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Panorama probes Horizon scandal

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19th Aug 2015
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A BBC Panorama report has raised yet more questions about the Post Office’s handling of the Horizon accounting system as postmasters, MPs, whistleblowers, and forensic accountants Second Sight all criticised the institution.  

Postmasters across the country have been accused of dishonesty in relation to cash shortfalls and forced to repay the money over 150 cases. Some have been convicted of false accounting and theft after auditors discovered cash shortfalls at numerous branches.

From the beginning, postmasters alleged that there was an issue with the Horizon computer system used by the Post Office since 1999. The postmasters’ problems started when the Horizon system would flag up an apparent shortfall in cash. As David Winch asked on AccountingWEB, though, “what if the sub-postmaster does not believe any shortfall has really occurred?”

“One seemingly attractive option is for the sub-postmaster to accept the cash figure shown on the Horizon system in the hope that there has simply been a hiccup which will resolve itself in a few days,” said Winch.

The postmasters interviewed by Panorama conclusively backed Winch’s assertion. All of them claimed that they reported the shortfall to the Horizon helpline, and said they were told they were the only ones experiencing issues with the system. Unable to explain the growing shortfalls, they allege, they naively signed off on the figures.

The Panorama report uncovered proof that errors within the Horizon system may have been responsible for the losses in some cases.

Second Sight’s freshly released report on the case said that it could find no evidence of theft. Ian Henderson, the director of Second Sight, 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 BBC uncovered an internal Post Office memorandum which said theft allegations could be used to pressurise postmasters into repaying the cash shortfall. Postmasters are contractually required to pay for such shortfalls.

The Horizon system is operated by the tech giant Fujitsu. Speaking to Panorama, a former Fujitsu employee who worked on Horizon from 2001 until 2004, said errors and glitches were far more widespread than previously known – some, he said, could’ve caused the missing cash.

The Horizon saga doesn’t look due to end any time soon. The Criminal Cases Review Commission is now investigating the convictions of 20 postmasters convicted of false accounting and theft.

The Post Office has completely rejected the accuracy of Panorama's report. “All of the allegations presented in the programme have been exhaustively investigated and tested by the Post Office and various specialists over the past three years or more,” said the Post Office in a statement. “The unsubstantiated claims and theories that continue to be levelled against the Post Office are at odds with the facts and are constructed from highly partial, selective and inaccurate information.”

They also stridently defended the Horizon computer system, calling it “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 full Panorama report can be viewed here

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Francois
By Francois Badenhorst
20th Aug 2015 10:21

Post Office reaction to BBC's Horizon coverage

[The Post Office has contacted AccountingWEB with the following statement regarding the Panorama Horizon report]

 

The Post Office wholly rejects extremely serious allegations repeated in BBC’s Panorama programme of 17 August 2015. The allegations are based on partial, selective and misleading information.

The Post Office does not prosecute people for making innocent mistakes and never has   There is no evidence that faults with the computer system caused money to go missing at these Post Office branches There is evidence that user actions, including dishonest conduct, were responsible for missing money

We are sorry if a small number of people feel they have not been treated fairly in the past but we have gone to enormous lengths to re-investigate their cases, doing everything and more than we committed to do.  

All of the allegations presented in the programme have been exhaustively investigated and tested by the Post Office and various specialists over the past three years or more.   The unsubstantiated claims and theories that continue to be levelled against the Post Office are at odds with the facts and are constructed from highly partial, selective and inaccurate information. 

This is about individual cases and the Post Office will not discuss those in public for very good reason.  The Criminal Cases Review Commission (CCRC) is reviewing a small number of cases involving criminal convictions. It will be provided with all available information including confidential legal material not available to others and we believe the CCRC should be allowed to complete its reviews without external comment.  We also gave a commitment of confidentiality to people who put forward cases to us for re-investigation.  

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.  

