WITN04630200 Rod Ismay - Second Witness Statement

Evidence on official site

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Witness Name: Roderick Mark Ismay
Statement No: WITN04630200

Dated : 10 April 2024

POST OFFICE HORIZON IT INQUIRY

SECOND WITNESS STATEMENT OF RODERICK MARK ISMAY

I, Roderick Mark Ismay will say as follows:

Introduction

1. I understand that the purpose of this witness statement is to set out

matters of fact of which I have personal knowledge.

2. This witness statement was drafted in my own words with my solicitor,
DAC Beachcroft’s assistance during a process including the preparation of
successive drafts after communications between me and those advisers in

writing, by telephone and by video conference.

3. The facts within this witness statement are either within my own
knowledge, or derive from the records provided by the Post Office Horizon
IT Inquiry. However, as it relates to events that occurred in some cases
over twenty years ago, there are several areas that I do not recall. Where

that is the case, I have said so.

4. This statement responds to the request for a written witness statement
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pursuant to Rule 9 of the Inquiry Rules 2006 reference WITNO463R9
(1)/LD/20240226 dated 26 February 2024. My witness statement responds
to the questions asked in Annex 1 regarding the Post Office Horizon

computer project.
Civil Proceedings against Ms Wolstenholme (Cleveleys)
5. I have considered the following documents:
i. I POLO0142503 (email to Donna Parker and others on 26 July 2004);

ii POL00142504 (advice on evidence and quantum by Mr Brochwicz-

Lewkinski dated 26 July 2004); and

ii. POL00158510 and POL00158512 (emails from Carol King to me

dated 26 July 2004)

iv. POL00142505 (email from Tony Marsh to me and Tony Utting on

27 July 2004); and

v. _ WITN00210101 (report of Jason Coyne in POL v. Wolstenholme).

6. I do not recall having direct involvement or giving instructions in the case
of POL v Wolstenholme. It was not my role to instruct POL legal team or
solicitors — my recollection is that there was a process or a policy for the
management of cases and liaison with internal (POL Legal team) and
external solicitors, and this is what appears to have happened in the most
recent email in POL00142505. I believe that there was a role called a

Prosecution Authority who worked closely with the Head of Criminal Law

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and with internal legal teams, who would in turn have managed the

relationship with external solicitors.

My recollection, twenty years from the date of the documents shared in the
Inquiry bundle, is that there was a press cutting service within POL which
would have included all sorts of network and product news but which
would also have included articles commenting on Horizon. My recollection
is that I asked members of the IT Directorate what their view was about
such articles and that Cleveleys came up in that conversation, with the IT
Directorate firmly of a view that the criticism was unfounded. I have read
POL00142504 and WITN00210101 and I see that they are the opinion of
the IT expert acting for Ms Wolstenholme on this case and the associated
report from counsel and that those documents do raise doubt about
Horizon. My recollection, however, is that the Post Office Head of IT, Dave
Smith, did not agree with those opinions and that he disagreed with the
validity of the approach adopted by the IT expert to reach their opinion.
Rightly or wrongly, I trusted that internal opinion, from someone I
understood to be an expert on Horizon. In POL00142503 I escalated
Counsel’s opinion to the Chief Operating Officer, David Miller, via his PA.
This was in the absence of the Finance Director. I expect that both would
have had more knowledge of the early years of Horizon to take an
additional perspective on Counsel’s opinion. Later on, in the report I
compiled in 2010, POL00088935, I did mention Cleveleys and that “..the
defence produced a report which showed how Horizon ‘could’ have
caused an error and POL did not have the audit transaction logs to refute

the claim.” In hindsight I think that the report I compiled could have been

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more complete if it had expanded on Counsel's opinion and the IT expert's
opinion from 2004. However, the recollection in the 2010 report suggests
that POL saw the lack of available transaction logs as the issue, and had
subsequently taken action on that. Consequently, and perhaps wrongly,
those external opinions had been rejected in 2004 and were probably a
fading memory by 2010. For my own part, I expect that the Head of IT’s
rejection of them had probably diluted them in the wide range of topics in
my head across all aspects of my job. I think that the previous Head of IT
had also retired before 2010 and so the “corporate memory” of events in
2004 would have been further diluted. I also stated in my 2010 report that
“Systems issues have also arisen but again POL has been able to explain
them and rectify them.” I said that in recognition that some technical issues
had arisen with Horizon however due to the comfort that was given to me
by the Head of IT, who would have had a direct point of contact at Fujitsu
with respect to Horizon, during the course of compiling this report, I was
assured that the issues were resolvable. This position within POL was
further amplified by the earlier feedback from the independent IT
consultancy Gartner who had described the Horizon Online architecture as

first rate.

I do not know what more detailed rationale the Head of IT had, although it
may have included the transaction logs, but I think the Gartner report on
Horizon, which I referred to in the paper I compiled in 2010, may have first
been mentioned to me, by him, around this time. I think, also, that I would
have felt some reassurance regarding POL IT’s stance from forums I

attended with the NFSP (people who were users of the system and

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representatives of users) wherein my recollection is of a focus on branch
conformance and training, not on doubt about Horizon. Please also see my
comments in 13 below. I had also been asked to focus on Financial
Services regulatory compliance and branch conformance by the Finance
Director when I joined a few months earlier and I don’t recall a sense from
Director level, during my tenure, that they doubted Horizon, despite them
probably having been close to it through the procurement and migration,

as well as some being party to the correspondence about this case.

I do not know whether it was my question above which led me to become
involved in correspondence about this case or whether it may have arisen
as a result of the Branch Audit Team reporting to me in 2004, however, I
recognise that in POL00142503 I had collated certain information about
this case to escalate to the Chief Operating Officer (David Miller, via his
PA) in the absence of the Finance Director. I do not recall briefing others
on the POL Board nor do I recall meetings with David Miller, Tony Marsh
or Mandy Talbot, however, it is clear from the documents provided to me
that I did have correspondence with them. I am sorry that I cannot recall
whether this was accompanied by meetings. It is, however, the case that I
was in my first year of employment with POL and I did have many
introductory meetings with staff and that did include all directors at the

time.

POL00142503 includes correspondence which explains that others had
already considered and approved settlement payments to Ms

Wolstenholme.

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11.

12.

13.

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I am asked by the Inquiry whether I read the advice of Mr Brochwicz-
Lewinski dated 26 July 2004 and Mr Coyne’s report. My immediate
reaction was that I could not recall either name, nor whether I had even
received either of the reports, but based on the emails provided to me I
can see that I had at least received the first of those, because I then
forwarded it. In the same email that I forward Counsel’s Opinion, I ask
whether Legal had a copy of the IT expert's opinion, which suggests to me
that I did not have a copy of it, but probably wanted the recipients of the
email to be clear about who had it if they needed it. I do not know whether
I read either document and indeed I am unclear whether in any other
correspondence I actually received the latter. Whether or not I did, it is my
recollection that the IT Team had referred to the IT expert’s opinion and

had indicated that they disagreed with it, as I explained above.

My understanding was that there had been a large team of experts
involved in developing the Horizon system, that it had undergone
extensive testing and that the independent consultancy, Gartner, had
reported positively on the deployment of the system. I do not believe that I
took any further action in relation to the concerns raised in Mr Coyne’s
report nor was I asked to. My recollection is that the organisational
priorities agreed for me at the time focussed on Financial Services
regulatory compliance, network cash reduction, branch conformance and
team reorganisations to support company-wide headcount reduction
programmes. I believe that if the Horizon system were a priority at the

time, then it would have been a responsibility for the IT Directorate.

I joined POL with an enthusiasm for the work that Post Office and

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Subpostmasters did and with a respect for their roles in the community. I
think I would, therefore, have reflected more than once on the sadness of
situations involving legal action and on potential outcomes which have
been demonstrated so powerfully in the awful experiences narrated by
Subpostmasters in the Human Impact phase of this Inquiry. However,
whilst prosecution was not my decision, I think I would have rationalised it

for reasons including the following:

13.1 POL IT team’s confidence in the integrity of Horizon and their
rejection of criticism of Horizon posed in defence cases and in the

press

13.2 POL Network Team and NFSP confidence in Horizon, including as

users of the system,

13.3. The conclusion in 2004 of an earlier case at Sevenoaks post office,
for which my recollection is that it was a Crown / Directly Managed
Branch, not a sub-post office, wherein the Assistant Manager
admitted to theft of more than half a million pounds to support his

gambling habits

13.4 Feedback from branch auditors giving similar examples where they
said colleagues running branches had confessed at audit to using
post office cash for such purposes as paying off debts and using it
to fund associated loss-making retail operations that they also ran.
Such situations sometimes also involved branch requests for one or
more cash deliveries to the branch, via Post Office cash delivery

vans, where the value and frequency of the deliveries was

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disproportionate to the actual cash needs of the location. This topic
specifically contributed to work to improve the analysis of gross
cash turnover at a branch level (cash inflows and cash outflows) in
order to support better decision making centrally about cash needs
and better assurance to branches about the actual amount and
frequency of cash deliveries that they needed based on their

customer transactional activity

13.5 Seemingly compelling data about unusual activity in branches and
apparent discrepancies in, or unexplained absence of, the expected
content in pouches remitted out of branches. These themes

included the following:

13.6 Cheques on hand — high values despatched for processing

significantly late or not at all

13.7. Frequent and high value remittance reversal activity in branches at

cash account period ends

13.8 Extensive cash to cheque reversal and re-reversal

13.9 Empty pouches or glued up pouches for returned saving stamps

13.10 Benefit transaction fraud

13.11 Manipulation of bureau de change exchange rates at a time when

manual rates tables were used, and before central automation

13.12 “Theft and flight’ cases of high value purported cash deposits into

online banking accounts in branch followed by attempted withdrawal

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14.

