Post Office 'failings' over cash shortfall investigations

The Post Office failed to find out why large cash shortfalls occurred at sub-post offices before starting civil and criminal proceedings against sub-postmasters, a report has found.

The independent report by forensic accountants looked into complaints by sub-postmasters of unfair sackings and wrongful convictions caused by flaws in control systems.

Concerns were raised by MPs in 2012.

The Post Office denies the conclusions of the report, which it commissioned.

People who run local sub-post offices have it written into their contract that, if the cash left at the branch does not match computer records, they must make up the difference themselves.

The Post Office say sub-postmasters make up the difference "only if they are responsible for the shortfall".

A number of MPs raised concerns that dozens of sub-postmasters had been faced with demands to pay large shortfalls - and been sacked, sued or prosecuted for theft when they could not pay.

Root cause

The Justice for Sub-postmasters Alliance (JFSA) was launched in 2009 and about 100 sub-postmasters and sub-postmistresses registered an interest in suing Post Office Ltd over its Horizon computer system, although no legal action has been started to date.

Horizon records financial transactions in branches across the UK.

The investigation by forensic accountants Second Sight found that in many cases the Post Office had failed to identify the root cause of the shortfalls before launching court proceedings against sub-postmasters.

The cash shortfalls could have been caused by criminals using malicious software, by IT systems or by human error, the report said.

The report also said that the Post Office had refused to hand over documents the accountants felt they needed to investigate properly.

Among those who claim they were wrongly accused of criminal conduct is Jo Hamilton, who used to run a sub-post office in South Warnborough, Hampshire.

She says she felt under pressure to plead guilty to false accounting but has been fighting to clear her name ever since - and feels vindicated by the report findings.

"After I'd read the report, I actually felt relieved that someone at last had put down in a document exactly what happened to us," she said.

"And they have had the same frustrations that we had trying to get paperwork out of the Post Office to help our cases, to investigate what's gone wrong."

Former Conservative MP James Arbuthnot, who has been a campaigner for the sub-postmasters affected, said the way they had been treated was an "utter disgrace".

Speaking to the BBC Radio 4's Today programme he called for a judge-led investigation into the Post Office's handling of the issue.

He said: "These have been people who have been pillars of the community and who have had their reputations dragged through the mud, who have been sent to prison, some of them.

"I understand at least one has committed suicide. They've been made bankrupt, they've had their contracts with Post Office terminated."

Mr Arbuthnot said he believed there needed to be a judge-led, independent investigation into what had happened.

'No evidence'

Responding, the Post Office said it would only start criminal proceedings against sub-postmasters if it had satisfied the Full Code Test of the Code for Crown Prosecutors, including the evidence and public interest stages.

The Post Office argued that it must equally satisfy the protocols required in civil proceedings, namely setting out "a concise statement of the facts" verified with "a statement of truth".

The Post Office said it was concerned the report "repeats complaints made by a very small number of former postmasters, as well as a number of assertions and opinions", adding that no evidence had been offered to support the claims.

A Post Office spokesman said: "Over the past three years there have been exhaustive investigations which have not found any evidence of systemic problems with the Horizon system.

"The mediation scheme was set up to address individual complaints and that is what we have gone to great lengths to do - a number are now resolved. The complaints are considered on their facts and substance."

Alan Bates, chairman of the Justice for Sub-postmasters Alliance, has previously said problems with the computer system were reported since its introduction more than a decade ago.

The Post Office said there had been 150 applications to its Complaint Review and Mediation Scheme, established two years ago, out of almost 500,000 users.