Background facts

Prosecutions

The Post Office has always taken its duty to act fairly, proportionately and with the public interest in mind extremely seriously.  The Prosecutions it brings are scrutinised by defence lawyers before they advise their clients and are, ultimately, ruled upon by the courts.

If money is missing from a Post Office branch and the fact that cash is missing has been dishonestly disguised by falsifying figures in the branch accounts, the Post Office is entitled to take action and does so based on the facts and circumstances of that specific case. Though rare, where there is evidence of criminal conduct, a decision may be made to prosecute.

Prosecutions are brought to determine whether there was criminal conduct in a branch, not for the Post Office’s financial considerations.

Post Office prosecutors are all experienced criminal lawyers, many of whom have significant experience in prosecuting for both Post Office and the Crown Prosecution Service.   In the rare instances that prosecutions are undertaken, the Post Office follows the Code for Crown Prosecutors (the same code as the Crown Prosecution Service).  The Code requires a prosecution to have sufficient evidence and be in the public interest, both of which are kept under review right up to and including any trial.   It means there must be sufficient evidence foreach charge - if a theft charge is brought, there must be sufficient evidence for a realistic prospect of a conviction for theft.

A charge upon which there is no evidence will inevitably fail. It is the duty of the defence lawyers to identify to the court where there is insufficient evidence to sustain a charge.  If the court agrees then the Judge must dismiss that charge. 

The Post Office takes extremely seriously any allegation that there may have been a miscarriage of justice. We have seen no evidence to support this allegation.   The Post Office has a continuing duty after a prosecution has concluded to disclose any information that subsequently comes to light which might undermine its prosecution  or support the case of the defendant and continues to act in compliance with that duty.

The Horizon Computer System

Horizon 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.   There have been 500,000 users of the system since it was introduced.

Nevertheless, rigorous re-investigations were undertaken into claims made by 136 mainly former postmasters that the system caused losses in their branches. 

There is overwhelming evidence that the losses complained of were caused by user actions, including in some cases deliberate dishonest conduct. The investigations have not identified any transaction caused by a technical fault in Horizon which resulted in a postmaster wrongly being held responsible for a loss of money.

There is also no evidence of transactions recorded by branches being altered through ‘remote access’ to the system.  Transactions as they are recorded by branches cannot be edited and the Panorama programme did not show anything that contradicts this.

Resolution of cases

The Post Office was approached in 2012 by a small number of largely former Postmasters and MPs with the concern that faults in the Horizon computer system had caused losses at their Post Office branches.

In response the Post Office set up an independent inquiry and, when that found nothing wrong with the system, established a scheme to enable people to put forward individual complaints, providing financial support to those making claims so that they could obtain independent professional advice.

There were 150 cases put forward, 43 of which involved criminal convictions.  

A number of the cases are now resolved, through mediation or otherwise, and the remainder of cases where the courts have not previously ruled have been put forward for mediation.

Mediation is overseen by the Centre for Effective Dispute Resolution (CEDR), an established leading and entirely independent organisation.   Those who have been offered mediation can still exercise their available rights if mediation is not successful – mediation itself doesn’t stop that.

Mediation cannot overturn a previous court ruling – only the courts can do so.

 

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Replying to Wilson Philips:
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By b.clarke
20th Aug 2015 10:56

Independence is all...

FrancoisB wrote:

In response the Post Office set up an independent inquiry ...

By definition, the Post Office CANNOT set up an independent inquiry. Only inquiry members appointed and paid by someone other than the Post Office can be truly independent.

The Post Office is in a hole - it really ought to stop digging.

 

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By oldshoremore
20th Aug 2015 12:00

Only yesterday


It was reported that scratch cards were being logged at £3 over their sale value by Horizon creating a 'theft' of £3 on every one sold.

The Eye has been on to this for years now. I know there are rogues who were prosecuted for defalcations and teeming and lading with PO cash - we had a client gaoled after openly admitting it. But you can see the point. The threats and failure to disclose evidence are serious breaches of public trust worthy of an oppressed state!

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