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Initial Complaint Review and Mediation Scheme
Post Office Investigation Report
Branch Name: South Branch Code: 0929042 Case Number: M035
Warnborough
Applicant Name: _I Josephine Status of Case: I Mediation Date of ‘Oct 2003
Hamilton Application Appointment:
Executive summary
South Warnborough Sub Post Office was in a semi-rural location, the Post Office formed part of a general store
and coffee shop and operated Monday-Saturday 9am-1pm.
The Applicant worked in the branch from December 2001 as an employee of the former agent Alwyn Stacy,
until Ms Stacy’s death in 2003. The Applicant became the Sub Postmaster in October 2003. Following an audit
in March 2006, a loss of around £36,000 was discovered. After investigation, the Applicant's position as Sub
Postmaster was terminated; she was prosecuted and ultimately pleaded guilty to false accounting.
In her CQR, the Applicant has principally put forward two "unexplained" issues that she alleges evidence that
there are flaws in Horizon that would explain the losses in her branch.
Issue 4: report discrepancy
The Applicant has submitted evidence in her case questionnaire that relates to an error in December 2003.
This is outside Post Office period of retention (Doc 007 refers) so we are unable to examine the transaction in
any further detail. However the Applicant claims the error arose on the 23? December 2003 and the evidence
she has submitted relates to the following week the 30" December. It is also worth noting that the evidence
she has submitted, claiming to prove that there is a fault in the system, are two separate reports. The first
report is a Balance Snapshot and the second is a trial balance. The Balance Snapshot is a report generated by
the Horizon system that shows what should be on hand in the branch as a result of the transactions processed
in the branch. The trial balance is a report produced after the operator has entered on Horizon the amount of
Cash, Stock and Stamps they actually have on hand in the branch. Thus, there could be a balance difference in
the two reports if the amounts declared by the Subpostmaster do not match the amounts that Horizon
requires to be on hand in order for the branch account to balance.
Due to retention periods, Post Office does not hold training records for this time (Doc 008 refers); however,
the Network Business Support Centre (NBSC) call logs indicate that Colin Woodbridge, Rural Support Manager
from the Post Office, visited the branch on the 21* January 2004 to help locate the shortage.
Issue 2: TV licence
The Applicant has submitted evidence in her case questionnaire that related to an error with a Television
Licence transaction that occurred on the 23 May 2005. Again this is outside of Post Office retention period.
The Applicant has suggested Horizon did not properly record the transaction as the cheque was recorded on
the system but not the TV licence transaction.
At the time there were two types of TV Licence application, the manual process for first time applicants and
the barcode renewal. Both transactions required the user to enter the transaction on Horizon (Doc 009
refers). On the 25 May 2005 the branch called the NBSC because they had given a TV licence form back to
the customer when it should have been retained by the branch (Doc 010 refers). There is nothing to suggest
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this error on 25 May was connected with the transaction complained about on 23 May. However, it is possible
that what has happened is that during the transaction on the 23 May 2005, the clerk has given the whole
documentation back to the customer without entering or scanning the Licence onto Horizon. This would be a
reasonable explanation as to why the cheque was on the system and the TV Licence was not.
Audit and prosecution
The Applicant claims in her case questionnaire she eventually called for an audit, but there is no evidence in
the NBSC call logs of the Applicant requesting an audit. There is an email (Doc 011 refers) from Rebecca Porch,
Retail Cash Management Support, sent on the 6” March 2006 to the area intervention office highlighting
problems at the Post Office. There is a security report (Doc 012 refers) that the Applicant allegedly told Mrs
Kan Matharu, who represented National Federation of Sub Postmasters, that there were some problems at the
Post Office. Mrs Matharu informed Colin Woodridge, Rural Support Manger for Post Office, who in turn
informed Mr Adrian Skinner, Area Performance Manager, and this is confirmed by Mr Skinner’s response (Doc
011 refers).
On the 9** March 2006 an Audit of the branch was conducted by Mr Alan Stuart from Post Office (Doc 015
refers) revealing a total shortage of £36,644.89. The Applicant was precautionary suspended from her role
and a security investigation was undertaken (Doc 012,013,014 refers).
On the 19" November 2007 the Applicant pleaded guilty to false accounting charges at Winchester Crown
court.
The single theft charge was removed after an undertaking was given by defence counsel that all monies owed
to Post Office would be repaid prior to sentencing, A cheque for £37,644.89 was received by the criminal law
team on the 18" Feb 2008 which included £1000 costs awarded to Post Office (Doc 046 refers).
