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POST OFFICE GROUP EXECUTIVE
Post Office Response to Second Sight’s “Thematic Issues”
1. Purpose
The purpose of this paper is to:
1.1. update the Post Office Group Executive on Second Sight’s “Thematic Issues”
and what Post Office has done to address these.
2. Background
2.1. In recent years a small number of postmasters have through the Justice for
Subpostmasters Alliance (JFSA) alleged that Horizon was responsible for
discrepancies in their Post Office branch accounts causing them detriment
including the loss of their business and in some cases imprisonment.
2.2. To address these concerns, in June 2012, and in collaboration with the JFSA
and a group of MPs led by the Rt Hon James Arbuthnot MP, Post Office
appointed independent forensic accountants, Second Sight Support Services
Limited (Second Sight), to investigate.
2.3. As Second Sight (SS) discussed with the former postmasters their concerns,
they concluded that there were common issues being raised by the former
postmasters; SS started to document what they called “Thematic Issues”.
Following a years work with a number of postmasters, Second Sight
published an Interim Report on 13 July 2013 in which they referred to these
“Thematic Issues”
2.4. In August 2013 Post Office established the Initial Complaint and Mediation
Scheme (The Scheme) in order to provide an avenue for any postmasters
with concerns to raise them directly with Post Office. SS has maintained their
“Thematic Issues” report and further populated with the issues of the 150
Applications that were accepted into the Scheme. Second Sight’s “Thematic
Issues” report details 17 “Thematic Issues”
3. Current Situation
3.1. As Post Office has investigated each of the 150 Applications to The Scheme,
the findings and potential improvement opportunities have been cross
referenced with SS “Thematic Issues” report.
3.2. Of the 17 “Thematic Issues” documented Post Office conclusion is that:
e 9 were due to user error;
° 2were due to fraud;
e 4 were due to lack of awareness of the postmaster and/or their staff;
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there was no evidence to support the issue raised for 1 of the “Thematic
Issues” raised.
training and support issues were claimed by 130 Applicants to have been an
issue and whilst our investigations have found that in the main training was
adequate and was provided to the business standard at the time, we could
have done better in some cases and in areas such as ATM and Lottery.
4. Improvements to Date
44.
As a result of our investigation process and in conjunction with the Branch
Support Programme we have already introduced improvements to address
the “Thematic Issues” and/or have identified further improvement
opportunities. These are set out fully at Appendix 1.
User error — to mitigate the risk of user error within branch we have for 6 of
the “Thematic Issues” already introduced improvements. For 7 of the
“Thematic Issues”, further improvement opportunities have been identified.
Fraud — the 2 “Thematic Issues” detailed are False Accounting and Pension &
Allowance reintroduction fraud. Improvements have already been introduced
to raise awareness of False Accounting and to offer support to postmasters at
the earliest opportunity. Pension and Allowances were replaced by POCA.
Lack of awareness — in 3 of the 4 “Thematic Issues” improvements have
already been made to raise awareness with and improve the understanding of
the postmaster. Further improvement opportunities have been identified for all
issues raised.
No evidence to support — this is where postmasters have claimed they were
not aware of the terms of the Spmr contract they entered into and/or had
never received a copy of that contract. Although there is no evidence to
support this claim, improvements to raise awareness of the terms of the
contract have been implemented.
Training and Support — improvements to the training offer have been
introduced in recent years to reflect the new Mains and Local operating
models. Further improvements have been made to classroom training content
with online training going live 5" February.
5. Key Risks
5.1.
5.2.
Whilst through the investigation of the 150 Scheme Applications Post Office
has demonstrated that Second Sight's “Thematic Issues” are not thematic but
in the main simply a collection of the errors the Applicants have made, there is
a risk that Second Sight will draw different conclusions and be damning
towards Post Office in the publication of their final Part 2 which is scheduled
for April 2015.
In order to mitigate this risk, the Sparrow team is working very closely with
Second Sight to try to inform the content of the report by providing factual
information to Second Sight on the topics they have identified. Furthermore a
robust and well-articulated communication strategy is wrapped around The
Scheme.
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6. Conclusion
6.1. Through the work of the Branch Support Programme and the outputs of the
Mediation Scheme Investigation team the “Thematic Issues” raised have all
been addressed by Post Office. Second Sight has as evidenced by the Select
Committee evidence session on 3 February chosen to ignore or not believe
Post Office investigation findings or the formal responses Post Office has
made to Second Sight’s questions.
6.2. Given 6.1, the Sparrow team need to continue to engage Second Sight in the
content of their final Part 2 report with a view to ensuring its factual accuracy.
