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Post Office Limited
Initial Complaint Review and Mediation Scheme
Overview of Horizon and branch trading practices
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Introduction
This overview has been prepared with a view to informing the reader of the basic functions of the Horizon system and Post Office's branch
trading practices.
It is not exhaustive — there are a number of product and scenario specific processes that are not described in this overview.
Contents
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Post office: an overview
1. Post Office is a commercial business with a public purpose. The majority of its income is self-generated but it does receive financial
support from its ultimate shareholder, the UK govemment. It has around 11,500 branches and employs almost 8,000 people. Although
traditionally, Post Office is thought of a place to post mail its branch network now provides a full range of products and services, from
financial services such as commercial / personal banking and access to government benefits through to lottery scratcheards. A non-
exhaustive list of products sold by Post Office is at Schedule 1
2, Historically, Post Office was part of the Royal Mail Group with operations and services centrally controlled for both businesses. In April
2012, the two businesses separated and Post Office has since traded as a separate company.
‘Subpostmasters
3. The majority of Post Office branches are run by subpostmasters and are known as ‘agency’ branches. Subpostmasters are, in the main,
individuals who are contracted to run Post Office branches. They are individual contractors and not employees of Post Office and their
position is similar to that of a franchisor.
4, Asubpostmaster does not need to render personal service - they may emiploy ‘assistants" to conduct branch business. In some cases,
a subpostmaster may employ a manager to run his/her branch and will actually have minimal involvement in day-to-day operations. The
‘employment of assistants is the subpostmaster's responsibility. Where below an aay is said to be undertaken by a subpostmaster,
this activity could also be undertaken by an assistant in most cases.
5, Each subpostmaster owns (or leases froma third party landlord) the premises fromiwhich the branch is run. Other than setting minimum.
standards from the premises (in terms of legal ownership rights, physical security, ete.) itis the subpostmaster's responsibility to provide
the branch premises.
6
7. , the subpastmaster is an agent of Post Office. In legal terms, Post Office business is a
transaction between the customer and Post Office Limited, with the subpostmaster acting as Post Office's agent to complete the
transaction. As the subpostmaster is not undertaking business in his own name, all the cash and stock held at a branch are owned by
Post Office. In effect, the subpostmaster is a steward of this cash and stock, and although it is under the subpostmaster’s control, itis
not owned by the subpostmaster.
Other branch types
8 Crown - There are around 300 *Crown" branches that are directly owned and run by Post Office. The staff at Crown branches are
employees of Post Office Limited and the branch is run by an employed “branch manager” rather than a subpostmaster. The operating
procedures at Crown branches are largely the same as those at agency branches.
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9, Multiples - Sometimes branches are located in much larger businesses such as Cooperative convenience stores or WH Smiths. These
larger businesses tend to have multiple branches and are therefore called "multiples". The operating procedures at multiples are largely
the same as those at agency branches.
The National Federation of Subpostmasters ("the NFSP*)
10. The NFSP is the organisation recognised by Post Office to negotiate on behalf of subpostmasters nationwide. A team of negotiators
works throughout the year to improve the pay and conditions of service for subpostmasters. The NFSP negotiates with Post Office on the
payment for all services and products transacted over a Post Office counter. It also works closely with Post Office on a range of other
issues including post office security, operational systems and technology.
11, The NFSP provides a range of services offering support, advice and information to its members. its monthly magazine, "The
‘Subpostmaster’, provides up-to-date information on issues affecting subpostmasters. A 24-hour helpline gives advice on contract /
employment issues.
12. Representation and guidance is available in the event of disciplinary action or disputes with Post Office, Subpostmasters have access to
local support through local branches of the NFSP and its Executive Officers. The NFSP also runs a Benevolent Fund providing financial
‘support to subpostmasters in need.
‘Subpostmaster's contract
13, The original subpostmaster's contract was drawn up in 1994, \Ithas been subject to several revisions over the years, but the core
principles have generally remained unchanged, The terms of the subpostmaster's contract are jointly drawn up by Post Office and the
NFSP and the NFSP approves all revisions to the contract.
ubpost master's contract, subpostmasters are remunerated based on the volume of business that they transact.
15. _ Asubpostmaster also has responsibility for the safekeeping of Post Office's cash and stock. A subpostmaster is therefore liable for any
fh ap stock in their branches if that loss is calised by their carelessness, negligence or error (clause 12(12)) or by the
carelessness, negligence or error of their assistants (clause 15). If cash or stock is lost by the fault of the subpostmaster, the
subpostmaster is obliged to reimburse Post Office for that loss. The way that losses can occur is set out in section REFERENCE
16. The allocation of risk for the loss of cash or stock between Post Office and subpostmasters is not unusual. It mirrors standard retail
franchising contracts, where the “franchisee”, who runs his/her business under the “franchisors” brand, bears the risk. In essence, Post
Office, like retail franchisors, give subpostmasters the ability to use and operate under its most valuable asset - its “Post Office” brand.
The risk Post Office bears is that through the actions of the subpostmaster and his/her assistants its brand and its goodwill may be
damaged if, for example, the customer does not experience good customer service.
17. Serious errors by subpostmasters can result in a subpostmaster's contract being terminated and/or the subpostmaster being sued
through the civil courts to recover any related loss.
18, Where Post Office discovers evidence of criminal wrongdoing, a subpostmaster may be criminally prosecuted. Typical criminal
prosecutions are for either theft or false accounting (where a subpostmaster has declared transactions or stock or cash levels within the
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branch which are not true). Post Office sometimes refers these prosecutions to the police/national prosecution service (being the Crown
Prosecution Service in England and Wales and the Procurator Fiscals office in Scotland). However, in the vast majority of cases, Post
Office undertakes a private prosecution of the subpostmaster.
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Horizon and branching accounting
communications. For audit - Sue Richardson
Horizon
19. Horizon is the electronic point of sale IT system used in all Post Office branches. In 1995, following a competitive tender process, Post
Office commissioned the Horizon system ("Horizon") from the company now known as Fujitsu Limited. Horizon is accredited by Payment
Card Industry Data Security Standard and ISO 2700 and encompasses the following:
; Horizon to fulfl the needs of Post Office and
19.1 both bespoke and of-the-shelf software packages which have been designed to all
subpostmaste! :
192 the computer hardware and communication equipment which is installed in each Post Office branch including the touch screen
counter terminal and printers;
19.3 the central data centres where transaction data iS sent from each branch and stored;
19.4 the control and monitoring systems; and
195 the testing and training systems.
20. — Horizon is therefore more than just software. {tis the IT infrastructure used by Post Office and in all Post Office branches to undertake all
transactions (from selling lottery scratch cafds to Cash withdrawals and cumency exchange). Horizon stores all transactional data
unter in every branch. Each terminal Communicates with Post Office Data Centres via a secure communication line
back-up communication System and in order to communicate Horizon must be ‘online’ on the intemet. This data is stored by Post
Office for a period of seven years in line with Post Office data retention policy.