In the Applicant’s prepared statement to the Post Office Security Team, she stated that all staff used the same
Horizon user name. Without any evidence of system error, this appears to be a case where the losses were
generated by user error or potential theft as there was a lack of management and Horizon access controls in
the branch.
Applicant’s Issues and Post Office Headline Response
- The lack of training that was provided by Post Office:
Post Office does not hold training records for this time. Operations Manuals were available in branch and a
weekly “Counter News” was sent to every branch in the network. These publications provided details on how
to process all transactions in branch and also included a detailed balancing guide. The NBSC helpline was also
available.
-The lack of support provided by the helpline
Due to timescales, evidence is not available to carry out investigations in some of the areas. However, the
available evidence suggests that calls were transferred correctly and proper advice given (Doc 005 refers).
-The inability to “park” issues and investigate further
The Applicant claims that there was an inability to “park issues” and investigate differences. Due to the age of
this case (2003-2006), there is limited information now available to investigate the specific issues raised by the
Applicant; the Applicant could have raised an enquiry with the issuer of any error notice directly. Transaction
data was at the time available in branch for 42 days, which was considered sufficient to enable the branch to
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identify any discrepancies in weekly and/or monthly balancing, and paper records of transactions should (and
in fact were required by Post Office procedures to) have been retained in branch for much longer periods.
-The unexplained issues that arose in the first place
The unexplained errors that arose regarding the TV Licence and the difference in amounts from the Balance
Snapshot and the Trial Balance that the Applicant has provided show little evidence that suggests the errors
arose from any fault with the Horizon system. The time in question is outside of Post Office retention period,
so Post Office is unable to examine the transactions that occurred any further but the Post Office's best
assessment of the most likely explanation is set out above in both cases.
Conclusion
In conclusion the evidence examined provides no support for the Applicant's claim that the Horizon System
caused the shortfall in the branch. Given that no systemic error has been identified in Horizon, the more likely
reason for the shortfall is user error or fraud which could be due to the lack of poor controls in place e.g.
sharing of user names and passwords.
The Applicant was aware of the helpline facility and could have reported the loss to them at any time so to
seek further support — but the available records do not show that she did this. This meant that Post Office was
unable to provide further support to the Applicant at the time the losses were occurring as it was not even
aware that the losses existed. This situation was further compounded by the Applicant submitting false
accounts which hid the extent of the losses from Post Office.
The Applicant's complaint
The Applicant's complaint covers four areas:
Issue 1: The perceived lack of training that was provided by Post Office
The Applicant claims in her case questionnaire that she received a minimal amount of formal training between
Christmas and New Year in 2001.
Specifically the Applicant complains that she was not trained on how to handle transaction corrections.
Issue 2: The perceived lack of support provided via the helpdesk
The Applicant claims that there was a lack of support from the NBSC from Dec 2003 to March 2006.
Issue 3: The perceived inability to “park” issues and investigate further
The Applicant claims that there was inability to “park issues” and investigates differences.
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Issue 4: The perceived unexplained issues that arose in the first place
The Applicant submits 2 "unexplained" errors that arose regarding a TV Licence and the difference in amounts
from the Balance Snapshot and the Trial Balance — as described above. The Applicant suggests that these
errors show that there are flaws in the Horizon system.
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Case Review Actions
Summary of the information collated by Post Office
Information available from Post Office records:
Information area Information Information not Information not available for
provided with available as beyond other reason
this response retention period
Electronic Filing Cabinet I X
Horizon Service Desk
Transaction Corrections x
Financial Dispute x
Resolution
POL Investigations x
System Connectivity x
Branch Training Records x
Contractual x
Files/records
x
Branch Audit Reports
NBSC Call logs x
NBSC call logs
Network Business Support Centre answered 203 calls from the branch during the period under review.
2003- 16 calls to the helpline, all in the month of December: seven calls from 1/12/03-30/12/03 relate to the
misbalance call on the 3/12/03 £2082 shortage reported; a further call on the 30/12/03 about another £2000
loss.
2004- 99 Calls to the helpline: two calls in relation to previous month misbalance on the 2™ and 6" January.
Call on the 2" Jan 2004 relates to £4,188.53 loss, it is most likely that this is the previous two losses added
together.
Call on the 3" February 2004 regarding £3,191.00 loss; again it is most likely that this is part of the previous
loss.
Six calls about faults with Horizon System; all other calls were general enquires.
2005- 69 calls to the helpline, 30 of which relate to issues processing and despatching cheques and other
accounting problems.
24/2/05 Calll in relation to £750 loss
25/5/05 Call in relation to TV Licence transaction
2006- 19 calls between Jan-March: 15 calls in January in relation to cheques, system crashing, and branch
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trading.
