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Yet another sting in Horizon's tail

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19th Nov 2015
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The Horizon saga took another sudden twist with a leaked email from Post Office IT support which reveals a problem with their £1bn Fujitsu Horizon IT system that could lead to serious accounting errors.

Horizon has been mired in controversy since almost 150 sub-postmasters alleged they were wrongly accused of false accounting as a result of problems with the system. Forty-three received criminal convictions for fraud and a number went bankrupt fighting the charges.

Now, The Post Office’s IT support, a company called Atos, has sent an email to a Communications Workers Union (CWU) member revealing the flaw, promising to patch it by March 2016. But another email sent by Atos to a different individual, uncovered in a new Computer World report, reveals the software flaw, which could lead to the submission of inaccurate accounts, had occurred before.

Reacting to Computer World’s report, forensic accountant David Winch said: “If, as appears to be the case, the software error caused an accounting misstatement which (if it had not been identified & corrected) could have led to the postmaster being asked to pay a four figure sum to the Post Office, then that is a serious error. It is disappointing to see that a correcting software patch is not expected until March 2016.

“But what is most troubling of all is the possibility that this or other software glitches in the Post Office Horizon systems could be responsible for previous sub-postmasters’ losses & prosecutions,” he added.

The revealed glitches don’t gel with The Post Office’s strong denial that an error within Horizon could have led to the losses. In a previous statement to AccountingWEB, a Post Office spokesperson said, “There is no evidence that faults with the computer system caused money to go missing at these Post Office branches.

“The Horizon computer system is robust and effective in dealing with the six million transactions put through the system every day by our postmasters and employees at 11,500 Post Office branches. It is independently audited and meets or exceeds industry accreditations.”

The scandal has been probed by Second Sight, a forensic accountancy firm. Speaking on BBC Panorama three months ago, Second Sight’s director Ian Henderson accused The Post Office of “institutional blindness”. “In most instances, the Horizon system works very well,” Henderson told the BBC. “What seems to have gone wrong within the Post Office is a failure to properly investigate cases where it did go wrong”.

The Post Office has received heavy flak from MPs for “having a culture of denial” and “not looking for possible causes for unexplained losses”.

The number of fraud cases has left some feeling dubious over The Post Office’s denials. “Either the Post Office is awash with criminals who open sub-post offices for personal gain or something has gone terribly wrong. MPs are inclined to believe the latter and we are all shocked the Post Office seems to not want to get to the bottom of all this,” said Mike Wood, former MP for Batley and Spen.

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By DMGbus
20th Nov 2015 14:01

The unanswered question...

I have not yet seen answers to the following two questions (answers to be given under oath and if incorrect or misleading to be prosecuted for perjury):

If an alleged accounting error occurred in a Post Office operated by a major player (who could afford mega bucks in legal fees to defend their position) occured would the Post Office back down?Have there in fact been allegations of such accounting errors and, if so, on how many occasions have Post Office ran away from prosecution in the light of adversaries that could not be out gunned?

I have an ongoing doubt as to the guilt of successfully prosecuted Postmasters when there is seemingly so much doubt as to the accuracy / robustness of Horizon.  I rather suspect that juries have been "blinded by science" and defence lawyers might not have been told of material facts which could include undisclosed eMails.

If it is the fact that Horizon is defective and has wrongly been defended by Post Office directors who knew the true facts then it rather does suggest to me that those Post Office directors should be prosecuted rather than innocent Postmasters.   "Contempt of court"  "Perjury"  "False accounting".   It then would follow that very considerable compensation would be due to be paid by the Post Office to any innocent but wrongly convicted Postmasters.

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By Moonbeam
20th Nov 2015 16:23

My local post office had a problem a few years ago

I remember a quick change over of postmaster at my local post office a few years ago. He and his wife, who were the only staff, were reluctant to say why they were moving on. I later read in the local paper that "discrepancies" had been found in their books.

I was really puzzled, as I reckoned that they were honest hardworking people who would not have attempted any fraud.

So this article leads me to think I might be right. If so, whether both of them have the money/energy to sue the Post Office for defamation is of course debatable. Unless they are both union members I don't think they are going to be able to do anything. Maybe some sort of class action could be mounted to pay for an expert IT witness.

I am appalled that innocent hardworking staff can be treated so badly, but there are plenty of others in the public service who have been hung out to dry before now.

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David Winch
By David Winch
20th Nov 2015 17:21

It can get complicated

In a number of cases what has happened is that the accounting system has shown a shortfall at the weekly 'balance' (usually carried out as at the close of business on a Wednesday).  The 'text book' position is that the postmaster should immediately make good the shortfall.  But sometimes the postmaster will put this off - for example because he thinks it might be a timing discrepancy or some other error which will resolve itself.

However on some occasions the postmaster has 'hidden' the shortfall by making a false entry to 'balance the books', perhaps with the intention of giving himself time to sort things out one way or another.

The making of a false entry by the postmaster with the intention of avoiding having to make a payment is a criminal offence under s17 Theft Act 1968.  It has on some occasions been false accounting such as this to which a postmaster has pleaded guilty.

A guilty plea of course carries with it substantial mitigation - for example it increases the likelihood of avoiding an immediate prison sentence.

Where a postmaster has pleaded guilty to a criminal offence the postmaster is admitting dishonesty & the Post Office will naturally feel that its action & its systems have been fully vindicated.

Whereas the convicted postmaster will feel that he has lost his job / his business & his reputation unfairly & unjustly.

David

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By Moonbeam
20th Nov 2015 17:39

I accept your point, David

However, the Post Office have not been known in the past for enlightened approaches to staff management, and I continue to be biased against them - even if I'm wrong.

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David Winch
By David Winch
20th Nov 2015 19:17

My point is that circumstances can operate which result in a fundamentally honest person who (arguably) makes an error of judgement being subject to criminal prosecution, considerable stress, loss of income & loss of reputation.

Unfortunately the (no doubt well-intentioned & correct) advice which that person will receive is to plead guilty.  After that their protestations that they did nothing really wrong will fall on deaf ears.  It's all rather sad.

David

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By Christopher J Thacker
24th Nov 2015 14:12

Horizon

Gentlemen (and Ladies),

I discussed the matter of Horizon with my local Postmaster. He tells me that twice in the last two months he has had an imbalance - over - which is still to be sorted. He retained the "Surplus" cash in the safe.

He also tells me that the Horizon system is in use in the Crown Post Offices, and here imbalances are just written off. There would appear to be a complete difference of treatment between self employed sub-postmasters and paid Royal Mail Staff.

Christopher Thacker

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