21. In 2010, Post Office rolled out "Horizon Online” as part ofits Horizon Next Generation Programme to provide a simplified network based
on the centralised processing of data. This programme offered the use of modern technologies, easier integration and speedier future
development as well as the potential to deliver significant savings. Horizon Online did not seek to add new functions to the existing
Horizon system and changes to the Horizon interface used by subpostmasters and their staff were kept to a minimum to reduce the
disruption to branches and the requirement for training (although training was still provided to approximately £50,000 Horizon users)
The main changes were "behind the scenes” and affected the service provided by Post Office Data Centres, field service and
telecommunications.
22, The main roll out of Horizon Online began on 30 June 2010, following a pilot involving 1,422 branches, and completed on 14 September
2010. As part of the roll out of Horizon Online new equipment was provided to branches, including the installation of 34,000 new counter
printers (installed in over 14,000 branches).
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23, Today, Horizon is used by more than 68,000 people across 11,500 Post Office branches. On average 6 million transactions are
undertaken on Horizon every day, 22 million banking transactions are undertaken every month and 2.5 billion transactions are undertaken
every year with a cash value of £100 billion.
Branch accounts
24, In essence, Horizon is an electronic accounting system. It tracks every transaction made in a Post Office branch and logs the levels of
cash and stock held in each branch. The branch's accounts are stored on and through Horizon, allowing the amount of cash and stock
held in the branch to be looked up at any time.
25. The system's core principle is that of double entry bookkeeping. For example, if a product is sold for cash this would in most cases result
ina reduction in a branch's stock levels of that particular product line and an increase in the amount of cash recorded as held at the
branch.
26. The effect of this double entry system is that an input in one pat branch's accounts can cause’corresponding changes in other
parts of the accounts.
Example:
The levels of stock held in @ branch can be manually adjusted. reduction in stock will however increase the amount of cash by the
same value as Horizon will assume that the stock has been sold.
So if the amount of first efass stamps recorded on Horizon is manually reduced by £10, the amount of cash recorded on Horizon is
automatically increased by £10.
If this adjustment was incorrect (say it was done by @ecicent), when the amount of cash actually in the branch is then compared to the
amount of cash recorded 9 Horizon, the branch will be E [O'short and will be showing @ loss of £10 in cash. In this way, the error in
acéounting for stamps has Haine thro tne accounts to ‘manifest as a loss of cash
However, £10 more in first class stamps than that the amount of first class stamps
shown on Horizon, \This creates a “surplus of stamps in the branch.
In this scenario, there is therefore no net overall loss. The error can be corrected by manually increasing the value of first class
stamps recorded on Horizon by £10, which will then automatically decrease the amount of cash recorded on Horizon by £10 (as
Horizon will assume that as there are now more stamps in the branch, those extra stamps must not have been sold). This will bring in
line (or "balance’) the branch's accounts recorded on Horizon with the actual cash and stock holdings in the branch.
Processing transactions on Horizon
27. _ In simple terms, most customer transactions are processed as follows:
27-4 Acustomer approaches the branch counter and requests certain transactions.
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27.2 The subpostmaster selects the appropriate product or service on the Horizon terminal and, if necessary, inputs the value of the
transaction (eg. cash withdrawal from a bank account of £100).
27.3 This process is repeated for each transaction requested by the customer (eg. at the same time as the cash withdrawal, the customer
purchases £10 of stamps).
27.4 Horizon groups the transactions together in a "basket" of transactions and displays the net amount to be paid to the customer or
needs to be taken from the customer (eg. in the above situation, the net cash due to the customer is £90)
27.5 lf payment is to be taken from the customer, the subpostmaster selects the payment method (eg. cash, cheque, debit card, etc.)
27.6 The subpostmaster takes the payment from the customer or pays out cash to the customer as required.
27.7 The subpostmaster completes the transaction on Horizon which closes that basket, ready for the next customer, and updates the
branch's cash and stock records on Horizon (eg, in this scenario, the branch's cash will have decreased by £90 and stamps
by £10).
28. There are exceptions to the above due to the specific accounting requirements of cei
in products (eg. Lottery transactions must be
transacted on the separate national lottery terminial and Horizon is then be updated later in the day).
29. There may also be various other steps that the subpostmaster needs to take to complete the transaction which are specific to the product
in question (eg. completing and sending off various receipts and paperwork).
Reconciliation with clients
30. Anum er ofthe products and services available at Post I Office branches are provided by third parties ~ see the product list at section
REFERENCE These third patties are commonly referred to as’ “ellen
se ea
31. When a client product is transacted, details of this transaction are communicated to client. Sometimes, this reconciliation is conducted in
real time, and sometimes it is conducted ata later point. Post Office is then liable to account to the client for the transaction value (or
vice versa). This interconnectivity with, and the transfer of information and records to and from, clients is part of Horizon’s functionality.
Example:
At Post Office branches, a customer can deposit cash in or withdraw cash from his/her bank account with @ number a major
banks (eg. Lloyds, Santander, etc.)
If a customer wishes to withdraw £100 of cash from an account, the Horizon system connects to the client's computer banking
system to confirm that the cash is available for withdrawal. Once authorised, Horizon will tell the subpostmaster to proceed with
the transaction and to give £100 in cash to the customer (assuming that there are no other transactions in the basket). The
amount of cash recorded in the branch's accounts on Horizon will be automatically reduced by £100 to reflect the withdrawal,
This way the branch's accounts are kept in balance with the amount of cash actually on hand.
Likewise, the customer's account with the client bank will be debited £100.
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Remittances
32,
33,
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At this point, Post Office is out of pocket: it has paid out £100 in cash to the customer but not received £100 from anyone. There
is however a later reconciliation between the Horizon transaction records and the client bank's transactions records. Assuming
that there is no error or discrepancy, the bank will then pay the value of the withdrawal (ie. £100) to Post Office.
This process would happen in reverse for a £100 deposit into a bank account, with the result that the cash position on Horizon at
the transacting branch is increased by £100, the branch holding £100 more cash on hand and Post Office making a later payment
to the client bank of £100.
Branches send or receive cash and stock (which includes customer cheques /@s cheques are classed as a stock item on the Horizon
accounts) to and from Post Office central processing centres. This movernent of cash and stock is called a "remittance (and is often
referred to as “remming in* or ‘remming out’)
Branches are either classed as “cash surplus” or “cash deficit” in terms of cash management. Those branches that are classed as cash
surplus receive more customers who make deposits (eg. by making cash deposits to bank accounts or by buying products with cash)
than customers who require cash withdrawals. For example, cash surplus ranches tend to be in areas where there are lots of business
customers making large deposits but not many benefiticustomers making withdrawals. These branches do not require cash remittances
to be sent to the branch from Post Office as they will have a net inflow of cash from customers. These branches are however required to
return cash to Post Office [Where exactly”) in order to prevent the branch holding too much cash on site
eee ss .
