It has been a busy time for the NFA, with an ongoing campaign to recruit specialist permanent staff for the next stages of the organisation’s delivery, which involves refocusing activity from strategy to delivery. One of the main projects for the organisation and key discussion point at the North West Forum was Action Fraud, the national fraud reporting centre, which currently is being rolled out regionally.

In a recent report published by the NFA in December 2009 entitled ‘A Better Deal for Fraud Victims’, which surveyed the largest number of fraud victims to date in the UK, it was revealing that 91 percent of those interviewed wanted a centralised service to report fraud and receive specialist support. The report also showed that no clear path to reporting had existed, identifying over 15 agencies who would take some report of fraud.

It was for these types of reasons why the Government’s National Fraud Review 2006 specifically indicated a central point for reporting should be established. Action Fraud provides such a service. If a person suspects a fraud crime has been committed against them, they can call the Action Fraud contact centre to report where they will receive a crime number and advice. If appropriate they are referred to Victim Support for further help.

Although not every crime that is reported will be individually investigated, the information can lead to stopping fraud at its roots. The National Fraud Intelligence Bureau, based at the City of London Police collates the information reported to Action Fraud to create and provide intelligence packages to police forces to enable them to conduct investigations.

As national lead force on fraud, the City of London Police also provides training and support to other forces in fraud investigation.

In his article, Mr Jenner cited a perfect example of Action Fraud at work with the discovery of the alleged bogus clothing company through a spurt of reporting to the contact centre.

Not all of the work the NFA has carried out in its two years of existence is as public facing as Action Fraud, however, it is no less important. Initiatives with key partners to encourage data and information sharing is vital to all of the counter-fraud community’s activity, as is ensuring we have as accurate a benchmarking process as possible in place (NFA Annual Fraud Indicator) to ensure we can see the trends and know when we have succeeded.

Please visit our website http://www.attorneygeneral.gov.uk/nfa to find out more about the work of the NFA or give me a call on 020 3356 1066.

Peter Wilson
Director of Engagement
National Fraud Authority

Playing devils advocate I suspect that the po takes the hard line to make sure that postmasters are diligent in their work and are unable to pass off errors as being shoddy work by the staff etc.

I do not know all the circumstances but in my most recent case the postmaster pleaded to false accounting and was able to escape prison for theft owing to our work for the defence team. I do not think I can recall the outcome of the first case which was some time ago (I may not have been told).

Good luck

I left a long comment yesterday. Am I right in assuming it has been moderated out ??!!

regards

Steve

stevedd50@hotmail.com

However, the fact is that, as the postmasters are contractually obliged to immediately make good any shortfalls or discrepancies in the reconciliations, the post office rarely, if ever, makes any attempt to assist the postmaster when reconciliation differences are flagged up thet the postmaster is unable to resolve. They simply recover the monies directly from the postmaster’s income.

There are also some other facts about the Horizon system which undermine the absolute belief placed in the numbers and reports it produces by the post office. There are several transaction streams with NO AUDIT TRAILS whatsoever making it literally impossible for a postmaster to correct errors after they have happened because it is impossible to prove what the correct entries should have been!!!

There are also other hardware and software issues impacting on the system’s integrity which I will not go into here as these are matters which are sub-judice. I have seen the evidence myself and have also heard from ex post office trainers (people who trained subpostmasters on the Horizon system) who are scathing about its merits as a ‘system’

In theory any errors will be automatically picked up and corrected when the supporting documentation is sent to the post office’s own transactions processing centre. However it is literally IMPOSSIBLE for that to happen for transactions streams where there is no audit trail. If such a situation were allowed to arise in a private company the auditors would quite rightly give the firm an absolute rollocking

It is very easy to see why some postmasters are tempted to sign off reconciliations where they have not been able to identify reasons for a shortfall in the hope and belief that somehow the error will be identifed by the post office and automatically corrected. They do not believe they will receive any help from the post office and they will get an immediate reduction in their income and, if the ‘system’ is working error corrections will automatically regularise the numbers in the near future.

Obviously they should resist that temptation because it makes them guily of false accounting even if they have had no benefit whatsoever.

If the Horizon system really is Excel with a sophisticated front end that would worry me even further !!! Excel is a fantastic programme. However, it is very easy to misjudge formulas or enter macros which have flaws or which fall over if processing volumes exceed the capacity of the formulas and spreadsheets to process them. Prima facie I would not have thought that Excel should form the basis of the accounts processing of a business processing such massive volumes of work as the post office.

You make the point that if there was a systems flaw one would expect to see similar problems arising everywhere and not just in a small number of cases. This sounds perfectly reasonable. However, the transaction streams of different post offices can vary massively. Some transaction streams in some post offices may put massive stress on the system’s ability to process them but these streams may be absent in other post offices. One has to look at the specifics of each case.

Also, there may only be tiny flaws in the system which only arise in exceptional circumstances. However, these may well be enough to create discrepancies of a few tens of thousands of pounds in a small number of offices given that the post office as a whole is dealing with transaction streams measured in hundreds of milions, if not billions, of pounds. These flaws are immaterial to the post office as a whole but may be highly material in terms of individual post offices. Many subpostmasters careers and reputations have been ruined by the automatic assumption that they have somehow sprited monies away because there is an absolute belief in the integrity of the numbers produced by Horizon which is, in fact, missplaced.

If there is an audit trail then it should be possible to PROVE whether or not the entries being reported by the system are correct or not. The fact is that the post office is not interested in doing that analysis when unexplained differences occur because it can recover any discrepancies from the postmaster. It is also not interested in auditing the system as a system because it would be a PR disaster if flaws were found.

I understand that your forensic accounting report was from several years ago. Since then there have been unilaterally-imposed changes to the system and several transaction streams have no audit trail. I also understand that your comments only relate to the specific cases you were asked to investigate.

However, the correct way forward would be for the post office to commission an independent report into the integrity of its systems and to actually help sub postmasters with reconciliation problems rather than immediately deducting from there income often followed by criminal proceedings, ruined businesses and reputations and jail terms.

I am not condoning criminal behaviour by subpostmasters. I am saying that many have had deductions to their income, been bankrupted and even served prison sentences when in fact they have not had a penny but were simply unable to reconcile differences reported by Horizon.

A major law firm are shortly to bring a class action and I sincerely hope that the scandal of the way the post office rides roughshod over it subpostmasters is brought into the full glare of publicity.