Paula Vennels being questioned at the Post Office Inquiry, followed by others - thread 2

wait sorry - no they wouldn’t have known about the accounting, my bad.

people at Fujitsu knew!

They're bloody lucky that nobody with a level of criminal intelligence and IT ability/access was aware of this - otherwise the doublecounting could have made somebody millions filtered off/credited 'back' but somewhere else.

To say that £10k here and there is immaterial to the post office just doesn’t stack up when the reason all this happened is because they were hellbent on ‘recovering’ these amounts, and when - for PV - getting the PO from the red into the black was her main raison d’être. And if you see the perverse glee in some of those emails, such as those about the Merthyr spm against whom they took legal action to ensure any sale of their house would revert to the PO. To say their accountants wouldn’t care about the odd £10k is contrary to everything they were doing over the whole 20 year period.

Yeah but if the joined the dots like 5 year olds - that’s mean they’d be wrong, and they’d look silly in the press. That was what the emails all eluded to, they didn’t want to be wrong and the press to make something of it - so instead they made it worse

Didnt one of the witnesses say they took the view that the false accounting had been happening all along at a certain percentage, and that this just ‘proved it’

what still amazes me is the complete absence of common sense in all this. Literally overnight a large number of postmasters and postmistress's (who are the living embodiment of the term "salt of the earth") turn gangster at exactly the same time a new and uncertain bunch of software accounting systems are introduced. A fucking five year old could join the dots on that one. Or at least question it.

Expressed in those terms it looks straightforward but things are much more complicated in practice.

And indeed, when you see the evidence unearthed in the last three days of the enquiry, it looks as though they were using this scheme to try to fob people off.

The key question is materiality - in other words, whether any errors are significant. For a small business turning over £100k, an error of £10k is definitely material. For a business the size of Post Office, with a turnover of nearly £1bn, an error of £10k is unlikely to be material.

Indeed so. It seems that you are putting a Post Office management viewpoint - they were a large business therefore these sums weren't material. For the individual Post Offices those sums were material, and were material enough for the PO to bring prosecutions. I for one, just following this scandal have seen sums of £20,000, £36,000 etc. mentioned. Has anyone computed just how much people have paid up? There were c 900 people prosecuted so I could well imagine that it would total more than a million pounds which I think could be argued was material.

And OK so if no one claims the money, the organisation can eventually clear out their suspense account and take it as profit. But as yet, although I haven't read all the documents pertaining to this, it doesn't look as though a great deal of effort, if any, was expended in finding out where the money in the suspense account came from. Perhaps it could be argued that when the SPMs were querying the amounts they supposedly owed, they were in fact making a claim on the money.

Contrary to what you might think, a business is not required to account for every single penny. The key question is materiality - in other words, whether any errors are significant. For a small business turning over £100k, an error of £10k is definitely material. For a business the size of Post Office, with a turnover of nearly £1bn, an error of £10k is unlikely to be material.

It is clearly a concern if a business has large amounts of money for which it cannot account. However, if no-one else claims the money, the business is allowed to keep it and add it to their profits. If the amounts involved are below the materiality threshold, the accountants are unlikely to question it.

However, I'm afraid that you can't keep it if the bank pays £1M into your account.

Which firm of accountants did the PO use?

The key is "When they knew" though, and this is why these people are having such astonishing lapses of memory, and when confronted by documentary evidence say that it doesn't mean what the words say.

That's fine for Alice in Wonderland, but that is fiction. This was people's lives and livelihoods.

The original sums didn't exist, they were computer generated errors.

But otherwise, I think I was asking the same thing. Once they knew that the Horizon system was generating these errors and innocent people were being forced to pay up, then to me it would appear that they were doing something criminal, they were extorting money.

I also wonder about the people who paid over sums of money but weren't prosecuted, and coerced into paying. Are they going to get compensation. They are still victims.

But they had the same money twice - they got sub postmasters to repay sums that were already sitting in the PO's own accounts. Are they just allowed to keep money they cannot account for and pay bonuses to their senior management on the basis of increased "profits"? ... then prosecuted people to make them pay twice

.... if the bank pays £1,000,000 into my account can I just keep it?

I suppose technically this counts as ‘false accounting’, which is ironic 😑

Apparently they weren’t much motivated to investigate the source of the extra money

Yes apparently they had lots of extra money they couldn’t account for so kept it for 3 years (rolling presumably) in a separate account and then absorbed it into their profits. All money from the spms.

I believe nick Wallis has written about it on his blog postofficescandal.uk.

Surely there would have been a discrepancy between the balances in the horizon system and the PO bank account. The bank account might have shown a higher amount unless I'm being a bit dense. I probably am so will wait for someone cleverer than me to explain the technicalities.

How much did the PO pay their 'clever accountants'?

Moral values seemed to be in short supply in the higher echelons of the PO.

Morally, yes. But that won't give rise to a criminal conviction.

You are only guilty of receiving the proceeds of crime if you are not the rightful owner of the money.

But at the point that they began to realise that the convictions were unsound but yet still took bonuses, would it not be questionable whether they were entitled to those bonuses?

Post Office believed the money they extracted from subpostmasters was money they legitimately owed Post Office so yes, it contributed to Post Office's profits. However, trying to make that somehow into Post Office employees being guilty of receiving the proceeds of crime won't wash. If it did, no organisation could ever recover money stolen from it. You are only guilty of receiving the proceeds of crime if you are not the rightful owner of the money.

That isn't a criminal offence. However, she could possibly face a charge of misfeasance in public office, which is similar.

One thing which has been puzzling me - the phantom missing money went into suspense accounts, which in due time the PO pocketed as profit. What happened to the money that so many SPMs actually paid over? Did that also go towards profits? The CEO and other high ranking employees' handsome bonuses were partly rewarded on the basis of profits made. In which case weren't those in receipt of bonuses guilty of receiving money gained as a result of what they supposedly believed was genuine crime?

That isn't a criminal offence. However, she could possibly face a charge of misfeasance in public office, which is similar.