Cash deficit branches are those where the money deposited by custofners to the branch does not cover the amount that the branch has
to pay out. These branches rel ‘the branch in order to ensure that there is sufficient cash in the branch to.
meet its needs.
eee
Wire deci sash is remmed in/out?
35,
36
37,
-
Where cash is to be remmed out to Post Office, the branch is responsible for placing sufficient cash into the remittance pouch, entering
the amount that is being remmed out onto Horizon and then either handing the remittance pouch to the Cash in Transit Driver, or sending
it back to Post Office via’Royal Mail Special Delivery. This will decrease the amount of cash recorded in the branch accounts on
Horizon.
Where cash is remmed into a branch, the cash remittance is sent by Post Office to the branch either via a Cash in Transit Driver or via
Royal Mail Special Delivery. The branch is responsible for checking that the remittance pouch contains the amount of cash stated on the
remittance and then logging the receipt of cash on to Horizon. This will increase the amount of cash recorded in the branch accounts on
Horizon.
A similar process is used to rem out customer cheques received by the branch. When a customer pays by cheque, the total aggregate
value of all cheques held by a branch is increased on Horizon. Cheques are then remitted by a subpostmaster to Post Office on a
regular basis which reduces the value of cheques recorded on Horizon. Post Office then takes responsibility for putting the cheques into
the banking system and recovering payment from the customer's bank,
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Branch Settlement ~ Rod Ismay
Reporting
38. Subpostmasters are required to run and review in-branch reports to ensure that the branch is functioning effectively and to allow Post
Office to monitor cash and stock levels againstits records, This includes:
38.1 Daily Cash Declaration ~ staff at each branch are required to count and declare the cash stored in that terminal at the end of each
day. The actual cash on hand is input onto Horizon by the subpostmaster of his assistants. Horizon then shows any
“discrepancy’ between the cash on hand and the amount of cash that should be in the branch according to the branch's
accounts.
Ifa discrepancy is identified then the cash should be recolinted and the paperwork ré-checked. If there has been an error in
the counting of the cash, then the cash should be re-declared. Transaction and event fogs plus a balance snapshot can be
printed from Horizon to check for any errors or amendments which may be needed. It is also best practice to open and check
any stock and cash pouches made up ready to return to Post Office.
38.2 Weekly Balance - It is recommended that every week, a branch undertakes a full cash and stock count. The actual amounts on.
hand of cash and stock can then be compared to thé figures recorded in Horizon. This helps the branch with identifying
discrepancies and, where possible, correct
Weekly deficienicies can also be temporarily moved into count by a subpostmaster. This is a separate line in
the branch accounts which records any losses or surpluses So that the daily trading accounts can be put into balance.
‘Amounts are typically held in suspense to allow the subpostmaster time to try to resolve the discrepancy.
he Daily Cash Declaration and the Weekly Balanes are tools for the subpostmaster to use to manage their branch. Declaring
a loss or surplus through either of these reports does not trigger any action by Post Office.
38.3 Monthly Trading Period Rollover ~ This is similar to the Weekly Balance but is mandatory every month. It also requires any
discrepancies (including those put into suspense during the month) to be resolved. This process is also called ‘rolling over" or
the "end of trading periocr progess, At the end of the process, the subpostmaster must print off and sign a "Branch Trading
Statement’, This slatement confirms that the cash stock shown in the accounts reflects the cash and stock held in the branch
(with any discrepanoy have been declared and resolved - see below).
384 Cut off routines ~ for example, validating the physical cheques held in branch to send to clearing or banking summaries to
send to Santander. Validations of physical paperwork against Horizon records can detect errors or omissions.
385 Other reports - trial balance snapshot, transaction logs, suspense reports, daily sales and reversals.
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Resolving surpluses or losses of cash or stock
in i >
39. If following the monthly rollover there is a shortage or surplus of stock, the subpostmaster will (what
40. _ If following the monthly rollover there is a surplus of cash (when the cash on hand i.e. in branch is more than the amount of cash
recorded in Horizon), the subpostmaster is entitled to physically remove from the branch sufficient cash to bring the branch back into
balance. This excess cash then becomes the subpostmaster’s property and they may do with it as they wish.
41. If following the monthly rollover there is a shortage of cash (when the cash on hand is less than the amount of cash recorded in Horizon),
Horizon presents the subpostmaster with three options:
41.1 Make good - the subpostmaster can elect to put additional cash into the branch from their own personal funds to make up the
shortage.
41.2 Settle centrally and pay ~ the shortage is transferred to the subpostmaster’s personal account with Post Office. The cash figure on
Horizon is reduced to bring it in line with the actual: cash
hand at the branch. However, the subpostmaster personally owes
the cash loss to Post Office as a debt. This debt can ber aid by either (a) a direct payment from the subpostmaster to Post
Office or (b) by deductions from the subpostmaster's remuneration.
41.3 Settle centrally and dispute the shortage - if the subpostmaster believes that the shortage was not hisiher fault or could be resolved
through other means (see below), then the debt will be suspended to allow time for the shortage to investigated and remedied.
The subpostmaster disputes a shortage by contacting the Finance Service Centre (FSC’) at Post Office.
Transaction corrections
42. Thé FSC (often referred to as “Chesterfield” by subpostmasters) is the behind the scenes account processing centre providing daily
services to ¢lients, branches, multiplé partners and customers.
43. Transaction Corrections ("TCs") are transaction adjustments sent by the FSC to branches when errors are found. Even if the branch's
accounts are balancing ((e. there is no discrepancy between cash and stock on hand and the cash and stock levels on Horizon), it may
be that the branch has processed transactions erroneously or in a way that causes a Post Office client to refuse to reconcile the
transaction with Post Office, thereby causing a loss to Post Office.
44, TCs can be issued for a wide range of issues resulting from matters such as errors or omissions in data entry, such as mis-keying,
forgetting to enter data, failing to close a customer basket from previous customer session, delays in sending cheques for proces:
incomplete cheques, bounced cheques and card payment issues. In 2012/13 the most common reason for TCs being issued to
branches was due to "cash remittances’,
45. Due to the fact TCs are often generated due to a discrepancy between Horizon and a client's records, there can be a time lag between
the error occurring and the TC being issued
Example:
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If a customer deposits £100 into their bank account but, through a keying in error, the branch only records a deposit of £10 on
Horizon, Post Office is reliant on the customer pointing out the error.
In this scenario, the records on Horizon and at the client bank will reconcile as both will show a £10 deposit. The branch will have a
£90 cash surplus (as the branch will have taken £100 from the customer but only recorded receiot of £10 in Horizon).
