It is the question I have probably been asked the most over the years. The long answer is in the podcast I have recorded with Mark Baker (left in the photo above), a long-serving Subpostmaster and union rep, and Ron Warmington (right in the photo above), now Chairman of Second Sight, the forensic accountancy firm that went into the Post Office in 2012 and uncovered the sort of disaster which could very well be (and was eventually proved as being) responsible for serious miscarriages of justice. Between us, we cobbled together a list of 14 different destinations, which I have listed below.

The short answer to Where Did All The Money Go is that it was either disappearing out of branches due to customer fraud or staff theft or repeated mistakes benefiting a customer OR it was disappearing out of ancillary (IT and non IT) Post Office (and non-Post Office) systems due to fraud, mistakes outside the branch and non-Horizon computer error OR it was disappearing out of Subpostmaster pockets and into the Post Office’s bottom line due to Horizon-generated discrepancies which showed up in Subpostmaster branch accounts.

It is important to remember the Post Office had no real control over its internal accounting systems for the duration of its Horizon-related prosecution spree (cf the 2013 Detica report) and so it didn’t know where money was going, nor could it properly account for where it came from. Suggesting that double-entry accounting would have revealed an obvious positive entry corresponding to an obvious negative entry assumes the Post Office systems worked and the people operating them knew what they were doing. They didn’t, and even if they did, they were not going to give any visibility of them to Subpostmasters or their legal representatives.

The really, really short answer is that any money the Post Office was credited which it couldn’t make sense of ended up one of many internal suspense accounts.

It is therefore perfectly likely that the Post Office took money which rightfully belonged to its Subpostmasters and used it to bolster its bottom line. This was part-admitted by Post Office CEO Nick Read in a parliamentary committee meeting in January 2021:

Chair: But you have to do a profit and loss account, do you not, Mr Read, with money coming in and money going out? If victims were putting money into the Post Office, surely you know that money came in from somewhere. Did it just go to your bottom line?
Nick Read: It went into a general suspense account.

What Mr Read didn’t tell the Committee was that after three years (according to one source I have spoken to), if entries in the suspense account were not identified and/or claimed, the cash was swept into the Post Office’s P&L account and counted as profit. Trebles on the back of Subpostmaster misery all round.

Have a listen to the podcast, and if it still doesn’t answer your questions, I would suggest approaching the Post Office with Freedom of Information requests. If you get a clearer answer, let me know.

Where did all the money go? The podcast list of 14 (non-exhaustive) possible destinations

1. Theft by the Subpostmaster.

Seems pretty obvious right? But why would a Subpostmaster steal their own money? Is it their own money?

2. Theft by the Subpostmaster’s staff

Same fingers-in-the-till as point 1, but important to note that the Subpostmaster would still, under the terms of their contract, be held liable for their assistants’ crimes.

3. Errors made at the counter by the Subpostmaster or one of their assistants

A customer deposits £1000, but the assistant keys in £10,000 by mistake. How easy or common was it for Horizon users to make errors at the counter, how easy were they to find and how were they resolved?

Over time, the Post Office changed its branch and Head Office operational processes to speed things up, but often, in doing that, they INCREASED the likelihood of errors that would harm their Subpostmasters. An example of this was when the Post Office phased out paying-in slips. Placing screen icons next to each other such as a banking deposit icon next to the withdraw cash icon.

4. Errors made away from the counter but within the branch

A Subpostmaster or member of staff could (for example) put the wrong amount of money in a pouch being sent back to a cash-handling centre. How was this resolved?

5. Errors made at cash-handling centres

What happens if £25,000 is recorded as being sent out to a branch and only £24,000 arrives?

6. Theft by customers

Sleight of hand, using dodgy cards or documents etc

7. Theft by non-customers

Criminals getting access to and exploiting weaknesses or loopholes somewhere in the Post Office/Horizon network. This could be external criminal gangs, or those who had infiltrated either the Post Office, Fujitsu or one of the Post Office’s corporate clients.

Could this happen, not be discovered and blamed on the Subpostmaster?

Examples of this type of loss would include thefts from ATMs and thefts carried out by employees of POL’s CLIENTS – or even by employees of Fujitsu (who we now know were routinely meddling with branch accounts without being required to keep any records showing what they’d done)… or even thefts by the Post Office’s own employees.

8. Manual account adjustment errors made remotely to Subpostmasters branch accounts by Fujitsu engineers.

An error by a Fujitsu engineer which caused a discrepancy in Subpostmaster’s branch account was documented during the civil litigation (see “The Smoking Gun“). The postmaster was then held liable for the discrepancy.

9 . Manual processing errors by the Post Office back end (eg at Chesterfield etc)

Where the Post Office or the wrong branch benefits at the expense of another branch due to errors made in manual document-handling processes.

Examples of this include credit entries – involving Post Office clients – that have found their way into Post Office Suspense Accounts and that should have, had they been properly investigated, been credited back to branches… but weren’t.

10. ’One-sided’ transactions where a customer gets something for nothing…

A communications interrupt, or a power or hardware failure prevents a payment reaching a customer’s bank account through the LINK System, but the other side of the transaction, processed through Horizon, goes though properly. This error can also benefit the Postmaster.

11. Other types of losses caused by power outages or telecommunications interrupts

These being more likely in small, remote branches… untransmitted transactions were assigned to the branch processor hard drive, to await recovery. Hard-drives were never maintained or de-fragged. Corrupt sectors on hard-drives were common. Result… transaction data would be destroyed and no trace left. Leaving the cash account either in deficit or surplus as the recovery system could find nothing to recover. Data loss can also occur at the Post Office’s data centres.

12. Processing interrupts where a Post Office client has benefited at the expense of the branch.

Transactions with corrupt data envelopes get diverted into a Post Office suspense account, but the Post Office’s processes were not robust enough to identify their origin and/or destination.

13. The Post Office benefits from Horizon’s ‘doubling up’ of apparent shortfalls.

Doubling-up was a serious problem with Horizon and appears to be have been down to some very bad coding with extreme consequences. Horizon’s ability to create money out of thin air which then becomes a subpostmaster debt was a real problem. If it happened in reverse, it would likely be written off.

14. Examples of shortages created by other bugs in Horizon.

Feel free to list any more possibilities in the comments below. And do listen to the podcast!

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