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Message
From: Avene O'Farrell [/O=MMS/OU=EXCHANGE ADMINISTRATIVE GROUP
(FYDIBOHF 23SPDLT)/CN=RECIPIENTS/CN=AVENE O'FARRE653B79D2-A12E-41D4-9FOF-54003889467557D]
Sent: 20/03/2015 15:27:33
To: “J; Angela Van-Den-Bogerd
Subject:
Hi
Can you please forward to the appropriate person pls to deal with.
Thanks
Avene
Avene O’ Farrell
Executive Assistant
to the Chief Executive, Paula Vennells
& Finsbury Dials
20 Finsbury Street
London, EC2Y 94Q
From: Tim McCormack [f
Sent: 20 March 2015 15
To: amyasmorse:
Cc: peterbrooke!
Soren.schonberg;
Subject: Post Office
} Paula Vennells; Moya Greene; baileyai_
} angus.grant._.
nnual Accounts Query
Investigation Required Into Post Office Ltd Annual Accounts
Dear Sir Amyas
I write to you as a concerned tax payer who, over the last few years, has taken a
considerable interest into the financial affairs of Post Office Ltd, not least because I was
at one point a serving subpostmaster.
I would ask that your department considers investigating the Annual Accounts of Post
Office Ltd going back as many years as is necessary based on the points below.
I have copied this email to interested parties, including the CEOs of Post Office Ltd,
Royal Mail Group, Paypoint as well as the current chair of the BIS Select Committee and
HMRC.
1. Financial Losses
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I have tried in the past to explain to the CEO of POL, Ms Vennells, the concept of what
constitutes a financial loss and what does not. As far as I can tell she has not quite
grasped this nor how it manifests itself within POL's accounts. As a result it is my
opinion that POL overstate their losses significantly.
In my correspondence with Ms Vennells I made use of a simple example concerning
postage labels and encouraged her to think laterally as to how a similar set of
circumstances might occur in different areas of her organisation. However I don't think
she realised I wasn't talking about postage labels, rather something more serious in
terms of value.
For example, recently it was confirmed that POL write off several million pounds per
annum in counter losses at Crown Offices - the ones they manage directly. This is an
area where I believe an investigation will find that, on a transactional basis, only a small
portion of the transactional value relating to the actual cost incurred by POL could and
should be written off as a loss. Ms Vennells and her team seem oblivious to this.
While I believe a thorough investigation will bring to light many more examples not
related to Crown Offices specifically, it is still worthy of note to refer to statistics
released by POL on similar losses incurred by Subpostmasters. These statistics should
surely follow through and be comparable to Crown Office staff and without going in to
detail there is a surprising difference between daily cash balances declared as being
under as compared to the number being declared over.
2. Financial Gains
POL undertake financial transactions on behalf of a multitude of their clients including
various government departments. I am given to understand that the recent Second
Sight investigation raised concerns about the audit trail of transactions that have failed
for one reason or another after payment has been taken at the counter. This in turn
leads to monies being allocated to suspense accounts that at some stage must be
transferred to P&L accounts. I believe that the allocation of these ‘unclaimed’ funds
deserves a thorough investigation by an independent team to ensure that POL profits
are not overstated.
3. Possible Misuse of Grant Funding by POL
Over the last few years, POL has received an annual grant (now totalling £1.34b) from
the government to fund both SGEI and Network Transfornation. This amount was made
available to POL after being authorised by the EU State Subsidy
Commission. Specifically excluded from this authorised grant was the provision of a
loan from BIS to POL for working capital requirements. The EU State Subsidy
Commission noted that this loan was to be provided on market related commercial
terms. However during the course of the last few years POL has repaid that loan (a
significant amount for a loss making company). _I believe that the only source of
funding that could have been used to do this would have been the unused portion of the
grant provided by the government for SGEI and NT use only. FOI requests to POL
about this matter have been raised and answered obliquely which in itself gives cause
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for concern. It could and perhaps should be argued by POL's competitors, including
Paypoint, that the use of these funds represents an unfair advantage to POL.
This matter needs to be investigated and a report provided to the EU State Subsidy
Commission.
4. Providing the National Federation of Subpostmasters with Funding.
Without funding from POL the NFSP would be making a significant loss. There is great
concern within the Subpostmaster community about the ethical standards relating to
these transactions. Notwithstanding this, there is concern also about how a particular
sum of money was made available to the NFSP (£500k) in December of 2013. While
perhaps of no concern to POL there is some evidence to suggest that this money was
used by the NFSP not in the way it was intended. I have further information regarding
this and would be happy to share it with you in due course.
I would however ask for an investigation in to any future funding of the NFSP by POL
and in particular the financial control POL exert over an organisation set up to serve
subpostmasters and negotiate the best deal they can from POL on their behalf.
As an addendum for HMRC - I note that POL continue to deduct NFSP membership
contributions from their subpostmaster payments despite having been advised that
these contributions should include a portion of VAT.
5. Contingent Liabilities
I understand from my contacts that Ms Vennells was advised nearly at the outset of the
Second Sight investigation into past activities relating to criminal proceedings against
former subpostmasters that the likely outcome of many of these case investigations was
that the subpostmaster involved would be exonerated. Thus giving rise to a potential
liability of many millions of pounds. It was therefore disconcerting to see no mention of
any possible risk/contingent liability in this regard in the annual and/or interim accounts.
I would like to know whether this was deliberate or a mere oversight and that a suitable
figure and risk assessment be stated in the next set of POL's accounts.
Finally, it is not my intention in the above to make any accusation of impropriety, nor to
direct any character assessment towards any individual or organisation mentioned but
any subsequent investigation may find otherwise.
Yours sincerely
Tim McCormack
6 Market Square
Duns
TD11 3DB
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