The only person who is able to identify the error is the customer when they check their transaction receipt or bank account statement.
The customer may raise a complaint with Post Office directly or could raise the complaint with his/her bank who will then contact Post
Office.
46. The time taken to identify the error is therefore sometimes outside of Post Office's contral. However, Post Office achieved its target for
2012/13 and issued 95% of TCs within 3 months.
47, When a TCis sent to a branch through Horizon, the branch is provided with evidence of how the error has occurred. TCs are often
superseded by enquiries with branch, particularly if a large number of TCs are being sent to that
48. Following receipt of a TC, a branch is required to process the TC via Hotizon to maké the necessary adjust to correct the error.
49. Processing a TC often results in an adjustment to the cash or stock position at the branch within the branch's accounts. TCs can both
debit or credit the branch's accounts. As such, a TC may mediately cause the subpostmaster a loss or cause any loss to the
subpostmaster at all.
‘gees
Eine
50, TCs can also be disputed with the FSC team that issued the TC. If the TC dispute is upheld a compensating TC will be issued to the
branch. If itis not upheld a wi iI can be made to the relationship manager in FSC who will review the case and make a final,
decision. Any payment required by the subpostmaster will be suspended until the review is completed.
51 On average around 12,000 TCs are issued to branches each month. The volume of TCs issued for branches during the 2012/13 period
was 84,217, with an average value of around £100 each. This is against a backdrop of an average 2.5 billion transactions being
completed on Horizon each year. [For this period 14.9% of branches were not issued with a TC ~ the majority of branches experience
TCs, why is it common for TCs to be issued?) Post Office takes steps to minimise the number of TCs which occur by offering training (as
described [below]) and monitoring the performance of branches,
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Crown Branches
{Rodric Williams to produce detail]
52, Post Office operates around 300 Crown branches that are directly owned and run by Post Office. The staff at the Crown branches are
employed by Post Office and a "branch manager” rather than a subpostmaster manages the branch.
[Why does POL have Crown branches? What is their purpose? Describe losses suffered by Crown branches in 2013/14? Why are they
not profitable?]
53, The operating procedures at Crown branches is largely the same as the agency branches run by subpostmasters except as follows:
[Please list procedural differences]
branch is suspected of wrong doing Post
54, Equally Crown branches are subject to audits (see [ xx ]) and if a branch manager of a Cro
Office will take action, including criminal prosecution,
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Training
‘Sue Richardson (Training content owner), Gayle Ps (Business improvement Programiné
55, _ New subpostmasters receive training prior to and after taking up their position in branch. Training covers matters such as how to
transact products and services; how to reconcile the days transactions; how to remit in out cash and stock; and how to despatch
cheques to processing centres. Subpostmasters are also trained on how to balance the branch on a weekly basis and roll over in to the
next balancing period. As part of this training, subpostmasters are shown how to verify transactions and the cash and stock on hand if
discrepancies arise, as well as how to accept discrepancies, make good any losses and gains, and how to raise issues about
errorsidiscrepancies.
56, Post Office continually monitors and considers how best to train subpostmastérs and, as, part of the current Business Improvement
Programme which aims to improve the performance of all branches, it is reconsidering how best to train subpostmasters on new
products (currently training on new products is through workbooks. and Horizon testing). ss of the types of training Post Office
has offered in the past are as follows:
56.1 2001 ~ New subpostmasters received 2 days of classroom training followed by 40 days of onsite wining ar support. This would be
followed with one day of follow up balance [what is
86.2 2002 - New subpostmasters received unt ae (Post Office no longer retain details of the length of classroom training due
to the time which has past and Post Office's data retention policy). 11 daiys of onsite training and support was offered
depending on whether the classroom training was attended. This
uld be followed with one day of follow up balance.
96.3 2003 ~ between 5 and 10 days of classroom training was offered to new subpostmasters (the training being optional) and 6 to 10
days of onsite training and support was given depending on whether the classroom training was attended. This would be
followed with one day of follow upbalance:
56.4 2004 — 2005 - between Sand 10 days: Ofclassroom vainng Wee offered to new subpostmasters (the training being optional) and 5 to
10 days of onsite ‘raining and support was given depending on whether the classroom training was attended. This would be
followed with one day of follow up balance.
56.5 2006 - between 5 and 10 days of classroom training was offered to new Subpostmasters (the training being optional) and 6 days of
onsite training and support was given depending on whether the classroom training was attended. This would be followed with
one day of follow u
56,6 2007 — 2011 — New subpostmasters received 5,8 or 10 days of training on foundation, sales and other specialised modules. 6 days
of onsite training and support was provided, followed with one day of follow up balance. In 2007 following a pilot scheme
follow-up telephone calls were introduced at intervals of 1 month and 6 months after the branch was taken over by the
subpostmaster, with a one day site visit taking place 3 months after the branch was taken over.
57. _ In 2012 Post Office tailored its training depending on the specific role being undertaken and rolled out further training to, for example,
een
experienced subpostmasters who took on MAIN contracts [what is different about a MAIN contract?) as well as subpostmasters who took
over additional branches but had new staff to train. The precise training given to subpostmasters will depend on a number of factors
such as whether the subpostmaster is completely new to the role, whether he/she is taking over an existing branch with existing staff, the
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size of the branch and the types of products sold. For example, Post Office currently offers (amongst other packages) the following
packages of training to new subpostmasters:
New Post Office Local Operator
57.2 Prior to the transfericonversion of a branch to a new subpostmaster 3 hours of distance leaming is offered to the subpostmaster
and their staf. This includes a writen Foundation Module — what does the Foundation Module consist of?
57.3 The subpostmaster is then offered 3 days of CTO [what does GTO stand for?) classroom training. Following the classroom training
itis the responsibility of the subpostmaster to feedback to their staff. However, if the subpostmaster is employing 6 or more
members of staff, Post Office will offer spaces on the course to up 50% of the subpostmasters staff.
ie i an ES Us van Hp) roving mecce setup aon ay
induction is offered to the subpostmaster and all members of staff.
57-4 Post Office schedule the equivalent of 1 days’ training (normally spilt over 2 days depending on availabilty) for office set-up, [whieh
ee one da
575 In addition a comprehensive training guide is sent to the branch for the subpostmaster and all staff to use, the following onsite
training and support is offered to subpostmasters:
(@) 6 days if the subpostmaster has 1-2 members of staff,
(b) 7 days if the subpostmaster hak p
(c)
the subpostmaster has more than mbers of staff.
