
26-07-2006 120 364.32
25-08-2006 120 ~24.00
17-10-2006 120 152.81
14-11-2006 120 +128.00 Error in inputting Xmas stamps-
corrected
06-12-2006 120 -117.76
11-01-2006 120 -169.03
05-03-2007, 120 +33.62
30-03-2007 120 +33.62 Gain due to error in stamps
25-04-2007 120 -82.41
31-05-2007 120 -60,82
21-06-2007 120 -101.97
09-07-2007 120 -75,65
F/426/36
POL00001304
POL00001304
. . - National Lottery
P .
: ‘etention period of forms App<13 ¢ “ 3 Subsection 14
’ 14 Retention period of forms
tem Description Retention period
Five - part form (showing the number of unactivated full packs of 6 months
Scratchcards to be collected by Securicor/Omega)
- On-line terminal cancellation Feceipt (and cancelled ticket) 210 days
Ondine terminal Pay authorisation feceipt (and winning ticket for 180 days
under £500 paid in cash)
Remittance in slip (for activated scratchcard packs entered on year
Horizon) ¥
suction efi Until all activated
Scratcheards activation slip are sold
. Pay authorisation receipt (and attached prizewinning 180da
scratchcard) us
P4802 Onine game daity money transfer form 6 months
P4803 instants reconciliation form 6 months
P4804 instants money transfer form 6 months
RS1 Monthly Stock Returns form 2years
‘
j
ny
© Post Office itd Page 63
Version 3 March 2005 Operations Manual
neeeeeeeneeeee F/426/37
8e/92b/4
POL00001304
POL00001304
7: Appasdis 4
e @sowourn FAD
08:37 12/10/2007 -
processed Transaction Corrections Report - Office Copy
Date Date Outcome keference Credit/ Affected Settlement Amount Quantity Client
Received Processed . Invoice Product Product Reference
4317 CAMELOT
1666012542007 CRM — Instants £1
SLY SENT FIGURES) TRANSACTION CORRECTION ISSUED IN RESPEC? OF NATIONAL
MELO? ACTIVATIONS SHOR In PoundsS8&00 WHILE HORIZON CLIENT REM IM TOTAL in
IFPERENCE, In Pounds4317.A STOCK
£60
LL/10/07 12/10/07 Sto
AS DISCUSSED WITH CHESTERFIELD (AND AS PER PREVIOU
LOTTRRYSCRATCHCARDS. GETWEEN 28/06/05 TO 16/08/07 ©
Peunds64483.ONCE THE CORRECTION IS ACCEPTED THE STOCK ON HORIZON WILL INCREASE
SDIUSTMENT MAY BE REQUIRED AFTERWARDS TO BRING THE STOCK INTO BALANCE. JOHN. DAY!
++= END OF REPORT ***