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From: Rod Ismay GRO }
Sent: Fri 29/08/2014 58 PM (UTC)
To: Pheasant, Andrewf
Bcc: Rod Ismay
Subject: RE: SS Doc - Rod's feedback - 29/8 2pm update
Andy,
Further update on some points.
I am conscious that I am sending you a lot of comments now and you have a barrage of input from other people too,
so I want to help ensure its clear.
This morning’s updates are for the points I marked as “ACTION O/S” in yesterdays mark up.
Section 14 — The comments that “Damaged cheques will never be the cause of loss to a branch” (ie. Where they are
mutilated in transit or at the cheque processor) - ANSWER O/S still
Section 17 — Point 4.2.3 in the detailed response to “Audit Trail on Girobank Deposits” - ANSWER O/S still
Section 17 — Point 5.1 about one part paying in books. - ANSWER O/S still
Section 18 — Errors & Fraud Repellency — point 6 of the response. Suggestion below.
“With the exception of the early phases of Horizon Online rollout, comms interruptions have typically been of short
duration and therefore we would expect the counter colleague faced by the recovery prompts to remember what
transaction they were performing and what stage it had got to at the point of interruption (ie. What product it was,
whether cash had exchanged hands etc). In that situation the criticism would not seem fair. During Horizon Online
rollout and in other rarer cases, longer interruptions have arisen and we acknowledge that it could have been the next
day or after a change of staff on split shifts when the recovery prompt came up. However, in such a situation
common sense would indicate that the original clerk would make a note of what transaction they were performing at
the point of failure (and what stage it was at) before finishing their shift. In any situation the branch would be able to
call the Helpline for advice.”
Section 18 — point 7 of the response. [Should be checked by IT too]
“Whilst the Branch User Forum, established following the first report, is clearly an example of a process for reviewing
and improving Horizon, Post Office has had other processes and forums in earlier years. These have included
subpostmaster representation in design forums and in user acceptance testing groups. For several years Post Office
had a formal Problem Management Team in Service Management. Post Office has also had joint working groups with
NFSP forums focussed on conformance, efficiency and security.”
Section 19 — One Sided Transactions — not sure I understand how paragraphs 6,7,8 of the response have been drafted.
I would suggest the alternative to them below.
6. Comms failures can have 2 broad impacts. The main impact would be the type of interruption that is addressed by
recovery prompts that are referred to separately in this document. The other impact (which would affect the
customer, not the subpostmaster) would be where a debit card payment was interrupted after the bank had
ringfenced the customer funds for the payment but before the counter confirmed that the transaction was complete.
This can lead to a situation where the transaction is declined, there is no issue for the branch accounts, but the
customer is no longer able to draw down on funds in their bank account because they remain ringfenced for the
original attempted transaction. Banks have routine processes to clear down ringfences within a couple of days or on
an accelerated basis by specific enquiry. This would not affect the subpostmasters accounts but could of course lead
to customer complaints.
7. Where examples of recovery issues have been raised in spot reviews, we have responded to those specific cases. If
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Second Sight has specific other examples from mediation then we would be happy to investigate such specific
examples.
8. Otherwise we consider that by properly following recovery places, Post Office has safeguards in place and that
Subpostmasters would not be disadvantaged
OTHER SECTIONS
6. MVL
The barcode on V11C forms does not define the duration of the tax disc and therefore the assertion, as stated, is not
valid. A V11C is printed with boxes on it for the customer to choose whether they wish for a 6 or 12 month disc. Upon
scanning the V11C, which identifies the registered vehicle, the counter colleague is prompted to enter whether the
customer wishes for a 6 or 12 month disc for that vehicle.
However, if it is true that erroneous barcodes were printed on V11C’s then if so it could lead to a charge based ona
different vehicle and potentially different tax band.
That would disadvantage the customer, if neither the customer nor counter colleague spotted the unexpected price.
However, Horizon would then invite payment of that amount and so long as the counter clerk took payment of the
amount on screen then the branch would not have a shortage or gain from the transaction. It would simply be that
the customer paid the wrong amount. That is a different issue, but not in scope of this Second Sight Review.
7. Lottery — paragraph 13 of the response related to the “complication”
Suggest replacing paragraph 13 with the following:
At paragraph 7.7 of the Report, Second Sight highlight the “complication” of timing of processes. Whilst Lottery
branches are, and were, advised to balance the following morning, that was the same for every day of the month for
them (it was not a difference or “complication” of month end). The difference is that non lottery branches were
encouraged to balance on Wednesday night. The most obvious confusion from that would be for serial
subpostmasters who ran both lottery and non lottery branches, but that is not the issue raised by Second Sight. We
do not therefore agree that the “complication” as raised is a complication. It is rather a difference of process for
different branches.
In practice many branches chose not to follow “next day” guidance and may have balances several days later. Post
Office operational instructions have however always focussed on next day accounting.
What has not been raised but may be worth noting is that a significant feature of non conformance prior to the rollout
of Transaction Acknowledgements was for branches to bring stock into their records by way of “stock adjustments” as
opposed to be way of the advised “stock remittance” process. Stock adjustments have the accounting effect of sales
or sales reversals, impacting stock and cash records. That non conformance by Subpostmasters often created
confusion for them and in some cases may not have been easily visible if it was offset by cash discrepancies of similar
magnitude on other products.
Thanks, Rod
Rod Ismay I Head of Finance Service Centre
ince — 2014 Winners Public & V«
Best Finance Team 2014 Best Annual Report & Accounts.
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BusinessFinance y
Awards 2014
From: Pheasant, Andrew[; GRO. ]
Sent: 28 August 2014 18:25
To: Belinda Crowe; Parsons, Andrew
Cc: Angela Van-Den-Bogerd; Rod Ismay
Subject: Re: SS Doc - Rod's feedback
Belinda,
Thank you. I will review and call Rod tomorrow.
Best regards
Andy
Andrew Pheasant
Bond Dickinson LLP
From: Belinda Crowe
Sent: Thursday, August 28, 2014 06:23 PM
To: Pheasant, Andrew; Parsons, Andrew
Cc: Angela Van-Den-Bogerd
Belinda Crowe <{___
Subject: FW: SS Doc - Rod's feedback
For information — Rod Ismay’s comments on the doc.
As you will see below, Rod is happy to speak and is still awaiting some answers on outstanding questions.
Best wishes
Belinda
Belinda Crowe
148 Old Street, LONDON, EC1V 9HQ
From: Rod Ismay
Sent: 28 August 2014 18:00
To: Belinda Crowe
Subject: SS Doc - Rod's feedback
Hi Belinda,
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Mark ups attached and a list of comments. Probably best if you read and then call me. I am around all of tomorrow.
If I don’t answer my phone immediately it will because tomorrow is the last day of the Finance Roadmap Programme
before new systems go live. So we have a lot happening up here just now.
I also need to ask some questions in my team tomorrow to try to close down some o/s points.
Thanks, Rod
Rod Ismay I Head of Finance Service Centre
2"™ Floor West Block, No / West Bars, Chesterfield, S49 1PF
Mobile ¢ i
‘Os' ice Finance — 2
Best Finance Team 2014 Best Annual Report & Accounts.
BusinessFinance .
Awards 20 /
Jen SS IR I ISI H IID IIO IODIDE EDISTO IOI IIIA IIE
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