7. Recommendations
The Group Executive is asked to:
7.1. note the update on Second Sight’s “Thematic Issues” and what Post Office
has done to address these.
7.2. receive a further update ahead of the publication of Second Sights final Part 2
report scheduled for end April 2015.
Kevin Gilliland
12" February 2015
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Appendix 1
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Post Office Response to Second Sight’s Thematic Issues
Issues identified
by Second Sight
Number
of
Cases
that cite
this
issue
Post Office Findings
Improvements
to date
Further
improvements
Transactions or
transaction
corrections not
entered by the
postmaster or staff
51
No evidence of remote
access. All claims of
‘ghost’ transactions
have been explained
in POIRs: enforced log
out from Horizon;
Horizon change
request in train
for auto-reversal
as part of
recovery
process to be
Once Horizon change
request is completed,
this change and
horizon recovery
process refresh
communication to be
User Error Operator error stated as such _I published in Subspace
supported by receipts I on the online and Branch
and recovery screens. I transactional Focus to ensure
log, rather than I awareness.
the User ID.
This will remove
any confusion
for the
user/postmaster
Transaction 39 PO investigation has Simpler advice notes
anomalies identified user error in are required to ensure
associated with all cases. Given that alignment between the
CASH or STOCK there is no information on the
Remittances reconciliation between advice note and the
Swindon and branches Horizon system i.e.
this could mean that value or volumes the
User Error discrepancies in same as Horizon
remittances have gone requirements. Scope
unnoticed resulted in a the cost and benefits of
loss or gain at branch. introducing: (1)100%
check for new
branches/operators for
a fixed period. (b)
100% check for all
remittances into
Swindon.
Transaction 15 Scheme cases None as P&As NA
anomalies investigated have were replaced
associated with shown branch by POCA
Pensions and fraudulent activity. several years
Allowances ago.
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Transaction 59 A loss of The Horizon A network wide
anomalies telecommunications or I recovery communication is
following power in branch will process has required to ensure that
telecommunication not directly cause been re- postmasters
or power failures
discrepancies. This is
dependent on the
postmaster correctly
communicated
to branches in
Branch Focus.
understand that power
failures and loss of
connectivity in
User Error following the Horizon themselves cannot
recovery process on cause discrepancies.
the screen. A lack of
understanding of the
recovery process was
found in the earlier
cases in particular.
Transaction 34 POIRs detail a number I New operator (1)Post Office to
anomalies of postmasters did not I guide was monitor via HORIce
associated with follow PO procedures issued to ATM that all ATMs have
ATMs. Stock user
correctly. Not having
branches in Feb
separate stock units
management. individual ATM stock 2013. and that they are called
units exasperated the Introduced Post I the same to enable
in-branch issues. Office delivered I filtering by HORIce.
User Error on site training (2)ATM on line training
for all new to be developed; go-
ATM's installed. I live Q1 15/16.
TC's issued (3)Scope whether on-
more timely. line link to horizon
(PING) is possible.
(4)More user friendly
issue resolution
process between POL
and postmaster to be
introduced. (5) Easy to
understand reports
from BOI. (6)Ensure
knowledge base at
NBSC is up to date and
regularly reviewed.
Transaction 39 POIRs show that PING 2012 Mandatory stock unit
anomalies scratchcards activation I addressed for Lottery. Clearer
associated with and rem in process lottery sales and I instructions regarding
Lottery Terminal or caused problems for Scratchcard scratchcard TC's to
Scratch Cards branches. Branches activations TCs. I cover both parts of the
would probably have Post Office transaction Auto rem
benefitted from face to I introduced in/activation. Ensure
User Error face training. policy of face to I knowledge base at
face training to NBSC is up to date and
be provided with I regularly reviewed. On
lottery and line training module for
scratchcard Camelot products to be
network developed; go-live Q1
extensions. 15/16.
Transaction 14 Time expired as MVL
anomalies discs no longer used.
associated with
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MVL
User Error
Transaction 21 Other than for one Bureau de
anomalies case in the Scheme change 2nd
associated with that involved receipt
Foreign Currency postmaster selling at introduced
unauthorised 19/09/2014
User Error exchange rates, since which
POIRs evidence user point no charge
error. backs have
been to
postmasters.
Transaction 53 Problems with Rem Horizon change I Further work required
anomalies out cheque process request in train to scope ways in which
associated with were due to user error. I for automation the risk of mis-keys can
Bank/GIRO/ Giro deposit errors of cheque rem be mitigated.
Cheques were due to mis-key out process. Go-
errors by users. live May 2015.