57.6 Following completion of the onsite training a follow up balance is arranged 7 days later [to address any issues that have arisen in
im) After a further 1-2 weeks the Field Team Leader (wha i the job
completing transactions and using Horizon —
8
will telephone the subpostmaster to seek feedback on the
fe Fi Toa an Wat oar
57,7 Post Office will arrange a site visit to the branch to address matters such as product knowledge, transactions and any training needs
@ branch is transferred/converted. Post Office will also arrange an audit 6-9
tervals of 1 month and 3 months after
the transfer/conversion to verify stock and ensure its regulatory and business processes are
SE wot es
57.9 Prior to the transfer/conversion of the branch the subpostmaster and their staff are provided with a Distance Learning booklet to work
through which includes 6 compliance workbooks to complete covering anti-money laundering, financial services, data,
protection, mails integrity, dangerous goods and homephone and broadband
87.40 A7 day CTO class training session is offered to the subpostmaster and up to 50% of his/her staff. Itis the responsibility of the
subpostmaster to feedback the training to the remainder of their staff. An additional day is offered to cover non-core products
for branches which will offer such products. Following completion of this session an engagement evening with the Sales
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Capability Manager (i
3 ver?) is arranged for the subpostmaster and all their
staff to attend. The Sales Capability te team then arrange a 2 day workshop for the subpostmaster and one member of staff to
cover sales training. It is the responsibility of the subpostmaster to feedback the training to the remainder of their staff.
57.41 When the branch is ready to “go-live an office set-up day is arranged (split over 2 days) with the branch opening at 1. 00pm
on “govive day. A Field Support Advisor ("FSA") (see further at secon KRBelaw) wil attend the “go-live” day to provide
assistance (an additional FSA will attend if there is more than 6 staff). Addliional onsite training and support is provided for 6
days following the “go-live” day and the branch will receive a training guide. A follow up balance is arranged 7 days after the
confirm) After a further 1-2 weeks the Field Team Leader will telephone the subpostmaster to seek ‘eedbeck con the training
and establish if further support is required.
587.12 Post Office will arrange site visits to the branch to address matters uct knowledge, transactions and any training at
intervals of 1 month and 3 months after the branch is transferred/converted. Post Office will also arrange an audit 6-9 months
after the transfer/conversion.
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Support for subpostmasters
Kendra Dickerson, NBSC Relationship Mana,
58. The Network Business Support Centre (NBSC’) was established on 15 December 1999 to help and support subpostmasters and their
staff with customer transactions and navigation of Horizon. NSBC can support Subpostmasters with a wide range of issues such as
providing assistance with transactions carried out through Horizon,
‘avigation, how to address and deal with mistakes and any issues
arising out of weekly branch trading.
59, _NSBC is open 6.00am to 11.00pm Monday to Friday and 7.00am to 6.00pm on Sundays and Bank Holidays. {Therefore, NSBC is
available to support subpostmasters and their employees during and after the opening hours of their branches ~ js this Soiree. ] WHAT
ABOUT SATURDAYS? I scissile iia GSTELOP EERE?
60. Post Office currently employs 70 people to sit within NBSC_ and receive calls, undertake Second line support (where @ query cannot be
‘@ year (based on data obtained for 2012/13).
NBSC operates a
Field Support — Gayle Peacock
62, Post Office has a large network of branches and subpostmasters which is currently managed in the following way:
62.1 The Top 2000 branches , which are usually the largest branches with the highest sales potential, are managed by an Area Sales
Manager ("ASM"). These branches receive face to face visits from the ASM on a regular basis (at least monthly), primarily to
assist with improving business and sales performance, but other non-sales issues are also addressed if required. Whilst the
ASM is trained to be a sales coach, they are not considered by Post Office as “trainers” and would go to other “expert
domains” such as the Field Support Team to obtain assistance for subpostmasters with, for example, balancing issues and
using Horizon. The subpostmasters of these branches are also invited to attend Quarterly Business Up-dates where a range
of topics are discussed. Usually about 40-50 branches attend each session and there are at least 2 events held in each of the
7 regions [what are the regions? Please list] each year. If a branch has also converted to a MAINs contract [what is a MAINS
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contract and how is it different?] , then the subpostmaster will also be invited to take part in the “Breakthrough” programme.
This involves intensive on-site support post conversion by 3 ASMs. The purpose of this training is to assist with the mind-sets
and behaviours of the subpost master and their team to ensure that the income of the branch is retained and maximised.
62.2 The Next 2000 branches, which are selected either because they have the sales potential or because the geographical location is
such that it is not cost effective to be managed by an ASM as part of the Top 2000 branches (for example branches located in
remote parts of Scotland, Devon and Comwall), are actively account managed from a sales perspective by the Telephone
Account Management team. Face to face visits do not routinely occur (unless there are, for example, training issues to
address), but the Telephone Account Management team make [regular] calls to the branch to monitor sales progress. The
team can also refer branches to be visited by a Regional Sales Trainer who can visit to coach the subpostmaster and their staff
on sales.
62.3 Remaining branches These branches are classed as “Branch Support”!branches. They are not visited pro-actively and do not have
@ manager assigned to them. Their first point of contact is NBSC where they can seek assistance with issues such as
balancing queries and resolving mistakes. Details of NBSC are set out [above]. If NBSC cannot resolve the query, there are
a number of escalation points depending on the nature of the issue and, ultimately, if it cannot be resolved over the telephone a
Visit by a FSA can be arranged.
and on-going transactional training for all
63. Post Office has a dedicated Field Support Team which is responsible for induct
subpostmasters. Currently the team consists of 227 Field Support Advisors ( and 18 Field Team Leaders (“FTLs"). This number
has doubled from 2010 when the team expanded to ‘cope with the Network Transformation Programme (the ‘NT Programme") [what is
this programme?]. The team is responsible for matters such as:
63.1 Delivering classroofn training (a 5-8 day course) to all new subpostmasters, who aré going through the NT Programme. This
training takes place before a new subpostmaster starts work in the branch and further detail is set out [below]
63.2 Training on site folowing abranch transfer. FSAs will attend the branch for a number of days after the transfer and will cover a
range of topics to ensure the branch can operate: effectively. This will be followed up with site visits, telephone calls and an
audit.
63.3 Requests from branches for remedial training from FSAs throughout the year. This training is delivered as and when required on a
of topics such as new ATMs, DVLA transactions, balancing issues and unexplained losses. The team received
863 requests for extra support in 2013. Generally the subpostmaster will receive the training and the subpostmaster is then
responsible for training their own staff. However, each request for training is considered on a case by case basis and Post
Office endeavours to provide the best support necessary to address the issues raised by the subpostmaster.
63.4 Undertaking Compliance and Financial audits which also includes providing further training to subpostmasters on matters that arise
out of any issues identified by the audit. In 2013 there were over 3,000 compliance audits undertaken and cash and stock
checks were completed in 2,873 Post Office branches.
