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Leaked report sparks Horizon questions

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23rd Sep 2014
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The Post Office has been criticised for its handling of the Horizon accounting software issues in a leaked report. 

In January last year, it announced it would investigate whether the software used by its 11,500 branches was to blame for unexpected losses. 

Around 150 subpostmasters and mistresses claim they have had to wrongly pay for discrepancies, have been fined and in some cases imprisoned, due to the error. 

Subpostmasters are, under contract, responsible for deficits by their branches. 

Action group Justice for Subpostmasters Alliance (JFSA) claims Horizon software, used by thousands of Post Offices nationwide, is to blame for these accounting discrepancies in some cases.

However the Post Office has denied that there is a problem with the system.

External investigators Second Sight has been examining the allegations since June 2012. It has since published an interim report. However a new, unpublished report has been seen and reported on by BBC News and Private Eye. 

According to the BBC, the leaked report criticises the technology, stating it was not fit for purpose in some branches. It reportedly added that investigators did not look for the root cause of the errors but instead accused the subpostmasters of false accounting. 

The report added that training given to those without IT skills was "not good enough" and that equipment had been outdated. Power cuts and communications had apparently made matters worse, it said. 

The software, implemented in 1995, is used by more than 78,000 people across 11,500 branches and processes six million transactions per day.

According to Private Eye, the investigators seem to have "defaulted to seeking evidence that would support a charge of false accounting, rather than carrying out an investigation into the root cause of any suspected problems... investigators seem to have found that recording admissions of false accounting was the key to achieving relatively rapid and inexpensive asset recovery.”

In addition, Private Eye said the report documented "inadequate record keeping" and poor auditing processes. 

AccountingWEB was unable to contact Second Sight regarding the report, and the JFSA declined to comment. 

Second Sight is working with the JFSA, which was set up in 2009, to help subpostmasters and mistresses who may be afraid of coming forward with information or problems surrounding the software to speak out.

The Post Office said in a statement, while it would not comment on the contents of confidential documents, that after two years of investigation it remains that there is "absolutely no evidence of any systemic issues".

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David Winch
By David Winch
23rd Sep 2014 17:01

Postmasters

I have come across criminal prosecutions of postmasters / postmistresses in respect of apparent shortfalls arising from comparison of Horizon figures and actual cash & stocks.  I have also come across cases where the postmaster / postmistress has been obliged to put money 'back' but has vehemently denied that any shortfall had occurred in reality.

Of course it is absolutely routine for wrongdoers to deny wrongdoing - but the number of these instances in Post Offices is disturbing.

The volume & varied nature of transactions undertaken in Post Offices (sometimes with a cross-over between the Post Office 'proper' and a retail shop attached) creates scope for innocent error and it might seem an attractive option to 'carry forward' a shortfall from one week to the next in the hope that it will 'correct itself'.  To a criminal investigator this has a flavour of 'false accounting' and can result in prosecution if discovered.

It is to be hoped the expert reports will soon be published in full.

David

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