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Losses & Gains Quick Guide
for Crown Managers
Version 1 (Sep 2008)
CONTENTS
Confidential
Section 1 Introduction and Purpose
Section 2 Supervisory Checks (misbalance checks &
surprise checks)
Section 3 Transaction Corrections
Section 4 Counter Losses & Gains Reporting
Section 5 Monitoring Records
Section 6 Loss Escalation Process
APPENDICES (For reference)
Appendix A
Annual Certificate of Compliance (ACC) — This
workbook has been issued directly to Crown Offices
Appendix B
Appendix C
Appendix D
Appendix E
Appendix F
Appendix G
Appendix H
Supervisory / Balance Checks
(Loss and Gains Policy Action Workbook)
Local Record of Stock Users
Report from Crown Office Managers for losses
over £250
Action Matrix Flowcharts
(a — Multi User Stock / b — Individual User Stock)
Record of interview / actions agreed
Escalation Interview Action Plans
(Loss and Gains Policy Action Workbook)
Branch Enquiry Form
Policy Monitoring Tool - Loss Management System (LMS)
N=
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Data Capture Workbook
Data Analysis Workbook
Loss and Gains Action Workbook
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Section 1 — Introduction to Policy and its Purpose
The impact of losses in the Crown Office Estate is having a serious effect on our
ability to deliver the three2eleven plan to bring us back into profitability by 2011.
Our actual Crown Office losses in 2007/08 amounted to £2.2M.
The Policy has been redesigned to provide clear and consistent guidance to Crown
Office Managers and their Assistants as to their responsibilities for the recording,
maintenance & monitoring of losses and gains.
The main Policy, the quick guide, and Loss Management System, will provide Crown
Office Managers with the tools to be able to effectively manage losses and gains
and to take appropriate measures to reduce losses.
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Section 2 — Supervisory Surprise Checks & Misbalance Checks
Supervisory controls are designed to assist Crown Office Managers in effectively
minimising the risk to the business assets at their offices and to protect individuals.
As part of these supervisory controls, the office management team are responsible
for performing random, surprise checks on all stock units (either individual or multi-
user) on a regular basis.
There is also a requirement for misbalance checks to be performed on all stocks,
both ‘multi user’ and ‘individual’, which misbalance by £30 and over. However, these
checks are over and above the need for supervisory surprise checks and can be
performed by both managers and experienced colleagues.
To meet the minimum standard, a programme of supervisory surprise checks
must:
e be performed by the Crown Management Team who will check that
colleagues complete a cash declaration towards the end of each working day;
e include monitoring, by Managers, of the levels of cash being held by all
colleagues;
@ include every stock unit (e.g. Main Cash, ATM, SVM, Postshop cash and value
stock, Giro, Bureau De Change and Lottery etc.); Main Cash Stocks held by a
Crown Office Manager should be checked by a Crown Area Manager or
representative.
© be treated separately to misbalance checks;
© check all cash, stock and vouchers to hand and reconcile to the last declared
balance; Print and check for ‘outstanding dockets’.
e ensure each stock unit is checked at least once in a three month period,
where the stock is rotated, or once in an eight week period where the stock is
held by a single colleague. i.e. Individual stocks and when a multi user stock
has been balanced by the same colleague every week due to the way duties
have been written (these multi user stocks should be treated the same as
individual stocks for supervisory check purposes only).
e be supported by a record of stock checks with records of surprise checks
being clearly distinguished from misbalance checks and retained for two
years; The checker should clearly identify themselves on the local records.
(Appendix B — Loss and Gains Action Workbook)
e include a variation on the days of the week used for surprise checks, so as to
avoid any pattern that will become known to individuals
@ ensure a Manager's signature is recorded onto the final balance record of a
checked stock and ensure the stockholder or an independent witness is
present at the time of the check. A record of the check, the witness and
balance result ‘pre’ and ‘post’ check should be entered into the Loss & Gain
Action Workbook.