64. The Field Support Team is not the only team within Post Office who provide training and support, either on a face to face basis or
remotely via the telephone, for example:
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64.1 Mails Development Managers were established in 2010 to visit branches which receive high volumes of mail. They train these
branches on products and sales to increase business growth in this area
64.2 The Branch Standards Team was established in 2009 and is a telephone-based intervention team. The teams contacts branches
regarding a wide range of performance issues. Whilst the purpose of the call is to notify the branch of any errors, they also
ensure that the branch knows the correct procedures to follow. If the branch requires further support at any time, the team
request a visit by an FSA via the Branch Support Team [can you provide a summary of what the Branch Support Team does
as opposed to the Field Support Team?]
‘There are also a number of teams across Post Office who come into contact with subpostmasters (such as product specific teams like
the national lottery team) and may feel that a visit or further training would be beneficial for support. These teams can request further
visits and training for subpostmasters through the Branch Support Team who will decide the most appropriate resource to resolve the
issue.
65. Post Office has gone through a number of structure reviews which’ have impacted on the support and management of subpostmasters
and their branches. These reviews have been driven by varius cost challenges and were often determined by Post Office's funding
from the UK goverment for its network of subpostmasters. As a regult, Post Office’s approach to structuring its agency relationships
with subpostmasters has changed over the years, for example:
65.1 Up to 2005 - branches were either designated Urban or Rural. Each Urban branch and the largest of the Rural branches was
assigned a Retail Line Manager (each Reta Line ‘Manager would manage around 40-60 branches). The smallest of the Rural
branches would be managed by a Performance Advisor (ead I Performance Advisor managed approximately 100 branches).
Both Retail Line Managers and Performance Advisors were responsible for performance. The Post Office training team which
sat within Post Office's HR department was responsible for matters such as transactional training,
65.2 2005-2008 - the network of s ppostmasters was operated under a structure of Diamond, Platinum and Gold. This structure was
2 Sales and Service structure, Most branches operated under the Diamond or Gold network. The structure had a
series of Sales Managers and also had Area Performance Managers. Again, most branches had an allocated manager who
would visit and the training team were an extra resource fo use for matters such as transactional training.
65.3 2006 ~ 2008 - in 2006 there was a fullrreview of Post Office's structure. Sales Managers were replaced by either Commercial or
Community Business Development Managers ("BDM"). Each branch had a BDM assigned to it. In the Commercial network,
the BDM would manage about 40 branches and in Community network about 100 branches. The Commercial Network
concentrated largely on sales and the Community network was responsible for picking up non-sales issues. The Branch
Support Team was also established to assist with sales issues. It was also at this point that the Training team were renamed
Network Field Support Advisors.
65.4 2008 - the financial audit team merged with the Network Field Support Advisor team so Support Advisors would conduct both
training and audits in branches.
65.5 2009 - in around 2009 Post Office took the decision to remove the BDM role and the Area Sales Manager structure was created and,
as a result, if smaller branch required a site visit it would need to be requested from NBSC. Is there any reason why regular
site visits are not necessary ? i.e. support on the intemet, increased resource at NBSC ?]
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Auditing
66. _ In order to monitor and validate performance Post Office will often conduct audits of branches. This allows Post Office to assure and
verify its assets which are held in branches and to ensure compliance with regulatory and business requirements.
67. Audits can take place:
67.1 when a risk at a branch has been identified (eg. the branch is continually suffering shortfalls);
67.2 on the transfer of the branch to a new subpostmaster (an audit will often take place 6-9 months after the date of transfer); or
67.3 following a robbery or burglary.
68. sit is not possible for Post Office to visit and audit every branch each year, it also undertakes random sampled audits whereby
branches are selected at random to be audited. Whilst this has the benefit of validating the stock held within a branch and ensuring Post
Office's systems and practices are being adhered to, it also assists Post Office with risk profiling. For example, it can provide a baseline
measure of risk for Post Office i.e. if 5% of branches randomly selected
10w financial irregularities resulting in suspension it could be
projected that Post Office is exposed to a risk of 5% non-compliance across all its branches.
69. Whilst the precise nature of the audit will depend on the reason for the auidit (eg. if itis asia result of a robbery, audits are carried out to
verify the loss suffered) primarily an audit consists of an inspection of the cash and stock held by the branch. This may be followed by a
‘Compliance Audit to ensure regulatory and business requirements are met. Audits are undertaken on an entirely objective basis and will
include checks such as:
69.1 for branches with paystations or lottery terminals, ensuring any ovemight Transaction Acknowledgements (an automated way to
account for transactions carried out for clients suc!
70.
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Second Sight “Thematic Issues” [ANDY PARSONS TO COMPLETE]
- Transactions or Transaction Corrections not entered by the Sub-postmaster or staff -Sp
- Transaction anomalies associated with: - vs e:si't
© CASH or STOCK Remittances;
Pensions and Allowances
telecommunication or power failures
ATMs
Scratch Cards » Sr Revie
o ML
Foreign Currency
Bank / GIRO / Cheques -Sp0t Rev
Stamps, Postage Labels, Phone Cards or Premium Bonds
- Hardware issues e. g. printer problems, PIN pads, to ss swaped cut ar
ed
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Possible reasons for balance discrepancies
Gayle Peacock / Angela Van Den Bogerd
71. In Post Office's experience there are several reasons why a branch may encounter a discrepancy between the amount of cash and stock
‘on hand and the amount of cash and stock recorded on Horizon ~ this situation is commonly referred to as a “balancing discrepancy’.
72, _ Itshould be noted that some of the situations below may cause a gain for a subpostmaster or only cause a temporary loss. However, this
can cause real losses to be hidden:
72.4 If an error causes a surplus of cash in the branch, this may off-set a loss caused by another error. In that scenario, the loss error
may not be revealed, as the overall branch accounts will balance of show a Surplus; or
72.2 If the surplus error is later discovered and corrected via a TC, then in a later version of the aécounts there may be a loss even though
all transactions in that later period have been conducted correctly.
Example:
A branch suffers two errors, one creating @ £100 gain'and another causing a £100 loss. At the end of the trading period, the branch's
accounts will balance.
In the next trading period, the suplus error is discovered. 'A TC is sent to the branch which increases the amount of cash recorded in
the branch accounts. Throughout the rest of the trading period, al other transact
ins are conducted correctly. Nevertheless, the
result of the transaction correction is that at the end of the trading period, the branch has less cash than required by the branch
accounts and the subpostmaster therefore perceives that he/she
1s suffered a loss.
Miss-key :
73. Amiss-key is the termused when staff enter the wrong value of the transaction into Horizon at the manual stage of the transaction
compared to the actual amount of the transaction. The difficulty with a mis-key error is that only the employee who conducted the
transaction will be able to prevent or retrospectively identify this error.
Example:
A personal banking customer may wish to deposit £1000 into their account and the person serving the customer mistakenly enters
£10000 but only £1000 cash is taken from the customer. This would create @ shortage of £9,000 for the branch.
