POL00407493
POL00407493
From: Parsons, Andrew[/O=BOND PEARCE/OU=FIRST ADMINISTRATIVE
GROUP/CN=RECIPIENTS/CN=AP6]
Sent: Fri 28/06/2013 3:45:05 PM (UTC)
To: Rodric Williams.
Ce: Pheasant, Andrew:
Gavi
“3 Matthews,
Subject: RE: Horizon - Suspense Account Bug
Rodric
Re-drafted briefing section below.
I've just included a short description of the bug in the briefing. However, for your information, a fuller description is set
out below. I've discussed this with Andy Winn.
I've also got the details from Andy of all the SPMRs that need to receive 14 Bug letters.
Full description.
lf a SPMR declares on Horizon that there is a discrepancy between the amount of cash/stock in the branch
and the amount of cash/stock recorded on Horizon (say following an ad hoc cash/stock count), the
discrepancies are removed from the branch's live Horizon records, so that the branch accounts will reflect
the cash/stock actually in the branch at that point. However, the loss or gain in cash/stock is stored as a
temporary accounting record in a separate part of Horizon called the "Discrepancy Account".
At the end of each trading period, the figures in the Discrepancy Account must be cleared before the
branch can move on to trade during the next trading period (called "rolling over"). To do this SPMRs
transfers the net value of all discrepancies recorded in Discrepancy Account during that trading period into
a "Suspense Account". The SPMR can then settle any loss or gain in the Suspense Account by:
« "Making Good" the discrepancy in branch. If there is a gain, the SPMR is permitted to remove the
excess cash from the branch directly. If there is a loss, the SPMR may put extra cash into the
branch.
e "Settle Centrally". The SPMR agrees to pay the value of any loss directly to POL at a later date
(or if they dispute the discrepancy, they can raise a dispute with POL at this stage).
After settling any loss or gain, the Suspense Account resets to zero and the branch rolls over.
The 14 Bug caused a small number of entries in the Suspense Accounts of 14 branches in 2010 to be
erroneously reproduced in those branches' Suspense Accounts for 2011 and 2012. Some of the entries
were losses and some were gains. For example, at the Dundas branch, the SPMR put a £5.84 gain into
Suspense in Trading Period 9 of 2010. This £5.84 gain then erroneously re-appeared in the branch's
Suspense Account in Trading Period 9 of 2011 and 2012.
This error forced SPMRs to re-settle the incorrect entries in order to clear their Suspense Accounts in 2011
and 2012 despite those entries already having been settled in 2010. In effect, some branches accidentally
benefited from the same gain three times and some branches suffered the same loss three times.
The “14 Bug”:
i. affected 14 branches (4 Crowns, 10 subpostmasters)
POL00407493
POL00407493
ii. concerns an error in Horizon that caused historic accounting entries in particular branches in FY 2010/11
to be erroneously reproduced in those branches’ accounts in FY2011/12 and 2012/13. This caused some
branches to benefit from additional gains whilst other branches saw additional losses. The gains and
losses ranged from a penny up to £9,799.88.
iii. the effects of the 14 Bug on branch accounting were notified to POL by a few SPMRs in around January
2012. However, POL did not identify Horizon as the root cause until January 2013.
iv. issue discovered because those 2 SPMRs who suffered significant discrepancies raised the matter with
POL in early 2012. However, the error in the Suspense Accounts was highly unusual, occurred irregularly
and only materially affected a very small number of branches. As such, although POL did investigate
these issues immediately, it took over 12 months for POL to realise that this was an error in Horizon rather
than an error by an SPMR or by POL. In the interim period, POL did suspend any attempts to recover
known losses from affected SPMRs. However, some of the losses were not identified by the SPMRs or
POL at the time (principally because they were too small to raise any concern) and were therefore settled
by SPMRs in the normal course of managing their branches.
Kind regards
Andy
Andrew Parsons
Senior Associate
for and on behalf of Bond Dickinson LLP
Follow Bond Dickinson:
www.bonddickinson.com
From: Rodric Williams [mail
Sent: 28 June 2013 12:17
To: Parsons, Andrew
Subject: Horizon - Suspense Account Bug
Andy — here’s the extract from the Briefing Paper that we need to fill in describing the bug in the suspense accounts.
I'd be grateful if you could fill this in for us with Andy Winn’s help.
Kind regards, Rodric
POL00407493
POL00407493
a. The “14 Bug”:
i. affected 14 branches (4 Crowns, 10 subpostmasters)
ii. concerns [EXPLAIN]
iii. issue discovered on [DATE].
iv. issue discovered because [TO COMPLETE]
v. subpostmasters notified on [DATE].
vi. relates to transactions dating from [X] to [Y]
Rodric Williams I Litigation Lawyer
148 Old Street, LONDON, EC1V 9HQ
D ®
-
)
Post Office stories
@postofficenews
©
This email and any attachments are confidential and intended for the addressee only. If you are not the named
recipient, you must not use, disclose, reproduce, copy or distribute the contents of this communication. If you have
received this in error, please contact the sender by reply email and then delete this email from your system. Any views
or opinions expressed within this email are solely those of the sender, unless otherwise specifically stated.
POST OFFICE LIMITED is registered in England and Wales no 2154540. Registered Office: 148 OLD STREET,
LONDON EC1V 9HQ.
Je a ID IDI I III IIS IO IID IO ISIS III IO III IIS IIS II IOI SII.