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There is a requirement for Crown Office Managers to complete :-
For all Stock losses and gains of £5 or more
Using the L&G Data Capture Workbook, enter -
Financial Year
Week number
Stock Unit ID
Value of Loss / Gain
Name of individual or all individuals who have served from that stock unit
during the balancing period
Details of associated Transaction Corrections — values, linked to the
original trading period and relevant stock unit
For all surprise & misbalance (over £30) checks
Using the L&G Action Workbook, enter -
Loss & Gains Quick Guide for Crown Managers Sep08.doc3 2008)
Financial Year
Week Number
Stock unit
Name of Stock User
Original Loss / Gain result
Type of check (surprise or misbalance)
Result of Loss / Gain, post check
Discrepancy comment, if required
Name of Crown manager or substitute performing the check
Position or grade of checker
Ensure Horizon Weekly Balance Report is signed & dated and retain
documentation relating to check for 2 years
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Section 3 — Transaction Corrections
Branch Trading should be undertaken in accordance with the latest Branch Trading
booklets, which include details of balancing stock units, production of the Branch
Trading Statement, production of reports and despatch of documents
If a Transaction Correction is required,
¢ Crown Office Manager should contact branchcontrolf~
email using the discrepancy form (See Appendix H). NOTE
Stock error, please identify the product.
e Branch Control contacts relevant product team within Product & Branch
Accounting
e Product & Branch Accounting investigates and issues the associated TC
immediately if appropriate
e Office accepts the Transaction Correction on receipt by following the
instructions as detailed on the Transaction Corrections
e Office completes Branch Trading , posting only true losses and gains
isa
Note - The value in Local Suspense at Branch Trading should be resolved by
selecting the Write-Off to P & L option to prevent losses/gains rolling into the next
period
USEFUL CONTACTS
e Any query in re:
branchcontrol¢”
‘ion Corrections, please email
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Section 4 — Counter Loss & Gains Management Reporting
4.1 —Losses/Gains between £5.00 and £249.99
Crown Office Managers must undertake to perform the following in respect of
Losses/Gains:
To report immediately, via telephone, any loss, irrespective of value, where
dishonesty is suspected, whether declared or discovered on a
supervisory/balancing check, to the NBSC Helpline on} j
Records of losses and gains do not need to be sent from the office, unless
requested by your Crown Area Manager, Investigation or Compliance / Audit
Managers. These records must be made available to any of those mentioned
at the time of a visit.
Where a stock unit incurs a loss or gain over £30.00, the Crown Office
Manager must perform a balance check of the cash/stock and vouchers on
hand. If the relevant colleague cannot be present at the balance check, an
alternative witness must be present.
If the resultant balance check reveals a further loss which raises it above the
£250 threshold, the Manager must call the NBSC as per the process in Section
62.
4.2 — Losses over £250.00 (Appendix D)
Crown Office Managers must undertake to perform the following in respect of
losses over £250.00. (NOTE — Crown Office Manager, if on duty, should take
responsibility for ensuring the following action is taken)
Crown Office Manager to complete the report for losses over £250.00
(Appendix D) and e-mail this form to “Fraud Team Post Office Ltd” e-mail
address as soon as possible after the discovery of the loss. This form should
be completed even if the loss is “known”.
Ensure all colleagues who had access to the stock, complete the Investigation
Team’s "Counter Loss over £250 — Individual Report” and these should be
retained along with the required event and transaction logs until requested,
pending any future investigation.
In the event that a transaction correction (TC) is received for a loss previously
reported over £250, the “Fraud Team Post Office Ltd” must be e-mailed
giving details of the amount, stock unit, date and Branch Trading Period it
relates to. It is important this is done as soon as the TC is received to avoid
any unnecessary extra work being undertaken by the Investigation Team on
a reported loss.
Crown Area Manager to receive a copy of the loss report form and to ensure
that appropriate local action taken by Crown Office Manager, including
support requested from Compliance and OE Teams if required.
Finance Team to receive a copy of the report form as pre-warning of loss
performance.
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4.3 — Losses over £2000 (Appendix D)
As above for losses over £250.00, but additionally a call must be made to the
NBSC Helpline on!)
of the loss.
Crown Area Manager to receive a copy of the loss report form and to ensure
that appropriate local action taken by the Crown Office Manager, including
support requested from Compliance and OE Teams if required.
Copy of loss form should be circulated to both your Regional Manager and
your Finance Analyst
“by the close of play on the day of discovery
Section 5 — Monitoring Records
Stockholder records (Appendix C and Appendix B)
Crown Office Managers must ensure the following actions are undertaken:
An accurate record must be kept of all stock unit holders, whether individual
or ‘multi user’ on the workbook provided. This workbook needs to be
completed on a weekly basis and must be kept up to date.
The stockholder record allows Crown Office Managers to record details of
Surprise Checks, which are to be conducted on all stock units at least twice a
year.
The stockholder record also allows Crown Office Managers to record details
of Balance Checks, which need to be conducted on all losses and gains over
£30.00.
Stock units must be rotated on a regular basis. This simple task will prevent
build up of losses in a till and provide a deterrent to anyone who considers
falsifying their balance. The maximum period for an individual holding and
balancing the same stock is 8 weeks. This would also apply to multi user
stocks where the same individual balances every week due to the way the
duties are scheduled. All other rotating stocks should be checked once in
three months as a minimum.