In order to rectify this mistake, the Banking Team within the FSC has to contact the associated client bank who in tum contacts its
customer. The customer will be asked to confirm the amount deposited at the branch. However, the receipt printed from Horizon and
provided to the customer will show @ deposit of £10,000 and, therefore, the rectification process relies largely on the goodwill of the
customer and their bank,
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Unless it can be agreed with the bank to reverse the transaction, there will be a real loss of £9,000 to Post Office as Post Office will
need fo account for the full £10,000 as the customer's account will have been credited with £10,000.
Connectivity
74, Each Horizon terminal requires a telecommunications signal in order to record transactions to the central Post Office data centre. Each
branch uses the signal to communicate with a data centre where all transaction data is sent, and this in turn communicates with Post
Office's clients (such as banks, DVLA and local authorities) to complete transactions. The router in each branch which communicates
with data centre needs to be connected to both a power supply and a communication channel to complete customer transactions.
75. _ If there is an interruption to the power supply during a customer transaction, for example, a power cut due to severe weather, the Horizon
user will be prompted, once the system is reconnected and the user is logged back on, with a message containing instructions on how to
recover the interrupted transaction. The message explains whether the customer's transaction was completed and whether any payment
needs to be received or made.
76. _ Similarly, if there is an interruption to the communication channel, for example, a telephone line cut and/or a failure to connect to the
mobile backup device during a customer transaction, Horizon will prompt the user with an on-screen messages explaining what to do to
and whether to cancel or retry the transaction.
77. Ifthe Horizon user does not follow the recovery instructions correctly, this could result in a balancing error. (Are ean ee iy issues
HAMS oerenas nies? coll
3
canoe?
78, can accept cheques as paymer
deposits for certain Par
accounts.
if a cheque is presented by: customer to pay for a transaction, but the transaction is accidently settled as @ cash transaction,
the value of cheques held in the branch recorded by Horizon will not match the value of the actual cheques held in the branch.
At the end of each day a cheque listing is printed from Horizon. This printout should be checked against the cheques held in
branch and if it does not match, Horizon should be corrected before remitting out the cheques to Post Office. After remming out
the cheques, a further cheque listing should then be printed to confirm that no cheques are held in branch. if a branch has not
ensured that the cheques in branch match Horizon’s record before remming out the cheques, then the cash in the branch will
show a shortfall and the amount that is received in the cheque processing centre will not match the amount that has been
entered onto Horizon. This will generate a Transaction Correction to correct the account.
79. Following the dispatch of cheques, the ‘cheque line’ an Horizon must be “cut-off” which will return the amount recorded as held in
branch to zero. If the cheques are not “cut off” at the end of the day the cheque listing on the following end of day procedure will not
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agree with the actual value of cheques held in branch. This is corrected in exactly the same way by amending the “cheque on hand”
figure to show the correct value of the actual cheques held in branch. The value of the cheques in branch is then sent out before a
further cheque listing to confirm a zero entry is printed.
Cash Declarations
80. At the end of each day a cash declaration is made by the staff in the branch for every stock unit which has been used, even ifit's only
been used to transfer cash or stock to another stock unit within the branch. [Can we explain what stock units are and how they work in
branch?] The cash should be counted and declared accurately by denomination before 19.00 hrs. each day. Its this process which
informs Post Office's Cash Management Team how much cash the branch is holding vihich in tum informs the Flexible Planning system
[What is this?] how much cash should be sent to or retumed by the branch on their next scheduled remittance.
81. Onabalance day [when/what is a balance day?] each branch should complete a daily and a weekly cash declaration, On any other day
each branch should only complete a daily cash declaration. Once
‘cash has been counted and declared Horizon will check the
declared cash against the day's transactions and inform the user whether there's a discrepancy between the cash declared and the
expected cash in branch compared to the transactions for that day;If a discrepancy is identified then the gash should be recounted and
the paperwork re-checked. If there has been an error in the counting at he cash, then the cash should be re-declared. Transaction and
event logs plus a balance snapshot can be printed from Horizon to check for any errors or amendments which may be needed. Itis also
best practice to open and check any stock and cash poliches made up ready to retum to Post Office. If the pouches are checked they
need to be reversed out of Horizon and once the contents have been checked a fresh pouch should be used to make a new remittance
out.
82. Ifthe error cannot be idehttifed, then the Gisorepancy should be rs by the supoaeeser and the cash should be re-declared to
reflect any adjustments that have been made tote cash,
Logging onto and.transacting from the wrong stock unit
83. Each staff member logs onto Horizon with their own user ID and password and attaches themselves to a stock unit containing cash and
elves to the wrong stock and serves customer or transfers cash or stock this must be
corrected as soon as possible, by either reversing the transactions and putting them through the correct stock unit, or calculating the
cash value of the transactions and transferring the money to the correct stock unit. In theory, there should be no material loss to the
branch as any losses in one stock unit will be compensated by the gains in the other stock unit. A miss-balance will usually occur if the
mistake is not correctly rectified.
Miscounting cash on hand
84, Cash must be physically counted at the end of each day and when completing a Branch Trading Statement. When completing the
physical cash count, notes and coins can sometimes be miscounted or missed altogether. When counting cash quickly a bag of coins or
a bundle of notes can also be missed.
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85. Another instance of where this can happen is where a Post Office product is sold on the retail side of the business. Most Post Office
products must be sold from the Post Office counter in the branch premises. However a few Post Office products, such as lottery
scratchcards, are permitted to be sold from the retail business. However, itis the subpostmasters responsibility to make sure that any
cash taken from the sale of such products is transferred from the retail business to the Post Office side, and properly counted in any
cash declaration.
86, Cash remittance pouches that have also been made up in preparation for the Cash in Transit collection drivers may be erroneously
counted as part of the cash declaration. Horizon does not include this amount within the cash holding figure and, therefore, the branch
would be declaring a gain in this instance.
‘Mixing retail and Post Office business
ing these two sets of cash can lead to Post
87. Generally, a branch must keep physical separation between retail and Post Offi
Office cash being lost to the retail business,
ert Theft
cash count and declaration is made, but it is not possible for Post Office to remotely identify when the theft
accompanied by an effort to disguise the theft eg. creating false
__ Recording more cheques as being dispatched than are cleared,
“itis possible to identify the user ID that was used to undertake these transactions but itis difficult to prove
exactly when the actual theft occurred.
(®) Theft from customers can also occur and may not necessarily result in a branch miss-balance. Example a
member of staff targets a vulnerable Post Office Card account customer and confuses the customer to the
extent that the staff undertake the transaction twice but convince the customer it has only happened once.
The staff then takes the amount which is surplus, but the branch will still balance. This process relies on
‘customer complaints or tip-offs to identify the theft.
