POL00024323 - Post Office Group Litigation Steering Group Meeting - Noting Paper: Deloitte Reports

Evidence on official site

POL00024323

POL00024323
CONFIDENTIAL AND LEGALLY PRIVILEGED
POST OFFICE GROUP LITIGATION WOMBLE
BOND
Steering Group Meeting: 3 November 2017 DICKINSON

NOTING PAPER: DELOITTE REPORTS

41. BACKGROUND

14 Post Office engaged Deloitte to investigate certain of the allegations made by the Claimants in
the Group Action that pertain to the reliability of Horizon.

1.2 Deloitte has produced two reports:-
1.2.1 a "Main IT Report", which covers the following work:-

(a) an analysis of transaction logs to establish whether any discrepancies were
caused by "bugs",

(b) areview of the use of Balancing Transactions to independently confirm that
Horizon records the number and circumstance of their use; and

(c) an assessment of the Claimants’ allegation that discrepancies have been caused
by Post Office / Fujitsu personnel remotely accessing branch accounts and
adding / deleting / changing transactions without the consent / knowledge of a
postmaster.

1.2.2 a report which deals with the Claimants’ allegations that Post Office operated one or
more suspense accounts in which it held unattributed surpluses, including those
generated from branch accounts, and that after a period of 3 years such unattributed
surpluses were credited to Post Office's profits, meaning that Post Office stood to
benefit and/or did benefit from apparent shortfalls wrongly attributed to the Claimants
which did not represent real losses to Post Office.

2. CURRENT STATUS AND NEXT STEPS: MAIN IT REPORT

24 The Main IT Report has been reviewed by Post Office (Mark Underwood) and Womble Bond
Dickinson, and Deloitte is currently reviewing some amendments and comments. An updated
version of the report is expected to be made available on Thursday 2 November.

2.2 The current draft report reaches a conclusion that it is extremely unlikely that there is a problem
in the way Horizon records and stores transaction records. We note however that this is a highly
technical report, subject to caveats and limitations in the way that any sophisticated report might
be. It also does not cover the whole Horizon system, just that critical element around the
accurate recording and storage of transaction data.

23 Once the final report is received it will then be shared with Rob Houghton, to ensure that Post
Office is comfortable with Deloitte's work and conclusions from a technical perspective.

3. CURRENT STATUS AND NEXT STEPS: SUSPENSE ACCOUNTS REPORT

3.1 The Suspense Accounts Report has been reviewed by Post Office (Mark Underwood) and
Womble Bond Dickinson, and Deloitte is currently reviewing some amendments and comments.
An updated version of the Suspense Accounts Report is expected to be made available by close
of business on Friday 3 November.

3.2 The current draft reports concludes that an unusually high number of Post Office personnel have
the access rights to post entries to the relevant accounts and that the monthly probity checks that
are carried out in relation to such postings are not robust. However, Deloitte has established that
it should be possible to establish whether or not Post Office benefitted in the way alleged by the
Claimants (paragraph 1.2.2 above) on a branch by branch basis by reviewing the relevant

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transaction data. In due course and if necessary we are likely to suggest that such an exercise
should be carried out in relation to a small number of Claimants for reasons of proportionality.

3.3 Once the final report is received, it will be shared with Al Cameron for comment.
4. NEXT STEPS
44 Once the Reports have been reviewed and approve by Post Office, they will be passed to:

4.44 Counsel on the Group Litigation to assess the impact on Post Office's legal position;
and

4.1.2 Brian Altman QC, to determine whether Deloitte’s work creates a sufficient legal basis
to support future prosecutions.

4.2 Further actions will then be brought back to the Steering Group for approval.

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