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Section 6 — Loss Escalation Process & Trigger Points
MULTI USER
STOCKS
Escalation
Performance
Action
Stage 1
3 losses of £30 or more over a
period of 3 months (13 weeks)
Informal Interview — Crown
Office Manager - with
colleagues, identified as
having access to the stocks
that have incurred losses, to
raise awareness of their
performance and to reiterate
the Loss Escalation Process.
Action Plan should be agreed
and notes taken and signed.
Consideration given to a
switch to individual balancing
if appropriate at this stage.
Stage 2
Further 3 losses of £30 or more over
the period of 3 months following
the Stage 1 interview.
2™ Informal Interview —
Crown Office Manager - to
review performance and agree
the level of support required.
Action Plan agreed and notes
taken and signed. Notice
given to colleagues that they
will switch to individual
balancing by stage 3 if
improvement is not
forthcoming and switch is not
appropriate at this stage 2.
Stage 3
Further 3 losses of £30 or more over
the period of 3 months following
the Stage 2 interview.
3™ Informal Interview —
Crown Office Manager -
Colleagues moved onto
individual stocks. Action Plan
agreed and notes taken and
signed.
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INDIVIDUAL
STOCKS
Escalation
Performance
Action
Stage 1
3 losses of £30 or more over a
period of 3 months (13 weeks).
Informal interview — Crown
Office Manager - to raise
awareness of loss
performance, agree the level
of support required and to
reiterate the Loss Escalation
Process.
Action plan with notes signed
Stage 2
Further 3 losses of £30 or more, over
the period of 3 months following
the Stage 1 interview.
Informal interview — Crown
Office Manager to review
performance and agree the
level of support required and
to reiterate the Loss Escalation
Process.
Action plan with notes signed
Stage 3
Further 3 losses of £30 or more, over
the period of 3 months following
the Stage 2 interview.
Formal interview — Crown
Office Manager to review
performance and agree the
level of support required and
to reiterate the Loss Escalation
Process.
Notification that all future
losses of £5 or more will be
taken into account.
Action plan with notes signed
Stage 4
Further 4 losses of £5 or more, over
the period of 6 months following
the Stage 3 interview.
Formal Interview — Crown
Office Manager to review
performance, and agree the
level of support required and
to reiterate the Loss Escalation
Process. Reiterate the possible
consequences of reaching L&G
Escalation Stage 5.
Stage 5
Further 3 losses of £5 or more, over
the period of 6 months following
the Stage 4 interview
Formal Interview with
appropriate management
level from outside of
immediate crown office, to
review performance and
consider disciplinary action
under the Conduct Code.
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Additional Notes
Managers may apply some discretion should a ‘one off large loss’ be incurred with
likely mitigating circumstances e.g. known giro error, accounting error identified etc.
It is essential that a Crown Office Manager interviews colleagues as soon as possible
following escalation and prior to the following weeks balance, otherwise allowances
will need to be made in the escalation process e.g. cannot issue Stage 2 interview
until Stage 1 interview undertaken.
There may be occasions when a loss will need to be recorded against an individual
within a multi user stock rather than the whole team. e.g. Payment not taken by
colleague for MVL transaction resulting in shortage for that colleague alone and
clearly identified
For all interviews, including Multi User Stock Escalation Interviews, it would make
good practice to encourage an individual to be accompanied by a friend or CWU
rep if they so wished, although not mandatory. However, remember that all
interviews should take place prior to the following week's balance and should not
be delayed.
At any time action taken by line managers may be to either uphold the decision to
progress through the escalation process or to reduce standing to a lower ‘stage’ once
any mitigating circumstances or Transaction Corrections are fully understood. All
decisions must be clearly documented within the action plans agreed.
Trainees / new recruits and individual stocks
New Entrant Trainees should be given their own stock during their probationary
period in order to assess their suitability for counter work from the results of their
balancing record. A decision to confirm the ‘trainees’ appointment should only be
made by the Crown Office Manager if their level of losses meets the Business
standard at the six or twelve month stage. A decision would then be made whether
to extend the trial period further. Although individual losses should be recorded in
the Loss Management System, ‘Trainees’ will not progress through the Loss & Gains
Escalation Process, however, performance will be monitored and discussed as part of
the Trial Report procedure.
It is likely that more mistakes will be made by trainees and the trial report process
should be used to ensure that the appropriate level of support is provided to an
individual who would have triggered loss ‘escalation’. Discussion should take place in
respect of action required and the individual made aware of what action would have
been taken under normal circumstances. Poor loss performance may result in a trial
extension or not passing trial but all mitigating circumstances should be carefully
explored, supported and documented. Discussion should also take place with the
Crown Area Manager in respect of additional training opportunities being explored.