15

16.

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at a bank before the alleged deposit could be investigated — such
matters were monitored by a member of the Investigations

Commercial Security Team in liaison with banks

13.13 Situations of multiple debit or credit cards being run through branch

terminals late at night in suspected testing of counterfeit cards

I accept that the assertions above and examples of proven instances in
certain branches are not proof that it arises elsewhere, however, I am
sharing these perspectives to help the Inquiry understand the general
context that may have influenced decision making in departments across

the organisation during the period of these actions

The factors above would have contributed to a general belief, within POL’s
central teams, that some level of inappropriate activity was being
conducted in branches, whether directly managed or franchised. My
recollection is that in the routine course of my involvement in work on
branch conformance, I met with NFSP, with some subpostmasters and
with some representatives of “multiple partners” (retailers who ran many
post offices under a franchise) and that there were times when discussing
general conformance and cash holdings where those third parties alluded
to their own perception of the risk or even examples, that were known to

them, of inappropriate activity.

My recollection is that criminal prosecution was only followed where there
was believed to be sufficient evidence regarding a specific individual and I
believe that would have been a decision between the Prosecution

Authority and POL Legal. My recollection is that there may have been

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other situations wherein a civil action was taken, which I think was an
action related to the contract. The issue of responsibility was then

influenced by factors including the following:

16.1 The subpostmaster contract

16.2 Evidence of password sharing causing doubt about who may have
performed a particular action, but with it nevertheless being the

responsibility of the Subpostmaster under the contract

16.3 Situations of one subpostmaster owning many (possibly dozens) of
branches and choosing to fully delegate the running of the branches
to other staff whom they appointed. In these situations, and in cases
where there may have been password sharing, then my recollection
is that auditors or investigators would seek to find out who had done
what, but if that proved not to be possible, then again the
subpostmaster would be considered to be responsible under the

contract

16.4 This had the potential to mean that a trusted employee, who might
even be a trusted family member, might have carried out a
suspicious transaction or taken cash, but it might just not be
possible, for understandable reasons of friendship, for the

subpostmaster to believe that this could have been possible

17. Also, I believe that at some point in time, during this whole sad chain of
events, there were comments that allegations about Horizon were

generally raised late into proceedings and often as a retraction of previous

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confessions about what had happened. I think this was an observation
from POL Legal or from Branch Auditors or Investigators involved with
cases. I acknowledge that the basis for this perception may now be

challenged in hindsight by findings from Phase 4 of this Inquiry

18. In hindsight, I would now challenge my perception at the time, but in my
narrative above I seek to explain the context that I and others were

operating in at the time.

Response to the Ismay Report

19. I confirm I have read POL00296291 which states that I received praise
from the Chair for my report. My recollection is that this happened at a time
when either POL had just moved from its Old Street offices to new
premises near Moorgate or it was at a time when there had been several
new joiners to the organisation. I think I was being given a short tour,
either to see the new offices or to meet new people and in the course of
this I was introduced to the Chair. My recollection is that it was a very brief
introduction, and the only occasion I recall on which I had direct
conversation with that Chair. My recollection is that the comment was
along the lines of the following "Ah pleased to meet you, so you will be Mr

Ismay of the Ismay Report, a very good document".

20. As regards the comment “..and to continually rebut claims..”, my
recollection is that I was rarely included in correspondence about cases
going to court, whereas I believe I was regularly approached by the
Freedom of Information Act Team and the Communications Team for input

to assist them in their responses to FOI requests and letters of complaint. I

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21

22.

23.

24.

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expect that this phrase would, therefore, have been used in respect of my

input to assist the response to complaints and other correspondence.

POL00296291, my PDR, is a quite tightly packed document spanning
three pages and has nothing more in it about that feedback, whereas if it
had been a major part of my work I expect that I would have wanted to
elaborate more on it. The rest of the document demonstrates that my
objectives and the thrust of my work had clearly been about other topics
and I expect that I was simply keen to quote what seemed like positive

feedback from the Chair for my summarisation in the report.

Actual rebuttals of claims in legal cases would have depended on
evidence submitted in those cases, not on the content of an internal report.
I expect that rebuttal would also have been a decision for POL Legal or the
Prosecution Authority based on their assessment of the evidence as it
related to the specific branch involved in the specific case. Such evidence
could perhaps have been actual examples related to the themes that I
summarised from discussions with others in my report, but those examples

would have come from relevant areas within POL.

The origin of the report had not been to rebut claims — it had been to assist
a new Managing Director to develop an understanding of an environment
where challenges were being made about Horizon, but where there was

no ready document available which pulled together reasons for assurance.

POL00296291 also includes a note by me which starts with “Mute button /
shut up”. I think I would have written this in the context of development

points for the year ahead based on feedback to me from other people in

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the preceding year. The nature of the team that I led, was that it involved
managing a wide variety of complex processes and such processes were
very often impacted by wider business change projects such as new
customer products, new channels and new systems. I was therefore often
working in the detail, and I felt I had to work in the detail, but I was
regularly challenged by line managers and peers to be more strategic and
not get meetings bogged down in detail. The fact was, in my opinion, that I
did need a grasp of the detail but I had to strike a balance in business
meetings where POL had many massive strategic priorities (eg. Funding
and separation from Royal Mail) such that I could be concise and effective
when giving updates for my area. I, myself, had annual objectives and
evolving priorities linked to these other areas — in particular the separation
of POL finance processes from group wide processes, FSC input and
readiness for IT system upgrades, Back Office Efficiency Programme,
tenders and supplier relations around cheques and card processing, team
restructuring for headcount reduction and team support for branch cover

during strike action.

This report that I compiled was a summary of the existing understanding of
teams across the organisation. I do not, therefore, believe that the report
itself would have been something that POL used or relied on in its
response or in devising its strategy to the response, but rather the
individual elements of potential assurance noted within it, as
communicated by functional leaders across the organisation, would have
been matters that would already have caused POL to have belief in

Horizon, and would continue to do so.

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26. The report has an addressee list at the top of it and my recollection is that
my conversations during the compilation of the report would have been
with those individuals or with members of their teams that they asked me
to speak to. As regards specific members of POL Board, I do not recall
which “directors” (members of the POL Executive Team) were also
members of the POL Board, however, the ET members that I believe I
spoke with in compiling the report were Mike Young and Mike Moores. The
report was then primarily addressed to Dave Smith but, as he was the one
seeking the understanding from across the business (and was relatively
new to the company), I don’t recall that I had much conversation with him
about it aside from being asked to compile the report. I believe that the
request for me to compile the report arose due to a lack of clarity of
Horizon sponsors within POL, but that from a recent visit to Chesterfield it

was clear that I and my team had a good knowledge of Branch accounting.

Shoosmiths litigation

27. I have reviewed POL00046944, POL00294879 and POL00027523 and I

think I would have been involved in three ways in this matter.

28. Firstly, in light of the then recent document referred to as The Ismay
Report, I think that upon the receiving the letter of claim, POL Legal Team
would have approached me to assist in suggesting what people or teams

would need to be involved in responding to the topics within the letter.

29. Secondly, I would most likely have been involved as the Head of Product &
Branch Accounting wherein I or members of my team would have been

best able to answer specific questions about accounting processes.

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30.

31.

32.

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Thirdly, I think I was replaying to the Legal Team what they would have
told me in the first place — claims would not have been addressed to me,
they would have been sent to Legal or Head Office as indeed
POL00046944 was. I think it was probably a situation of different members
of the Legal Team knowing about different cases and a range of people in
other teams providing input to different cases, but no one having a
summary of it all. I think I then volunteered to trawl through information to
summarise it, in the absence of anyone else volunteering to. I think this is
symptomatic of other strands being considered in this Inquiry and perhaps
a reflection of the high levels of staff turnover in some teams — I think I
might have volunteered or been approached to collate things, and then
become a magnet for that, when someone else should have been
responsible and should have done it, or indeed it should have been
information readily to hand in another team. This probably also led to me
gathering addressees’ thoughts together in the proposal I made in

POL00294879.