872 Giving money out instead of accepting money
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At the end of a customer transaction, payment needs to be made to or received from the customer. Even if the
transaction is correctly recorded on Horizon, branch staff may take or hand out the wrong amount of cash.
Example:
A business banking customer may present documentation to deposit £1000 into their business banking
account. If at the end of the transaction £1000 in cash is given to the customer instead of taking £1000 in
cash from the customer there will be a shortage fo the branch of £2000, made up of the deposit entry £1000
being correctly input onto Horizon (Horizon then expects to receive £1000) and the settlement out to cash of @
further £1000 which will be deducted from the cash in branch.
However, this error could be as simple as miscounting ¢ash before handing it to the customer.
873 Accidental loss
Losses may occur accidentally in branches, For example, money dropped in bins with rubbish, money dropped
or knocked into mail bags, and money left on counter tops which is snatched by a customer without branch
knowledge.
In the first two of these examples the honesty of the finder and the ability to identify the money as coming from the
the branch.
branch is required to return the money
In the'third exariple unless the person is caught in the act of snatching the cash it is probable that the loss would
_only be discovered at the end of day cash declaration or at the time of completing the Branch Trading Statement.
The branch staff may be unaware of haw the loss had occurred.
Transaction Acknowledgements
88. Transaction Acknowledgements (TAs) are an automated way to account for transactions carried out for the following Camelot
(Lotteryy/Paystation™/Post & Go. These transactions are carried out on a separate piece of equipment from the Horizon terminal and
therefore the accounting needs to be accounted for on Horizon in order for the branch to balance. Prior to TAs being launched the
subpostmaster would have to obtain the relevant print outs from the equipment and then input these figures onto Horizon and reconcile
any cash owed. The launch of TAs removed the need for the subpostmaster to manually input the figures onto Horizon
89, The transactions for Camelot, pay and Post and Go are processed overnight and the “Transaction Acknowledgement" is sent to
the branch the following morning confirming all transactions that took place the previous day. The Transaction Acknowledgement must
be accepted by the first person who logs on and the corresponding net cash relating to all transactions for the relevant TA should then
bbe paid into the stock unit in which the TA is accepted. If the Horizon user accidentally pays the cash amount into the wrong stock unit
this will be identified when the end of day cash declaration is competed as one stock will be over by the amount of the TA and another
stock will be short by the same amount. Altematively, if the subpostmaster accepts the TA but does not pay in the relevant cash then
there will be a shortage.
Outstanding transfers between stock units
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90. Where a branch has more than 1 stock unit in use there may be times when cash and/or stock are transferred from one stock to another.
For example if stock unit AA is running short of cash, stock unit BB may transfer money to allow customer service to continue smoothly.
The user in stock unit BB should choose the transfer out option in Horizon and choose the correct stock unit (in this case stock unit AA)
and transfer the cash out. A receipt is printed which is kept in stock unit BB to confirm this. The user in stock unit AA then needs to
‘accept the cash on Horizon and print their own receipt to confirm this. At this time a Branch Trading Statement or (at any other time) a
report called “Transfer Reconciliation” can be printed from Horizon to confirm that there are no outstanding transfers pending and that all
totals are equal to zero,
Transaction Corrections
a1 Transaction Corrections (TCs) are electronic notices generated remotely from the FSG te correct transactions which have been carried
out incorrectly on Horizon. Depending on the type of error a TC may also have a financial impact on the branch. Where this is the case
the physical act of adding or removing the cash must follow the acceptance 6f the TC. Only individuals with manager or supervisor level
access to Horizon can access and manage these messages when prompled by the FSC. All TCs must be processed before the last
stock unit in the branch balances otherwise the Branch Trading period roll over cannot take place, I's recommended that TOs are
processed as soon as conveniently possible. TCs with a financial impact can either be made good to cash or cheque, or settled centrally
if the value is over £150 so that FSC can arrange to recover a loss by debt recovery. Further detail is provided [above].
DVLA Motor Vehicle Licences
92. Failure to follow the correct process for accounting for MVL discs ( nly referred to as tax discs) can also lead to miss-balances in
branch. Branches will receive MVL dises from Post Office which they have to fem into their stock using Horizon.
93. When the discs have passed ithe time where they can be put onto a car, the branch is responsible for destroying the discs and following
a process to inform Post Office that they have been destroyed. When destroying the discs, ifthe branch does not follow all of the steps of
“spoiling the dise” and remitting it out to Past Office,
been destroyed. When the branch comes to balance and a full count of the discs is undertaken as part of the stock balance, the number
94. Failure to follow the feversal procedure for 4 MVL disc may also lead to a branch discrepancy. For example, a customer asks to buy a
car tax disc and the transaction is completed on Horizon, but no payment is actually taken, the branch has to reverse the transaction
and the disc. There are a number of steps that the branch needs to follow. The branch has to reverse both the disc and the payment. If
they only reverse the disc out of the system then the stock of discs will balance, but the branch will miss-balance in terms of the cash.
Cash and stock remittance errors
44 Cash remittances
(8) Ifthere is mistake made between the ariount that is remmed in or out and what is received or sent by or to
the Post office cash centre, then this will lead to a branch discrepancy. For example, if the branch has
bagged up £25,000 to send to the cash centre but enters £20,000 into the system then there will, in the
short term, be a shortage of £5,000. If the cash has left the branch then the mistake cannot be rectified by
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(b)
(a)
(b)
the branch. The cash will be counted at the cash centre and a Transaction Correction will be sent to the
branch to reetify the branch account,
Ifa branch has an ATM machine, then it will receive a separate cash remittance for ATM. This is because
the notes in the ATM machine have to be prepared to a certain standard to meet regulations and,
therefore, cash used over the counter cannot be transferred into the ATM without the prior consent of the
Cash Management Team.
Branches receive their stock (postage, MVLs etc) fror ‘Office either via Cash in Transit or Royal Mail
Special Delivery. The branch is responsible for that the amount of stock received matches the
onto the correct lines in Horizon,
advice note delivered with the order and remming the
Branches are required to return some value stock items back to Swindon. This is usually connected to
Special Stamps which should fem out the stamps on Horizon
ithdrawn from sale. The branch has
and retum the amount via the same method as receipt. Swindon will, therefore,receive and process large
amounts of stock and cash and only check 10% of stock retumed. If the branch does not identify the
mistake quickly én yyed then there may be way of verifying any
and the pouch has been
discrepancy.
29
POL00040066
POL00040066
‘Schedule 1: List of Products
Prepared for the purposes of mediation
He
oe
ie,
a
es
oer
;
30
\4A-LIVEI28013073.3,
POL00040066
POL00040066
Prepared for the purposes of mediation
‘Schedule 2: Glossary of Post Office terms
-
,
31
\4A-LIVEI28013073.3,