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Criteria for converting Multi User Tills to Individual Stocks
At any time that the office loss level rises to an unacceptable level, action may be
taken to convert the whole office approach to stock control from ‘multi user’ to
‘individual’ till ownership. Discussion should take place between Crown Area
Managers, Crown Office Managers and possibly Investigation, Audit/ Compliance
and Operational Efficiency Tear Managers as appropriate.
On the job support and training should be offered to individuals to help them
prepare for this conversion and on site facilities should be sufficient to ensure an
effective level of security is provided to enable individual stock control.
It is clear that, in some cases, the introduction of ‘individual stocks’ will require an
investment of additional time and may reduce flexibility at the Counter. It is
therefore essential that the cost of converting multi user to individual stocks is
calculated through a review of current duties, performed by the Operational
Efficiency Team, and a decision taken of whether it is appropriate to convert the
whole office approach or just part of it, ie. a mix of multi user and individual stocks.
This will depend on the individual circumstances and risk to each Crown Office
A recovery plan should be developed that supports the monitoring of performance
over an agreed timescale with the intention of returning to ‘multi user’ stocks as
quickly as possible.
Trigger point for action
When the value of losses over a period of time (reviewed quarterly) reaches an
unacceptable level, action should be taken. eg. The monthly trend of loss and gain
performance is above the budget set for the office or the office may be one of the
worst 10%. At this level, losses are likely to be having a detrimental effect on
contribution and profit and loss, outweighing the benefits of flexibility encouraged
through a multi user till approach.
If an acceptable level is exceeded then a request should be made to the Operational
Efficiency Team to review duties and a decision then made to either introduce
individual stock balancing for the whole office or just for individuals. The agreed
plan should also include a timescale.
Support from the Investigation Team must be requested by the Manager,
should there be a degree of suspicion or possible theft.
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Appendix C
Local Record of Stock Users
Multi User & Individual Stocks
Branch .......cccceeeeeeeees BC Codes ......ceeeeeeeeeeeees Week no?- ...........00000eeeee
Stock Unit Name of Staff ** Stock Unit Name of Staff **
(who have had (who have had
access to stocks) access to stocks)
Create additional rows if necessary or photocopy additional hard copy forms.
** Name of clerk and branch name if clerk is borrowed temporarily.
Branch Manager Signature:- sss eeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeees
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IN CONFIDENCE
Crown Office Counter Loss.>. £250...
Email this form to ‘Fraud Team Post Office Ltd’ address:
e _..assoon as possible after the discovery of the loss. This form should be completed even if
the loss is “known”.
Crown Area Manager to receive a copy of the loss report form and to ensure that
appropriate local action taken by BM, including support requested from ni Gembliance and
OE Teams if required.
e Finance Team to receive a copy of report form as pre-warning of net loss performance.
(You do not need to submit any paperwork until a member of the Investigation Team contacts you.)
Crown Office Counter Loss > £2000
e As above for losses over £250.00, but additionally a call must be made to the NBSC
Helpline on y the close of play on the day of discovery of the loss.
Report the loss to your Crown Area Manager by email.
This form should also be emailed to your Regional Manager and Finance Analyst.
(You do not need to submit any paperwork until a member of the Investigation Team contacts you.)
Please read this form carefully and answer all of the following questions
a) It is essential to supply the following information for ALL Counter, Bureau, Postshop, SVM, ATM, and Error Notice losses of £250 and over, as soon as
the C/A is completed.
b) Please obtain a separate report from each of the clerk/s who dealt with the stock and hold these reports locally, pending any future investigation.
9 You should abstract the event and transaction logs for the whole week of the loss detailing every activity within the stock (ie. all sessions, all
transactions, Normal and Reversals).
Office Name:
Branch Code:
Postcode:
Telephone Number:
TP & CAP:
Week Ending:
Amount:
Date Loss Identified:
Date of Last Clear Cash Declaration:
List Users of Till:
(include full names)
IN CONFIDENCE version2 — Nov 07
IN CONFIDENCE
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Type of Stock:
ie. BM Main safe, Counter stock unit
(include indicator) / Bureau De Change /
Postshop
(state whichever applies)
Have all Cash, Stock & Vouchers been
checked: Yes/No
Have all fitments (pedestals, safe, inserts
etc) and waste bins been searched: ?
Yes/No
Any other comments:
(i.e. is there any explanation for the loss,
error notice expected)
Were there any losses/gains of a similar
amount during this week, or last week: ?