My recollection is that the POL Legal Team would have then led on the
response to the letter of claim. I do not recall that I or others were assigned
specific roles or responsibilities, other than that actions may have been
agreed such as fact finding about processes or records which may have
been relevant actions for me. I do not recall that this was a situation of an
“appointment” but rather that in any business situation where you have to
gather information, you get the people involved who represent the relevant

teams or processes for gathering such information.

I do not consider that I can describe a strategy for POL’s response. Rather

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I would say that the letter of claim set out a situation and I believe the POL
Legal Team would have determined how that would be responded to and,

in that sense, would have been responsible for strategy.

33. My recollection is that POL Legal Team or the third party lawyers
supporting POL advised that correspondence should be headed in a
certain way to retain legal professional privilege. My understanding was
that this was a common principle in the legal profession for solicitors and
their clients, which I presume would be relevant for all legal cases, and so
would not be unusual to be used in this situation. At some point in time (I
do not recall whether it was before or after this situation) POL issued
guidance on document categorisation (eg. Confidential etc) and I believe
that this also would be common practice across organisations. I do not
believe that I was aware, if at all, of POL seeking to prevent disclosure of
documents but rather that it had been felt necessary, corporately, to
reinforce to people the importance of document categorisation in a solicitor

/ client context.

Response to Private Eye Inquiry

34. I have considered POL00294843 and do not recall this specific inquiry, but
I think that I was asked to provide input from time to time on enquiries that
may have come in to POL. Such enquiries might have been first received
as Freedom of Information Act requests or letters to the Managing Director
and I think were forwarded to me from time to time by the related teams in
London. My recollection is that those enquiries were from individuals not

journalists, however, this document shows that there were journalistic

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enquiries too. There were obviously also situations of articles in the press
which were not a specific question addressed to POL but which were a
general comment in the media which may or may not have merited a

response.

35. I do recall at some point that I queried with the PR Team whether there
was merit in attempting to respond with a summary of POL’s reasons for
assurance such as training, IT model office and helplines etc but I believe
the response was that it would be very hard to provide a simple and
concise summary of such matters and that it could rather be interpreted as
a “tit for tat” which would just exacerbate the situation. This is potentially
the type of feedback which led to the comment I made in POLO0296291
about “mute button / shut up” and which is commented on above in

paragraph 24 of this statement.

Appointment of Second Sight and its investigation

36. I confirm that I have reviewed the documents the Inquiry has asked me to
consider, namely; POL00184724, POL00184725, POL00184726,
POL00184727, POLO0097548, POL00185683, POL00098035,

POL00130162, POL00130163 and POL00130164.

37 I do not believe that I ever met with the JFSA, however, my recollection is
that some other colleagues had met with them and that Second Sight had
either been proposed by JFSA or had in some way been identified as a
firm to consider and that it had then been mutually agreed between POL
and JFSA that they would be appointed. I apologise if I am wrong in that,

but this is my recollection. Having now read Second Sight’s Interim Report,

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38.

39.

40.

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POL00090567, I see that Second Sight themselves set out a short
summary of the origin of their appointment and the remit agreed for their
work at the top of the first page of their Interim Report. In their Part 2
Report, POL00029849, Second Sight comment at 1.2 that they were
appointed by Post Office at the request of Members of Parliament. I was
not involved in commissioning Second Sight or in the preparation of their
mandate. I believe, their primary point of contact would have been the

Legal Team or Angela Van Den Bogerd.

I did not meet with any MPs myself, but I was involved in some information
gathering ahead of a meeting with MPs in May 2010. A briefing paper was
compiled for that meeting (POL00002082) as shared in Bundle R10 last
year. I would have been involved in explaining some of the processes

narrated in that briefing paper.

I do not recall that I was involved in the appointment and instruction of
Second Sight. I did, however, attend at least one meeting with Second
Sight and I did correspond with them in response to questions that they
asked. My recollection of a specific meeting is of one regarding the

Suspense Account. This is expanded on later in this statement.

My recollection had been that Second Sight were appointed to look into
specific cases put forward by JFSA. My recollection from the one meeting
that I recall with them was that they felt some cases merited further
investigation by them but that they or JFSA felt some other cases did not
have validity. I believe that these cases are what is referred to as “spot

reviews”. Having been able to read POLO0090567 I have then been

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41.

42.

43.

44.

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reminded of the communication that was sent out to subpostmasters and
counter colleagues which invited them to submit issues confidentially to
JFSA. That same document explained that the objectives of Second
Sight’s work were somewhat broader in advising on whether there were
any systemic issues or concerns (page 1) but that the approach adopted to

develop such advice would be based on spot reviews (pages 2-3).

I do not recall who at POL was responsible for deciding the ambit of

Second Sight’s investigation and the extent of its access to documentation

My recollection is that large amounts of information were provided to
Second Sight and that large amounts of time were made available for
discussion with them. The lengthy correspondence that I was party to with

them, regarding the suspense account, is an example of that.

My recollection is that Second Sight’s initial scope was about spot reviews
and my feeling from my recollections is that sufficient information was
being provided by POL. The nature of the two Second Sight reports that
the Inquiry has shared with me suggests that either the agreed scope
evolved or there was a divergence of opinion about what the scope was. In
that regard I do not know whether the extent of provision of information

was sufficient.

My recollection regarding spot reviews is that there would have been
specific questions about the transactional history in a branch and perhaps
about specific products being transacted. I believe that I would have been
providing or gathering the response from a transactional and process

sense about such matters. My recollection is that rather than it being a

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“strategy” POL would simply have been seeking to fully answer the
questions raised during the course of a spot review. My recollection is also
that, although I made a proposal for process in POL00184724, there was a
point at which it was agreed that spot reviews would be followed up direct
by colleagues in London with members of my team, rather than through
me. This was potentially due to a broader prioritisation wherein I needed to
be focussed on the Finance Roadmap project and other follow-ons to the

separation of POL processes arising from Royal Mail privatisation.

45. I cannot recall the Second Sight Weekly Calls, however, given that I
believe POL was responding to the spot reviews I would expect that the
weekly calls were a status check on the progress of such responses. In
that regard, as explained above, I or my team may have been the people

best placed to respond to specific topics in the spot reviews.

Second Sight’s interim report and the Mediation Scheme
46. I confirm that I have considered
i. _POL00022598 (“the Helen Rose report”);
ii. I POL00090567 (Second Sight's Interim Report);
iii. I POLO0145290 (email to dated 9 July 2013);

iv. POL00191780 (email to Gayle Peacock and Jeff Burke on 11 July

2013),

v. POL00083932 (record of the Horizon regular call on 19 July 2013);

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vi.

vii.

viii.

Xi.

xii.

xiii.

xiv.

Xv.

xvi

xvii.

xviii.

xix.

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POL00139731 (record of Horizon regular call on 24 July 2013);

POL00139732 (record of Horizon regular call on 31 July 2013);

POL00201858 (email to Angela van den Bogerd on 18 March 2014)

and POL00201859 (attachment);

POL00205842 (email from Charles Colquhoun to you on 19 June

2014);

POL00004439 (Briefing Report Part 1 dated 25 July 2014);

POL00206939 (email from Belinda Crowe to Chirs Aujard on 29

July 2014) and POL00206940;

POL00207085 (email from Belinda Crowe on 1 August 2014);

POL00021762 (email from Belinda Crowe on 6 August 2014);

POL00208183 and POL00021808 (emails to Andrew Pheasant on

29 August 2014);

POL00208299 (Andrew Pheasant’s email on 2 September 2014);

POL00021763 (email from Andrew Pheasant on 3 September

2014);

POL00021849 (email to Andrew Pheasant on 9 September 2014);

POL00210892 (email from Belinda Crowe on 15 October 2014) and

POL00210893 (attachment);

POL00218260 (email from Paul Loraine on 8 January 2015) and

POL00218261 (attachment);
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xx. POL00022296 (attendance note of meeting with Second Sight on 9

January 2015);

Xxi POL00218910 (email from Peter Goodman to Alisdair Cameron on

16 January 2015);

xxii. © POL00218920 (email from Chris Aujard on 16 January 2015);

xxiii. I POLO00025788 (email to Andrew Parsons on 26 January 2015) and

POL00025783 (attachment);

xxiv. I POL00150950 (email to Andrew Parsons on 28 January 2015) and

POL00150951 (attachment);

xxv. POL00218943 (email from Belinda Crowe to Andrew Parsons),
POL00218944, POL00218945, POL00218946 and POL00218947

(attachments);

xxvi. POL00312064 (email to Alisdair Cameron on 12 February 2015),

POL00312065 and POL0031 2066 (attachments);

xxvii. I POL00224476 (email from Mark Underwood to you on 13 March

2015);

xxviii. I. POL00151682 (email to Mark Underwood on 20 March 2015);

xxix. POL00225340 (email exchange between you, Alisdair Cameron

and others on 23 March 2015);

xxx. I POL00029849 (Second Sight Part 2 Report dated 9 April 2015);

Xxxi. POL00226357 (email exchange with Mark Underwood on 9/12 April

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2015); and

xxxii. I UKGI00000018 (POL’s response to Second Sight’s Part 2 report).