Call on 5/1/06 in relation to £1000 loss after system crashed when processing postage label.
There are no calls suggesting any shortage in the region of £36,000
There is no evidence in the call logs that the Applicant could not contact the helpline. There is evidence that
on one occasion she had to chase a call in relation to cheques despatch in January 2006 (Doc 006 refers).
Response to issues raised by Applicant
Issue raised Investigation findings
1. The lack of training that was provided by Post. The Applicant worked in the branch from
Office December 2001 as an employee of the former
agent Alwyn Stacy until Ms Stacy's death in
2003. At this time, as an employee of the
former agent Alwyn Stacy, it would have been
Stacy’s responsibility to train the Applicant, not
Post Office. After Stacy’s death, the Applicant
took over the role as Sub Postmaster of the
branch in October 2003; it was only from this
time she would have entered into a contract
with Post Office and become the agent. Post
Office does not hold any training records for this
time (Doc 001 refers).
In 2003 transaction corrections were processed
in the form of an error notice. The notice would
have been posted to the branch with details of
the error and, if applicable, supporting evidence.
There would also have been contact details for
the issuing department should the agent need to
discuss. Accounting instructions were available
in the operations manual provided at the
branch, an extract of the section relating to
error notices is submitted (Doc 002 refers) and
(Doc 003 refers). A weekly newsletter, the
“Counter News”, was also available at the time
and sent to every branch in the network. This
detailed any operational updates and guidance.
The NBSC helpline was also available, should the
Applicant have issues with accounting for the
error notice.
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Call logs to the NBSC are available from 1%
December 2003 -24*" February 2004; calls in
relation to error notices and the issues that
arose during December 2003 are submitted (Doc
004 refers: specifics highlighted in yellow).
The Applicant states in her questionnaire that
somebody came from the Post Office to train
her between Christmas and New Year in 2001. It
could be assumed this was a local arrangement
as at the time Alwyn Stacy was still the Sub
Postmaster and would have been responsible for
training staff.
The lack of support provided by the helpline
There is no evidence to suggest that the
Applicant could not contact the helpline. The
evidence shows that she did so, on average
twice a week over the 25 month period when
she was Sub Postmaster.
The inability to “park” issues and investigate
further
The Applicant claims that there was inability to
“park issues” and investigates differences. The
Applicant could however have raised an enquiry
with the issuer of the error notice directly.
Call logs made to the NBSC suggest that this may
have been the case (Doc 004 refers). On the 1st
December 2003 the Applicant contacted the
NBSC regarding a problem with the despatch of
cheques, the Applicant called back again on the
2" December and asked to speak with someone
else as she was not happy with the help she had
received the previous day. It appears from the
comments section on the call logs that the NBSC
contacted the team at Chesterfield who dealt
with error notices at the time and confirmed
that the cheques had not been despatched from
the branch correctly and arranged for an error
notice to be issued to the branch to clear the
loss.
The Applicant was therefore clearly aware of
how to seek support in order to investigate
losses.
The unexplained issues that arose in the first
place
The Applicant has provided no evidence to
support these “unexplained Issues”. Both the
difference from the Balance Snapshot and Trial
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Balance reports and the TV Licence transaction
can be explained — see executive summary
above.
List documents (if any)
Reference Description
MO035_POL_Training Email_PT_001 Email confirming no training records available
M035_POL_Error Notice_PT_002 Extract from Operational Manual in relation to error
notices process
M035_POL_Horizon Error Notice_PT_003 Extract from Operational Manual in relation error
notices process
M035_POL_Call logs Dec03-Feb04_PT_004 NBSC calls in relation to error in December 2003
M035_POL_All NBSC Calls_PT_005 All NBSC call logs from Dec 03 — March 06
M035_POL_Call Logs Jan 06_PT_006 Chaser Call to NBSC
M035_POL_ARQ Request_PT_007 Email confirming transactional records& Horizon
Service Desk calls outside of retention period
™M035_POL_branch visit_PT_008 NBSC call log from Jan 04 relating to branch visit
from Colin Woodbridge
M035_POL_Tv Licence process_PT_009 Extract from Operational Manual in relation to TV
Licence process
M035_POL_Call to NBSC re TV Licence_PT_010 NBSC call log from May 05 in relation to TV Licence
error
M035_POL_Audit Email_PT_011 Email from Cash Management team raising concerns
M035_POL_Security Report_PT_012 Copy of security team report
MO035_POL_Security Interview_PT_013 Copy of security team interview
‘M035_POL_Security Interview_PT_014 Copy of security team interview
M035_POL_Audit Report_PT_015 Copy Of Audit Report
M035_POL_Court Case_PT_016 Details of court findings