User Error
Transaction 41 Stamps Rem in initiative
anomalies Philatelic/definitive barcode sheets of
associated with move from one to stamps. Labels - better
Stamps, Postage other. Postage labels - instructions to be
Labels, Phone rejects/spoilt lack of communicated to
cards or Premium understanding network.
Bonds difference.
Phonecards not an
User Error issue isolated user
error.
Hardware issues 75 Lack of understanding Need communication to
e.g. printer of what hardware explain functionality of
problems, PIN functionality/capability. hardware and that
pads, touchscreens hardware problems in
and Pay Station themselves cannot
cause discrepancies.
Lack of awareness
Failure to follow 81 Whilst some HORICce tool has I Customer satisfaction
correct procedures
or mis-advice by
POL'S Helpline
Lack of awareness/
understanding
Applicants have
claimed wrong advice
from the NBSC there
is no evidence of this
in the call logs. That
said the Operator can
only respond to the
caller's explanation of
the problem and where
the explanation offered
by postmaster is poor
this could lead to
inaccurate advice
being given by NBSC.
been trialled
with tier 2 and
the results are
favourable in
being able to
look at branch
data to establish
what the branch
has actually
done rather than
rely on the
branch relaying
this information
to NBSC
operator.
metrics to be
introduced by NBSC
and hardwired into
performance scorecard
for NBSC. More
information on the call
log is required
especially when
recording the advice
given to the branch.
HORICce user licences
to be extended so that
more operators are
equipped with the tool.
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Training and 130 Claims of lack of Work aids On-line training for new
Support issues training at various reviewed and entrants goes live Feb
including Helpline stages. PO refreshed for 2015 with a network
and Audit investigations have new entrants. wide roll out in Q2
found little evidence of I Escalation 15/16. New HORIce led
lack of training across I approach for support approach to be
the 130 cases rather balancing formally introduced Q1
that Applicants were related issues 15/16.
adequately trained at has been
appointment but that refreshed to
some chose not tobe I ensure the flow
hands on choosing of appropriate
instead to rely on their I referrals from
staff. NBSC to Branch
Support team
and the field
team where
necessary.
Limitations in the 73 Postmasters claim of HORICE - 6 More emphasis on
Transaction Audit lack of paper trail months data balancing and the use
Trail available to however since the of in-branch reports
Subpostmasters introduction of Horizon included in new training
postmasters have had package - go-live Feb
access to in-branch 2015. Self-help via on-
Lack of awareness reports for up to 42 line training modules
days after the and ‘how to' videos.
transaction. This was Network wide
extended to 60 days communication
on the introduction of required to raise
Horizon on-line. awareness of the
reports that are
available in branch and
how to use them to
best effect.
Process issues at 78 Applicant's claim of NBSC now have I More emphasis on
the end of each
Trading Period
Fraud
having to falsify
account in order to
trade the next day is
incorrect. Some
Applicants appear to
have been or claim to
have been not aware
of the in-branch
reports available to
them to search for
discrepancies. PO
investigations have
evidenced that some
Applicants chose not
to seek help from.
NBSC or any other PO
facility.
access to
HORIce that
enables them to
look at branch
data and see
what the branch
has done. This
results in the
correct advice
being given to
the branch
rather than the
NBSC relying on
what the branch
tells them
they've done.
balancing and Branch
Trading included in new
training package - go-
live Feb 2015. Access
to HORIce to be
embedded into NBSC
BAU.
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The contract 63 Scheme applicants The extracts of Contractual obligations
between the Post claim they didn't the contract regarding misuse of
Office and realise the terms of the I regarding Post Office cash and
postmasters contract. PO responsibility for I false accounting will be
. investigations cash and stock included in new entrant
No evidence conclude that and misuse of _I training - go-live Feb
applicants did receive I PO funds is 2015. Refresh of
contract and in all explained during I contractual
probability understood I interview responsibilities
the terms as they had process and throughout PTV
worked within those PTV visits
terms for a
considerable time
before claiming lack of
awareness.
The lack of an 97 SS claim that some Introduced a To introduce a
outreach Applicants had an refreshed Mediation Scheme type
investigations expectation beyond escalation investigation process
function Post Office contractual I process from into BAU. Need to
obligation in that they NBSC to Branch I formalise FSA report
Lack of awareness expected someone to I Support for visits etc. and offer the
go to branch and find large or opportunity to
their discrepancy or unexplained postmasters for a face
tell them where the losses or where I to face meeting to
money had gone. branches share the findings and
request support. I improvement
If NBSC or opportunities. HORIce
Branch Support I to be an integral part of
is unable to this process.
resolve an
onsite visit is
arranged.
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