47. My recollection is that my involvement in POL’s response to Second
Sight’s reports was, as explained above, to provide or gather the response

to specific questions from a transactional and process sense.

48. Whilst I believe I responded to a variety of questions over a period of time,
I cannot recall whether they related to the Mediation Scheme as well as to

Second Sight’s questions.

49. I cannot recall what my views were at the time, on the conclusions reached
in the interim report. However, having read that report as part of preparing
this witness statement I think that my perception would have been that it
was written in a balanced manner, acknowledging all of the following —
firstly the fact that the subpostmaster experience was not just about
Horizon but also about other aspects of the environment around it such as
training and connectivity, secondly that the situations in the spot reviews
were not straightforward, thirdly that it was hard for POL to prove the
negative, but fourthly that this was the same situation that subpostmasters
may have found themselves in too. Aside from the work on Spot Reviews
and the work to explain the suspense account, I do not recall how actions
were taken forward from the report, but I would expect that this would have
been under the direction of those responsible for co-ordinating the Second

Sight work, which I believe was POL Legal or Angela Van Den Bogerd.

50. As regards the assertion that “there is often a focus on ‘asset recover

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solutions’ without first establishing the underlying root cause of the
problem” I agree that, in isolation, the explanation of the cases does sound
like that. However, in a wider context, I would say that significant effort was
already being put into, and continued to be put into, eliminating the scope
for errors and complexity in the first place. I would say that the priority
given to me regarding loss reduction in my time at POL was by way of
eliminating loss making products and making customer transactions and
end of day routines (such as cheque despatch) easier to transact. It was
not about ‘asset recovery’ as the priority — it was about prevention in the
first place and this spirit was reflected in articles that I initiated in POL’s
branch publications and in articles that I contributed to the NFSP
Subpostmaster magazine. The Back Office Efficiency Programme and
other central initiatives had a focus on ceasing certain problem products
(primarily Post Office Saving Stamps) and on providing an easier and
clearer data flow for “off-Horizon” services (products served through stand-
alone equipment), to enable branches to examine, challenge and accept
the transaction summaries via “Ping” (a topic that I addressed in my first
witness statement). “Off-Horizon” products meant products such as
Camelot and PayStation whereby batch summaries could be sent as
“Transaction Acknowledgements” (TA’s) to branches which the branch
could validate against local receipts before accepting the TA, rather than
the branch have to remember to do the weekly processes such as
Camelot cut-off. These central initiatives directly match to the issues
included in some of the spot reviews referred to in POLO0090567 as they

were already more widely recognised as complicated routines.

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51.

52.

53.

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With the passage of time my view remains that whilst, in isolation, the
conduct of the individual cases looked like a prioritisation of “asset
recover”, my experience of driving improvements through Back Office
Efficiency Programme (BOEP) is very much the opposite — initiatives such
as BOEP were focussed on preventing the scope for issues to arise in the

first place.

Regarding POL00145290 I think that the distinction being made through
the word “anomalies” versus “bugs” was an effort, made in good faith, to
pre-empt what one might expect the typical layman’s response to be to the
word bug. By that, I mean that these bullet points in this email were
responding to what were understood to be two matters that affected what
was believed to be a small number of offices and which arose due to an
unexpected and unlikely sequence of menu options being followed. This is
probably why I used the word anomaly. “Bug” on the other hand is a word
for an issue that I would suggest one would naturally expect to affect all
users in the routine course of operations — a matter which did not apply to
the two issues named in that email ie. Only a small and defined number of

offices experienced the two issues (the “anomalies”).

Further, in response to POL00145290, I did not say that the Interim Report
referred to anomalies. What the first bullet point of my email was meant to
convey, and which I feel it does convey, is that regardless of whether you
call them anomalies or bugs, the specific branches who experienced the
two named issues were not members of the population of branches

making up the 47 cases or the 4 cases.

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54.

55.

56.

57.

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The interim report by Second Sight, POL00090567 states on page 1 that
“the remit of the investigation was later defined as ‘to consider and to
advise on whether there are any systemic issues and/or concerns with the
Horizon system’...” I believe that the comment “we welcome the
conclusion of this interim report that there are no systemic issues with the
Horizon system” would have been made in the context of that remit stated
on page 1 and Second Sight’s preliminary conclusion at 8.2(a) which says
“We have so far found no evidence of system wide (systemic) problems

with the Horizon software.”

I cannot recall the Horizon regular call, however, as I explained earlier in
this statement, I would expect that weekly calls were a status check on the
progress of responses to the spot reviews. In that regard, as explained
above, I or my team may have been the people best placed to respond to

specific topics in the spot reviews.

As regards notes and/or minutes I have read POL00083932 including the
specific comments. I can’t recall anything to add to what already exists in
that document and which has been highlighted in the question to me. I do
not know what was discussed to lead to those notes being made, other
than what is stated within the document itself. The notes of my own input

to that meeting, included in POL00083932, do not touch on that topic.

I do not know what discussion, if any, there was of the Helen Rose report
on 31 July 2013. However, I presume that the Inquiry asks about 31 July
2013 in this section on the basis that there may have been a Horizon call

on that date. If so, then based on the comment on page 1 of

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58.

59.

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POL00083932 that “No minutes circulated, but we will be taking notes”
then the note taker for POL00083932 might have prepared a similar note

regarding whatever was discussed on 31 July 2013.

I do not believe that I was aware, during my tenure, of allegations that a
person within POL had made instructions to shred or otherwise destroy
notes of calls. In subsequent years, after leaving POL, I have, however,

seen comments in the press and on social media about shredding.

I cannot recall reading what has become known as the Helen Rose report
and I cannot recall, during my tenure at POL, hearing of a document with
that name. I apologise if this is not the case and if I have simply forgotten.
However, as a result of reading the bundle of papers shared with me to
assist in preparing this statement, I have now read that report. I would
imagine that at the time it was first prepared and shared it would have
simply been called a report on the specific spot review, or perhaps referred
to by the name of the specific post office if it were not sensitive to mention
the name of the office. I do, however, note that this report refers to a
transaction recovery situation and I do recall that I asked questions about
the transaction recovery process during my tenure at POL as “recovery”
did seem like a complex area. I don’t know if my question would have been
prompted by general experience or perhaps by this very report and the
response to spot reviews. My recollection is that detailed guidance had
been given about the process for branches to follow in a recovery situation
but my recollection is that I felt this could have been complex for a branch
to follow. I think this was both in terms of how to describe the

technologically complex recovery situation in straightforward intuitive terms

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60.

61.

62.

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and also how to enact such processes in what might be a stressful
situation as there could quite likely be a dis-satisfied customer and one or
more counter staff upset that they had not been able to deliver the service
they would wish for that customer. I think I sought to get simpler guidance
on recovery issued but I cannot recall whether that was, in the end,

appropriate or agreed or enacted.

Regarding the FactFile, POL00201858 shows that I felt several sections
needed rewording or expanding and that the owners (presumably meaning
the reviewers too) needed revisiting for some sections. Based on the dates
of the emails I expect that I received the draft on Thursday 13, reviewed it
on Friday 14" and sent back my summary comments first thing on Monday
17" but the document had already been shared in the meantime. I am
unclear whether POL00201859 is then the version showing exactly what I
proposed as edits or whether it includes any other people’s proposed

amendments to the same areas.

Regardless of whether it is or isn’t, my suggested additions would have
been based on my understanding at the time, and likely to have been
subsequently considered and reviewed by Angela Van Den Bogerd as per
POL00201858. This may have involved me checking with other people on
the Friday or in whatever time gap I was suddenly given to respond in light

of the urgency conveyed by the email in POL00201858.

The text at paragraph 33 is consistent with the understanding that I had at
the time of the report to the Managing Director in 2010 and consistent with

my continued understanding from the IT directorate at the time. I think I

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63.

64.

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would have felt that Transaction Corrections and Transaction
Acknowledgements needed referring to in that section as at some point in
time there had been questions suggesting that people thought TCs and
TAs were a mechanism to directly insert records into Horizon without the
branch seeing them and being able to review and formally accept or reject

them; a perspective that was not the case.

My recollection is that I was involved at various times in providing input or
identifying other relevant teams for input, in response to a wide range of
questions and reviews. Some questions included reports related to the
matters in this Inquiry but other questions would have related to reviews
such as for strands of the Back Office Efficiency Programme, for lean
process improvement work, for central system migration projects, for
P&BA areas impacted by Horizon upgrades (including an aborted attempt
to explore an alternative point of sale system), for process understanding
related to tenders and new suppliers for cheque processing and card
processing, for routine internal and external audit, for POL separation as
part of Royal Mail privatisation and for process reviews linked to
headcount reduction programmes. I think there were other reviews too,

again not related to Horizon.

