Anthony Brown -

Post Office fixes technical problem causing accounting errors in Horizon

Problem revealed during High Court trial left subpostmaster with £18,000 surplus after IT system failed to register full amount of cash scanned in

The Post Office has identified and fixed an error in its back-office system, but has warned subpostmasters to be vigilant to avoid further problems.

Computer Weekly reported last week that a subpostmaster had identified a problem where cash being accepted by the branch from the Post Office cash centre was not being properly recorded in the Horizon retail and accounting system used by subpostmasters.

The process of accepting cash, known as the REM (remittance) process, is automatic. When a branch employee scans in the barcode on a pouch of cash, it is automatically recorded in Horizon.

But the subpostmaster discovered that although £20,000 in cash – £2,000 in £5 notes and the rest a mixture of £10 and £20 notes – had been scanned in, only £2,000 appeared on Horizon. This would have left him £18,000 in surplus and the Post Office down by this amount, had he not informed the organisation.

The subpostmaster emailed the Post Office CIO after a failed attempt to sort out the problem with the Post Office helpline and its financial department in Chesterfield.

The Post Office has investigated the matter and said in a communication with its branch network: “We have traced the issue, which was occurring due to a technical timeout between systems as the pouch data transferred from our cash supply chain system into Horizon. We believe it is now fully resolved but will continue to monitor.”

The Post Office thanked the subpostmaster for alerting it to the problem and warned subpostmasters to continue to be vigilant when booking in cash.

The problem emerged during a High Court case that was examining the Horizon system’s alleged role in subpostmasters being wrongly prosecuted and fined for accounting shortfalls. The case is part of a multimillion-pound group litigation order brought by 550 subpostmasters, which has already seen two trials, with two more planned over the next year (see timeline below for full story).

During the first trial last November, which focused on the contractual relationship between subpostmasters and the Post Office, Post Office director Angela van den Bogerd said in court that the Horizon system had made mistakes which the Post Office was responsible for correcting, but admitted that it did not necessarily have to tell its subpostmaster network about the errors.

Van den Bogerd said the Post Office could have told subpostmasters about certain errors, but did not.

Mark Baker, postmaster branch secretary at the Communication Workers Union, who helped unearth the problem, said: “The Post Office had no idea about it. If the subpostmaster had done what the manual says and settle to cash, the subpostmaster could take the cash out of physical stock and keep it.

“But that would be immoral and potentially illegal, so my advice to subpostmasters is: don’t settle to cash, settle centrally.”

The plight of some subpostmasters was first reported in 2009, when Computer Weekly revealed that the lives of some had been turned upside-down after they were fined, sacked, made bankrupt or even imprisoned because of unexplained accounting shortfalls. They blamed the Horizon accounting and retail system for the problems, but the Post Office has refuted this.

Timeline of the Post Office Horizon case since Computer Weekly first reported on it in 2009

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