If yes, give details:
What was the date of the last spot check &
result: ?
Are losses by the Officer(s) involved giving
cause for concern?
If yes, give details:
Are losses in the office giving cause for
concern?
If yes, give details:
Is there anything known which may
provide the Officer(s) with a motive for
dishonesty?
If yes, please include a separate report (For
losses over £250 only circulate to
Investigation Team):
Is there any reason to doubt the honesty
of any other Officer(s)?
If yes please include a separate report (For
losses over £250 only circulate to
Investigation Team) :
Reported By: (insert full name & job title)
Date:
E Mail a copy of this form to Fraud Team Post Office Ltd. For those offices without access to e mail, please
forward a copy of this form to:
Post Office Ltd Fraud Team
PO Box 1
Croydon
CRO 1WN
This report should be retained securely within the branch for 2 years and made
available upon request to Senior Management, Fraud and Compliance Managers
IN CONFIDENCE
version2 — Nov 07
Crown Office Network Loss & Gains Policy
Flow Chart (a) Multi User Stocks
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STAGE 1
INFORMAL INTERVIEW - Crown Office Manager
3 Losses in 3 months or less
(Losses of £30 or more)
Record agreed actions in Loss Management System Action Workbook
Consider switch to Individual Balancing
\
>»,
STAGE 2
INFORMAL INTERVIEW - Crown Office Manager
6 Losses in 6 months or less
(3 further losses of £30 or more following Stage 1 interview)
Record agreed actions in LMS Action Workbook
Consider switch to Individual Balancing
J
>
STAGE 3
INFORMAL INTERVIEW - Crown Office Manager
9 Losses in 9 months or less
(3 further losses of £30 or more following Stage 2 interview)
Record agreed actions in LMS Action Workbook
Switch to Individual Balancing
a
Next Stages - Follow Individual Stock Flow Chart
Appendix E
Crown Office Network Loss & Gains Policy
Flow Chart (b) Individual Stocks
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STAGE 1 - INFORMAL INTERVIEW - Crown Office Manager
3 Losses in 3 months or less
(Losses of £30 or more)
Action Plan agreed and notes signed. Record interview in LMS Action Workbook
ag
STAGE 2 - INFORMAL INTERVIEW - Crown Office Manager
6 Losses in 6 months or less
(3 further losses of £30 or more following Stage 1 Interview)
Action Plan agreed and notes signed. Record interview in LMS Action Workbook
>
y
X
STAGE 3 - FORMAL INTERVIEW - Crown Office Manager
9 Losses in 9 months or less
(3 further losses of £30 or more following Stage 2 Interview)
Notification that all future losses of £5 or more will be taken into account.
Action Plan agreed and notes signed. Record interview in LMS Action Workbook
Warning of consequences if failure to improve
_
id
y
XN
STAGE 4- FORMAL INTERVIEW - Crown Office Manager
4 Further Losses in 6 months or less, following Stage 3
(All Losses of £5 & over will be taken into account following Stage 3 Interview)
Action Plan agreed and notes signed. Record interview in LMS Action Workbook
Warning of consequences if failure to improve
Tr,
Ve
Q
STAGE 5 - FORMAL INTERVIEW
Appropriate Management level from Outside of Immediate Crown Office
3 Further Losses in 6 months or less, following Stage 4
(All Losses of £5 & over will be taken into account following Stage 4 Interview)
Action Plan agreed and notes signed. Record interview in LMS Action Workbook
Consideration of Disciplinary Action under Conduct Code
y
_
vy
Appendix E
Loss & Gains Policy in Crown Office Network
Appendix F
Record of Interview
Employee Name
Branch Name
FAD Code
ESCALATION STAGE (please circle)
Multi User 1 (Informal) 2 (Informal) 3 (Informal)
Individual 1 (Informal) 2 (Formal) 3(Formal) 4 (Formal)
Notes of the interview and agreed action(s) and dates must be recorded on this form which must
be filed at the branch office.
If the clerk knows of any reason(s) which may have caused the discrepancies or any improved
methods of working which could help to reduce losses in the future, then these should be
discussed with the Branch Manager.
The Branch Manager should also discuss procedures for dealing with transactions, vouchers etc.
This discussion may identify that additional support and / or training is required. Actions should
be noted below.
Date of interview:
Notes of interview:
Action agreed:
Signed:
Customer Service Consultant Branch Manager
Witness (Friend or CWU Rep)
This report should be retained securely within the branch for 2 years and made
available, upon request, to the Area Manager or Investigation Team. Above details should
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be entered onto the Loss Management System Workbook