Given the range of process reviews mentioned above, I am sorry that I
cannot remember how to differentiate my involvement with considering
and responding to Second Sight’s interim report or to the establishment
and running of the Mediation Scheme, but I would expect that my
involvement would have been in just the same way as I have already

explained in several sections above, wherein I or my team may have been

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65.

66.

67.

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the people best placed to respond to specific topics. In that regard, the
documents shared with me by the Inquiry show that I had significant
involvement in responses to questions about suspense accounts. Other
topics that I appear to have had input on include transactional processes

for several products served at the counter or in branch.

I cannot recall the nature and extent of any involvement I had in POL’s
response to applications made to the Mediation Scheme. As above, I
would, however, expect any involvement again to be due to me or my

team being the people best placed to respond to specific topics.

I cannot recall, and do not know if I knew at the time, who at POL was
responsible for its strategy responding to applications to the Mediation

Scheme.

In addition to the areas underlying the questions which I have answered
above, I do not recall what other input, if any, I may have made to POL’s
response to complaints made by subpostmasters concerning the Horizon
IT system. However, I do recall that I had other direct dialogue with
subpostmasters which may have been initiated as a consequence of the
work with Second Sight. At some point, a forum of a small number of
subpostmasters was convened and I think this group had at least one
meeting, and maybe more, in Chesterfield and possibly in London. I
cannot recall for sure what the group was called (possibly the Branch
Forum?) nor whether the subpostmasters in the group had been chosen
as part of some wider exercise. Nevertheless the group did meet and I

believe I introduced several of my team to them, such that we could

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68.

69.

70.

71.

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explain more about the processes in Chesterfield and about how the P&BA
team (or subsequently the FSC team) worked with branches. Moreover,
during one family holiday we happened to have a cottage near to the post
office run by one of the group and I agreed with my family for me to spend
some time in branch with the particular subpostmaster to consolidate on

what was probably a recent meeting of that forum.

I was briefly asked about suspense accounts in the questions for my first
witness statement, which involved review of document POL00022297. I
was not able to recall the related discussions, however, I noted that it
appears that I set out the breadth of scenarios that arise across different
products and that it was not a short or simple thing to explain all those
variations. The implication appeared to be that I could not give a short

answer.

The bundle shared with me this year includes several more documents
which I can now see originate from a question asked by Second Sight in
an email included in POL00205842. I can see that I was then involved in a

number of iterations of explanations to respond to the question.

I believe that the one meeting that I do remember attending with Second
Sight, was also with Alisdair Cameron, in POL’s London offices. I think this
was probably the meeting being anticipated in POL00218943 where there

was a reference to putting me “through his paces.”

I cannot recall what preparatory meetings, if any, may actually have taken
place to put me “through his paces” and I would like to think that I had a

clear enough understanding of what appears to have been a technically

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72.

73.

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complex account, in order to fully assist in explaining the account and
answering questions about it on the day. However, as has been noted in
POL00296291 I had previously been challenged in annual appraisals
about droning on and not being succinct enough (ie. I would sometimes
confuse the listener or the reader with repetition and unnecessary detail,
rather than succinctly get to the point). This was clearly a learning point I
had attempted to take on board from that previous year’s annual review
and probably from ongoing feedback — I expect that this was the origin of

others suggesting that I should be put “through his paces.”

As regards other meetings on this, I cannot recall meeting with Second
Sight again but I think I was involved in several iterations of a document
that other items in the bundle show as an expanding piece of work. I may
have corresponded direct with Second Sight or I may have corresponded

via one or more of the other Post Office staff mentioned in the emails.

I do, however, believe that I met with Alisdair Cameron in Chesterfield and
in London to explain this and other unrelated topics. Those other unrelated
topics included understanding supplier invoices and the status of central IT
system projects following on from POL separation after Royal Mail
privatisation. I don’t recall the content of the conversations but I do recall
that the style of the conversation was positively probing. I explained in
paragraph 24 above regarding POL00296291 that I was regularly
challenged by line managers and peers to be more strategic and not get
meetings bogged down in detail — I do believe that I felt somewhat
reassured but also positively challenged that Alisdair, who had a strong

strategic focus, wanted to work through the detail of how such things as

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74.

75.

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suspense and supplier invoices worked. I think that he felt POL needed to
be able to respond faster and more clearly to Second Sight and that he
wanted to be able to give the necessary level of detail in the answers to
save Second Sight from having to ask follow up questions that we might
be able to anticipate, given that the work had already been going on so
long. In working with Second Sight, I believe I was neutral. I can see that
the situations were complex and I would have probably felt that there were
helpful process improvements that might come to light even if Horizon was
not faulty. My sense from the documents shared with me is that there were
indeed such areas being noted in the Spot Reviews eg. The understanding
of “Recovery” and the understanding, rationale and review of receipts

printed by Horizon.

Second Sight posed the question as to whether SPMs may have paid for
alleged shortfalls that became profits in POL’s or its clients’ suspense
accounts. I was involved in compiling POL’s responses to that question
and POL00025783 included product examples, process explanations and

a rationale for why this was considered not to be the case.

In my role as Head of Finance Service Centre, I felt I had a good
understanding of the accounting processes, including client data matching
routines and associated inquiry routines, which were overseen by my team
in Chesterfield. The specific examples in POL00025783 supplemented by
my wider understanding of the routines across my team would have been
the reason for my view that SPMs were not paying for profits in POL’s or

its clients’ suspense accounts.

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76.

77.

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I do acknowledge the fair point that Second Sight made at the end of
POL00218946 wherein they respond to a comment about data from
Regulated and Audited Entities and they say “We therefore reject the
assertion that data emanating from such entities can be so heavily relied
upon that there is no need to check it.” What I would like to add here is that
teams in the FSC did not assume that client data was always right — the
results from comparing branch data against client data via the central data
matching routines could lead to enquiries being raised with either party
(the client or the branch or both). There was, for example, a suspense
balance some years before the period that Second Sight asked about
wherein POL was confident that it owed funds to another national
institution but the other institution disagreed. A National Audit Office report
into that institution then came to light which I believe had challenged the
accounting processes at that organisation and this, with further discussion
between the parties, led to a conclusion that POL data should be relied on
and that the client data was not right. This is an example that supports
Second Sight’s challenge but also shows that POL had proven examples
of identifying and challenging such matters itself, not simply leaving a

balance in suspense to be taken to profit.

As regards the question of whether analysis of POL’s or its client's
suspense accounts could identify whether any SPMs had paid to settle
illusory losses generated by Horizon, it was not mine or POL’s view at the
time that there were illusory losses. However, if we do explore the premise
of illusory losses then if an illusory transaction and a consequent illusory

accounting double entry were to have happened in branch (or if a

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transaction and double entry that should have been recorded failed to be
recorded) then we would have to explore whether the same illusory
transaction or lost transaction would manifest itself in the same way in the
data or paper stream to the client (and potentially to the method of
payment processor for cheques or cards) as well as to the transactional
data stream being harvested from Horizon to the FSC. The investigation
process would vary between client transaction types and whether there
was an additional off-Horizon device involved, or customer paperwork to
be sent off or method of payment batches to be sent off. The central
matching processes should have enabled an issue to be identified if it
affected just one data stream, but if there were an illusory transaction
reflected in both the POL data stream and in the client data stream, or if a
genuine transaction were missing from both, then the FSC matching

routine would not raise an issue as both data streams would be the same.

I apologise that, despite my development point to be more succinct, I have
had to use lengthy narrative above. This is, however, a necessary
reflection of the complexity and diversity of the products and processes
that SPMs had to manage in branch and that similarly confronted central
processing teams. My recollection is that such processes were well
documented, and were believed to run effectively, but were subject to
regular update due to changes in products and branches as well as to
matters such as LEAN process improvements, and therefore the related
documentation would need regular update as expanded on further in a
later section of this statement. It was complex and it again reinforces the

challenge that Second Sight acknowledged of how hard it is to disprove a

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79.

80.

81.

82.

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negative.

At the time, based on the general but perhaps misplaced confidence in
Horizon and in its related processes, and in light of the credits or write offs
agreed for the known issues disclosed to Second Sight and referenced in
their Interim Report, my recollection is that neither I nor POL believed that
there were illusory losses nor that SPM’s were paying for alleged shortfalls

that generated profits for POL.

Whilst my memory of process detail has inevitably faded, I would have
continued to hold the same view purely from my recollection of FSC
processes and from my re-reading of the documents that I was originally
involved in preparing, which are now included in the bundle for this witness
statement. However, I would be less confident to say that now, with
hindsight, in light of the increased concern about Horizon that has arisen

through this Inquiry.

I cannot recall how involved I was in respect of what documentation was
provided to Second Sight, however, the indication that I was being
challenged about my ability to present a simple answer for the Suspense

Account suggests that I was tending to produce extensive detail.

As explained earlier, I was involved in preparing or reviewing a wide range
of documents for a wide range of projects across the company. I cannot
therefore recall exactly what I was responding to and the extent of my
involvement in each one individually, however, from review of the
documents shared with me for this statement I can see that I was heavily

involved in responses to the suspense account aspects of the Second

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Sight reports and that I reviewed the Factfile POLO0201859 which I
presume arose as part of responding to a Second Sight paper. I believe
that in making any responses about accounting processes I would have
satisfied myself due to mine and my team’s experience of the branch and

client facing processes in FSC.

83. I cannot remember whether I was consulted as part of the decision making
to terminate Second Sight’s engagement, but I was not the owner of the
relationship with them, I did not initiate their appointment and I would
certainly not have been in a position to terminate it. It is clear from the
documents in my bundle that I was involved in responses to their review
for at least a two year period. I was, however, operating as a respondee to

questions, not as an owner of the relationship with Second Sight.

Project Zebra

84. I confirm I have read the following documents:

i. POL00105635 (Deloitte Project Zebra — Phase 1 Report: Draft —
For validation in advance of Board discussion on Wednesday 30th

April);

ii. POL00031384 (Deloitte - HNG-X: Review of Assurance Sources —

Discussion Areas re: Phase 2 — Draft For Discussion);

iii. _POL00031391 (Deloitte HNG-X: Review of Assurance Sources —
Phase 1 — Board Update at 13/5/14, subject to completion and

delivery of our final report on 16th May 2014);

iv. POL00029726 (HNG-X: Review of Assurance Sources Board

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85.

86.

87.

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Update, as at 16/05/2014, subject to completion and our final report

on 23rd May 2014).

v. POL00028062 (Deloitte - Horizon Desktop Review of Assurance
Sources and Key Control Features, Draft for Discussion, dated 23

May 2014);

vi. I POL00028069 (Deloitte Board Briefing, Document, further to our
report “Horizon: Desktop review of assurance sources and key
control features” dated 23/5/14, responding to five specific matters

identified by POL as critical to POL’s legal position); and

vii. POL00031410 and POL00031411 (Chris Aujard’s papers on

Project Zebra).

The purpose of Project Zebra appears to be set out in point 2.1 of
POL00031410. As I said in my first statement, I cannot recall anything to
cause me to suggest any other description for their involvement than is

given in the introduction to that document.

I clearly became involved in providing information for this project and in
responding to documents associated with it, but I do not recall that I was
involved in proposing this project or in defining its scope, except for the
proposal referenced as A4 which I made and which then became part of
POL00031410. As I have explained in earlier paragraphs related to other
reports, I was typically involved where I or my team may have been the

people best placed to explain particular accounting processes.

I was not involved in proposing this project or in defining its scope, I do,

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88.

89.

90.

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however, believe that at some point I was asked by the then Finance
Director or by a peer in Finance Lead Team for my thoughts on which firm
from a shortlist of the largest audit firms would be most independent from
POL and therefore best able to be seen to give the most independent and
objective view in a non-audit project. I think that question arose in a
process which led to Deloitte being selected for the piece of work and in

light of the documents in this bundle I expect it was for Project Zebra

I don’t recall and I don’t know if I knew at the time, why POL commissioned
a review of assurance sources. Point 2.1 of POL00031410 sets out who
commissioned Project Zebra. Point 3.2 of POLO0031410 states that
Deloitte did not test any of the relevant Horizon features. I do not recall
being asked to consider commissioning them to do testing and I do not

know what the actual commissioners of the report considered.

I recall that I met members of an engagement team from Deloitte in
Chesterfield and I presume that would have been to do with this project.
On that presumption, I think I would have given them an overview of the
processes of the FSC and of the data flows from Horizon into FSC

systems.

I cannot recall what my views were on the reports produced by Deloitte,
however, I clearly felt that a recommendation referenced as A4 in
POL00031410 needed editing. Nine years on from that report I cannot
recall exactly what I thought at the time, however, I have read my
proposed edit and I continue to believe that it was an appropriate

interjection for the following reasons. I believe that the wording of Deloitte’s

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draft recommendation in the table in Appendix 1 of POL00031410 could be
read as suggesting that FSC could make adjustments to SPM ledgers and
that FSC did reconciliations to the Audit Store, whereas I believed at the
time (and my view has not changed) that FSC could only propose
Transaction Corrections and Transaction Acknowledgements which would
be sent to SPMs for their review and their acceptance or rejection in
Horizon, rather than it being the case that FSC directly put an adjustment
into Horizon. If FSC had been able to make adjustments into Horizon this
would have undermined the principle of branch ownership and would have
meant that FSC could become a bad actor or be accused of being one. It
was always held as important that it should only be the SPM or their own
staff who make the entries in Horizon (including formally accepting or
rejecting TCs and TAs). FSC might spot an issue and notify the branch of
it, but this had to be done in a way where the branch had control of any
actual entry into Horizon. I believe that I would have seen it as
fundamental to make that distinction and I continue to believe, based on
the documents shared with me, that this was a wholly appropriate and
wholly constructive proposed amendment. My proposed edit also
explained what I understood to be the format difference between data in
Horizon versus data in the Audit Store versus data batched by client for
settlement routines in FSC — FSC did not do reconciliations against the
Audit Store and I must have felt strongly that this needed clarifying too. I
feel that I then set out an onerous and open commitment for FSC
involvement in documentation of processes and controls in FSC and in the

data pipeline from point of sale to central finance systems. I continue to

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believe that this was an open, constructive and extensive proposal. FSC
already had lots of documentation of processes and it had been reviewing
them as part of LEAN process improvement work and as part of routine
business continuity work. Given the frequency of new product deployment
in branches and online, and changes to central systems such as on
separation from Royal Mail, it was recognised that there was an ongoing
need to maintain and update business process documentation. This was
common business practice and would have benefits for training new staff,
maintaining process knowledge when people leave, for good governance

and for general business continuity.

91. Deloitte produced detailed reports and recommendations. I don’t know
whether it met its intended purpose and I think that would be a matter for

the commissioners of the report to comment on.

92. I do not recall and I don’t know if I knew at the time, how POL used the
Project Zebra reports. That said, the edited proposal for ensuring
comprehensive documentation of key processes in FSC was very much a
priority within FSC anyway as it was important to the ongoing LEAN
process reviews within the team and indeed was good practice for any
organisation. This would therefore have continued regardless of Project

Zebra.

Tim Parker’s Review

93. I was clearly involved, as a key process owner, in responding to a
succession of reviews and reports. I do not recall having been in a meeting

with Tim Parker for such a review and I do not recall being involved in

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instructing Sir Jonathan Swift — that would have been a matter for the
Legal team. My recollection is that I met Tim Parker on two occasions.
Firstly in a general POL Leadership Forum which would have been of the
nature of a strategic update generally on company performance, not about
this topic. Secondly as part of a series of Exec Member visits to POL
administrative sites around the country — he visited Chesterfield en route to
Dearne and my recollection is that this was for general staff Q&A sessions

and to walk the floor to meet the teams.

94. I do not recall what report became called the Swift Review nor whether I
read it. I presume that it was a follow on to the matters noted in
POL00006356. I left the Post Office about a month after the date of that
document and I do not recall whether I received further reports for input or

review in that time.

General

95. With the hindsight of reading the many documents shared with me for this
Inquiry and having reflected on my time at POL, I continue to believe that I
and my teams were focussed on making branch and client transaction
processes as easy as possible from point of sale through to FSC and on to
clients themselves. This was intended to be of benefit to Subpostmasters
and other colleagues in branch and to be of benefit in central POL
processes. For Subpostmasters, it was intended to help them get it right
first time and to save them time when serving customers and when doing
administrative routines. For central POL functions, it was intended to have

benefits in terms of reducing enquiries, reducing the need for interventions

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96.

97.

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such as Transaction Corrections and to improve the experience for
customers and for corporate clients. I and my team received positive
feedback for my work on that from POL management, from NFSP, from
unions and from individual branch operators including subpostmasters and
other franchise partners. This was done against a wider backdrop of
enormous change for POL with new products, new systems, new partners,
new funding, network restructuring, Royal Mail privatisation, exploration of

mutualisation, change of suppliers and frequent strike action.

That said, it is also very clear that an awful chain of events took place for
the subpostmasters who have suffered in this scandal, and that pain

continues. I am sorry for that.

In hindsight, I wish that I could go back and do the following to have

helped change the sequence of events:

97.1 Challenge IT to explain why they rejected the IT expert's opinion in

the Cleveleys case

97.2 Challenge the corporate over-confidence in Horizon and in its
support processes in light of the allegations against the system in

various cases and in various items of media comment

97.3 Challenge the Legal Team, in the West Byfleet case, regarding
exactly what was needed, if anything, in response to the request
that I received third hand about a possible defence visit to
Chesterfield. I would always have wanted to ensure that everything

was done that needed to be done, but in this case a third hand

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request was vague. I and my teams were always very stretched,
with our roles supporting many transformational programmes, and
so additional unclarified requests for more work would be unlikely to
have been the most welcome developments, but if something
needed doing we would absolutely have done it. We just needed to
know and, in this case, it would have needed the POL Legal Team
to be clear about what had been agreed by POL and what needed

doing.

97.4 Agree and document a terms of reference for the report that I
compiled in 2010, and make clear to the audience for that report,
and to future readers if necessary, that it was simply a summary of
the reasons for assurance at the time, as had been requested, and
was not an investigation of the allegations being made or an audit of
the reasons for assurance and that I would not be compiling
ongoing updates if any new information emerged and, if these
others were wanted then proper consideration needed to be given
as to how and from whom that would be commissioned as a

separate properly resourced exercise.

97.5 Challenge IT about the visibility and understanding of what was
evidently a much longer list of issues than I had understood to be

the case when compiling the report in 2010

I do not recall how an audit and investigation would have panned out in
detail, and I don’t know how they are conducted today, but with the benefit

of hindsight I would say that it is imperative that there is an environment

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and a culture whereby an SPM or other branch manager feels absolutely

supported and knows what to do to raise an issue.

Then, if a situation arises whereby the SPM feels that the Horizon
accounting record is not accurate (presumably due to an actual transaction
not having been recorded at all, not having been recorded properly,
perhaps having been recorded in duplicate, being delayed or perhaps a
feeling that a transaction which did not happen at all is actually featuring in
the records) then I would suggest that between the SPM and a POL
support team there needs to be a prompt and thorough analysis to pinpoint

the following:

99.1 The last date and the balances when the SPM was happy with the
records — given that branches typically “cash up” each day, this

could therefore become an almost real-time process

99.2 The full list of transactions, remittances and other events recorded

in Horizon since that date

99.3. Exactly which of the transactions, remittances and other events in
the list were felt by the SPM to have been recorded wrongly, or

which such items had failed to be recorded

99.4 This would then enable a prompt investigation and response to the
concerns noted. This would be an improvement on the situation
described by some SPMs where they felt that there had been a long
period of no support and where everyone’s memories would

probably have been challenged by the prospect of proving what

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exactly had happened over a long period of time.

99.5 This would inevitably carry a significant resource cost and so it
would be of additional priority that a baseline be reached whereby
all colleagues across the network do feel confident in the processes
applied to the point of sale system throughout its development,
testing, upgrades and incident management. This is a large
challenge and may require some sort of representative groups that

all parties can have trust in.

100. Some SPMs have explained that they felt they had little or no training on
the accounting aspects of running a post office, perhaps as opposed to
other matters such as sales training which may have been part of their
induction. It seems to me that it is imperative that SPMs should feel they
receive adequate training and support in such matters and that either they
then feel equally confident to train their own members of staff or that some
other model of training is developed by POL to encompass SPMs own

employees as opposed to just SPMs.

101. There appears to have been no clear owner of Horizon and, although there
were probably many people in support roles (eg. Contact centres) and in
project roles (eg. For Horizon Online development) there does not appear
to have been a sponsor or owner for the live system. Consequently,
situations appear to have arisen where other individuals such as myself
who had an understanding of certain discrete related processes such as
product and branch accounting, were called on (or volunteered in the

absence of others) to collate information about wider areas when a proper

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system owner should have been in place and responding. There needs to
be clear ownership and Board sponsorship in future. At the same time, it
should be ensured that there is clear documentation, communication and
ownership of any related policies and processes that relate to Horizon
including matters such as training, support, maintenance, audit and

investigation.

102. Bearing all the above in mind, I apologise for the misplaced confidence
that I and others had in Horizon, for the seeming corporate naivety and the
absence of clear ownership. I believe that the sad chain of events which
panned out, with such awful impacts on subpostmasters, was a sad
outcome from a variety of teams across the whole of POL having
misplaced confidence in Horizon and taking assurance from the availability
of a wide range of support processes without proper recognition of the
complaints that were evidently being made about those processes. It was
a failure of not listening, a failure of not working together and a failure of
ownership in an organisation that simply had too many issues on too many

fronts.

103. The cash context may also merit reflection in the relationship between
POL and SPMs. POL has had strategic ambitions at various times to be
the banking hub for UK citizens and to be central to cash supply to the
nation. There has indeed been much progress in those matters. It builds
on the longstanding “cash equilibrium” which underpinned the operational
model of the Post Office in the late 20th century wherein a large part of
state benefits were paid out in cash in post offices and a large part of

retailers’ cash deposits were made into Girobank via post offices. As a

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consequence, POL’s business has been heavily cash focussed and that is
in stark contrast to the situation in most other retail franchises where there
may well be a requirement to manage cash and stock and there may be
important compliance responsibilities, but there is unlikely to be the need
to provide security for tens or hundreds of thousands of pounds of cash.
That cash environment could, in a minority of cases be a temptation, but it
can also be a stressful and potentially unexpected aspect of the job for
someone whose main aspiration is the friendly service of their community.
Somewhere, in the learnings from this Inquiry, that cash environment and

the decisions around it need reflection.

104. Sadly, and probably due to the now ceased model of POL prosecutions,
this whole situation has had and continues to have an adversarial context
and needs to move to a collaborative context for the future success of the

Post Office network and of the people that are that network.
105. I also provided earlier reflections in my first witness statement.

106. There are no other matters that presently occur to me which I would like to

draw to the attention of the Chair.

Statement of Truth

I believe the content of this statement to be true.

Dated: j0!"A pei I 2024

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Index to Second Witness Statement of Roderick Mark Ismay

No. I URN Document Description Control Number

1. I POLO0142503 Email from R Ismay to D Parker, I POL-BSFF-0001779
M Talbot and others; 'Legal case
- Cleveleys PO 153 405 Mrs J

Wolstenholm'

2. I POLO0142504 Advice on evidence and} POL-BSFF-0001780
quantum by Mr_ Brochwicz-

Lewkinski dated 26 July 2004

3. I POLO0158510 Julie Wolstenholme Case Study: I POL-0147328
Email chain from Carol King to
Rod Ismay re: Re: Cleveleys PO

153 405 Mrs J Wolstenholme

4. I POLO0158512 Julie Wolstenholme Civil Case I POL-0147330
Study. Email from Carol King to
Rod Ismay RE: Mrs Julie
Wolstenholme former
Subpostmistress Cleveleys PO -

FAD 153405

5. I POLO0142505 Email chain from Tony Marsh to I POL-0143796
Tony R_ Utting, Rod Ismay,
cc'ing Carol King and others re:
Legal case - Cleveleys PO 153

405 Mrs J Wolstenholme

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WITNO0210101 Letter from Jason Coyne, Best} WITN00210101
Practice Group PLC to Susanne
Helliwell at Weightman Vizards
with Opinion (20.01.04) in the
matter of POL v Wolstenholme

CR101947

POL00088935 Report from Rod Ismay, Head of I POL-0085993
Product & Branch Accounting to
Dave Smith, Mike Moores and
Mike Young regarding Horizon -
Response to Challenges

Regarding Systems Integrity

POL00296291 2012/23 - Pre Year End PDR - I POL-BSFF-0134341

Rod Ismay

POL00046944 Letter from Shoosmiths to The I POL-0043423

Post Office re: Julian Wilson

.I POL00294879 Memo from Rod Ismay to I POL-BSFF-0132929
Angela Van Den Bogerd and
others on 12/10/11 re: JFSA and
Shoosmiths / Access Legal -
Response to Challenges -
Proposed Steering Group and

Purpose.

POL00027523 Post Office Significant Litigation I POL-0024164

Report November 2012 RE:

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Claims over £500k or those of a

sensitive nature- Horizon Claims

12.

POL00294843

Email from Rod Ismay to Hayley
Fowell re: Private Eye inquiry -

Horizon - latest draft response?

POL-BSFF-0132893

13,

POL00184724

Second Sight - Agenda proposal

email sent by Rod Ismay.

POL-BSFF-0022787

14

POL00184725

Second Sight - Agenda
Proposal (for pre-meet w/c 11

Feb)

POL-BSFF-0022788

15.

POL00184726

Email from Ron Warmington to
Simon Baker, lan Henderson,
Rod Ismay re Fwd: Bracknell

site address

POL-BSFF-0022789

16.

POL00184727

Email chain between Rod Ismay

and Ron Warmington — re:

Bracknell site and Fuijitsu

POL-BSFF-0022790

17.

POL00097548

Email from Simon Baker to

Craig Tuthill, Dave Posnett,
Gareth Jenkins and others RE:

First Three Spot Reviews

POL-0097131

18.

POL00185683

Email from Simon Baker to
Susan Crichton, Alwen Lyons,
Rod Ismay and others RE: notes

from today's phone meeting *re-

POL-BSFF-0023746

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issued*

19.I POL00098035 Email from Andrew Parsons to I POL-0097618
Simon Baker, Lin Norbury,
Gareth Jenkins re: Spot
Reviews (1, 11, 12 and 13) -
Confidential drafts - legally
privileged

20.) POLO0130162 Spot Review 1 - Response I POL-0120371
(Draft) v.2

21.I POL00130163 Spot Review 11 - Response I POL-0120372
(DRAFT) v3.

22.) POLO0130164 Draft Spot Review 1 - Response I POL-0120373
Report for 2013, Version 2

23.I POLO0090567 Interim Report into alleged I POL-0090088
problems with the Horizon
system

24.I POL00029849 Initial Complaint Review I POL-0026331
Mediation Scheme: Second
Sight Briefing Report - Part Two

25.I POL00002082 RE: Second Sight part two - I POL-BSFF-0046362
amendments/adjustments to
introductory section.

26.I POL00022598 Horizon Data Lepton SPSO I POL-0019077

191320 by Helen Rose (v.1

draft)

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27.

POL00145290

Email from Rod Ismay to POL
FSC Team . Re. focus online

special: Horizon Report.
Addressing " a bug", Horizon

and Second sight.

POL-BSFF-0004417

28,

POL00191780

Second Sight Interim report

follow on.

POL-BSFF-0029843

29.

POL00083932

Meeting Minutes for Regular

Call RE: Horizon Issues on

19/07/2013.

POL-0080863

30.

POL00139731

Meeting: Regular Call re Horizon

Issues

POL-0141432

31.

POL00139732

Regular Call Minutes re Horizon
Issues including action points

dated 31/07/13

POL-0141433

32.

POL00201858

Emails regarding changes to the

fact file "V7 Rod review"

POL-BSFF-0039921

33,

POL00022297

Email chain from Andrew

Parsons’ entitled "suspense

document"

POL-0018776

34.

POL00201859

POL Initial Complaint Review

and Mediation Scheme.
Overview of Horizon and branch

trading practices (DRAFT)

POL-BSFF-0039922

35,

POL00205842

Emails regarding Errors that

POL-BSFF-0043905

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arise between POL and _ its

clients and others.

.I POL00004439 Initial Complaint Review and I VISO0005507
Mediation Scheme - Briefing
Report - Part One - Prepared by

Second Sight

.I POL00206939 Emails re: Paper from finance I POL-BSFF-0045002
which deals with Second Sight's
questions relating to suspense

accounts.

.I POL00206940 Initial Complaint Review and I POL-BSFF-0045003
Mediation Scheme - Suspense

Account

.I POL00207085 Suspense Account paper I POL-BSFF-0045148
Second Sight. RE. requiring
"details of month end balances
for this account for the last 3
years together with details of

amounts released to P&L".

.I POL00021762 Minutes: Project © Sparrow- I POL-0018241
Chairman's Report
Recommendations - POL and

Deloitte meeting

.I POL00208183 Rod Ismay's feedback to SS I POL-BSFF-0046246

doc.

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42.

POL00021808

Email chain from Rod Ismay to
Andrew Pheasant: RE: SS Doc -
Rod's feedback - 29/8 2.30pm

update [BD-4A.FID20472253]

POL-0018287

43

POL00208299

RE: Second Sight part two -
amendments/adjustments to

introductory section.

POL-BSFF-0046362

44)

POL00021763

Email from Andrew Pheasent to
Rod Ismay re: Second Sight
Part Two - ATM and other bits of

sections 2

POL-0018242

45.

POL00021849

Email chain between Rod Ismay
and Andrew Pheasent re: Part 2

response - cash remittances.

POL-0018328

46.

POL00210892

Emails re: Suspense account

paper Second Sight.

Attachments including further
questions from Second Sight

and Andy's suggested response.

POL-BSFF-0048955

47.

POL00210893

Initial Complaint Review and
Mediation Scheme - Suspense
Account. Prepared for Second
Sight in response to questions

raised.

POL-BSFF-0048956

48.

POL00218260

Email regarding answers

POL-BSFF-0056323

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provided to Second Sight ahead

of the meeting

49.

POL00218261

Complaint Review and

Mediation I Scheme-

paper
prepared by POL to assist

Second Sight — with the

finalisation Briefing report - part

2

POL-BSFF-0056324

50,

POL00022296

Notes on meeting held with
Second Sight on the 9th of Jan

2015

POL-0018775

51,

POL00218910

Emails RE: Working Group

meeting of Complaint and

Mediation Scheme request for
from POL's

info. suspense

account.

POL-BSFF-0056973

52,

POL00218920

Email from Chris Aujard to Rod
Ismay, CC Belinda Crowe and
Patrick Bourke re: Suspense

accounts

POL-BSFF-0056983

53.

POL00025788

Email from Rod Ismay to
Andrew Parsons re: Suspense

Document

POL-0022267

54,

POL00025783

Initial Complaint Review and

Mediation Scheme - Suspense

POL-0022262

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Account - Second Response

55.

POL00150950

Email from Rod Ismay to

Andrew Parsons re: FW:

Suspense Account [BD-

4A.FID20472253]

POL-BSFF-0010062

56,

POL00150951

Initial Complaint Review and
Mediation Scheme. Suspense

Account - Second response

POL-BSFF-0010063

57,

POL00218943

Email thread from Belinda

Crowe to Andrew Parsons,
Angela Van-Den-Bogerd cc’ing
Mark Underwood RE: FW:
Suspense accounts — legally
privileged for the purpose of

seeking advice.

POL-BSFF-0057006

58,

POL00218944

Email from Belinda Crowe to
Ruth Phillips, CC Chris Aujard
and Belinda Crowe re: suspense
accounts - concerning
information requested by

Second Sight

POL-BSFF-0057007

59,

POL00218945

Questions raised re Second

Sight's Briefing Report -

Suspense Accounts.

POL-BSFF-0057008

60,

POL00218946

Email thread from Belinda

POL-BSFF-0057009

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Crowe to Andrew Parsons cc’ing
Patrick Bourke, Chris Aujard and
others RE: FW: FW: Errors that
arise between Post Office and

its clients and others.

61.

POL00218947

Initial Complaint Review and
Mediation Scheme - Suspense

Account

POL-BSFF-0057010

62,

POL00312064

Email RE: Suspense -

independent firm - scope &

procedures drafts. Including

Suspense - Scoping doc for
and

Independent review

Suspense agreed upon

procedures attachment

POL-BSFF-0150114

63.

POL00312065

Suspense - Scoping document

for Independent review.

POL-BSFF-0150115

64,

POL00312066

Agreed upon Procedures

template response for Client

Suspense Account — during

financial years 2010/11 to

2013/14.

POL-BSFF-0150116

65.

POL00224476

Email Re: Second Sight's Part
Two Report and assertions

made in relation to Suspense

POL-BSFF-0062539

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accounts.

66.

POL00151682

Email from Rod Ismay (POL) to
Mark Underwood (POL) and

Alisdair Cameron (POL) CC
Belinda Crowe (POL) & Others
Re: Second Sight's Part 2
Report and assertion made in

relation to Suspense accounts

POL-BSFF-0010794

67,

POL00225340

Emails Re: Second Sight

outstanding request for

information in relation to

Suspense Accounts.

POL-0147330

68.

POL00226357

Emails RE: Second Sight's Final

Part 2 Report.

POL-BSFF-0064420

69,

UKGI00000018

POL response to Second Sight
briefing report - Part Two as part
of the Complaint Review and

Mediation Scheme

VvisSo0000979

70,

POL00105635

Project Zebra - Phase 1 Report -
HNG-X: Review of Assurance

Sources

POL-0104595

71

POL00031384

HNG-X Review of Assurance
Source concerning: Phase 2

Drafted by Deloitte.

POL-0028286

72,

POL00031391

Deloitte's HNG-X Review of

POL-0028293

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Assurance Sources : Phase 1-

Board Update AT 13/05/2014

73,

POL00029726

Deloitte HNG-X: Review of

Assurance Sources Report v2

POL-0026208

74,

POL00028062

Report: Horizon Desktop Review
of Assurance Sources and Key
Control Features - draft for

discussion, Deloitte

POL-0023065

75,

POLO0028069

Deloitte Draft Board Briefing
document further to report on
Horizon desktop review of
assurance sources and key

control features

POL-0023072

76,

POL00031410

Report: Horizon review by

Deloitte

POL-0028312

77.

POL00031411

POL Risk and Compliance
Committee Horizon review by
Deloitte (Project Zebra) - Paper

2

POL-0028313

78,

POLO0006356

Minutes: Project Sparrow-
Chairman's Report
Recommendations - POL and

Deloitte meeting

POL-0017624

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