Requests to check the integrity of the British Post Office’s Horizon system were not escalated, a fraud investigator has admitted, as a former colleague told the Horizon IT Inquiry that he still believes late subpostmaster William Quarm was guilty despite his exoneration.

Raymond Grant – who had to be compelled to attend the ongoing Post Office Horizon IT Inquiry – began working as a postman with Royal Mail in 1982, ultimately progressing to become a Post Office Limited (POL) fraud adviser where he testified he spent 65 to 70 per cent of his time investigating audit shortages at Post Offices around Scotland.

Grant and his team would interview suspects and collect evidence that would, if strong enough, be presented to Scotland’s Crown Office and Procurator Fiscal Service (COPFS) – which decides whether to prosecute criminal offences.

Although COPFS referrals were expected to include information whether it would support a subject’s guilt and potentially exonerate them, referrals of subpostmasters typically made no suggestion that the Horizon system was to blame.

On the contrary, investigators routinely lodged requests with Horizon operator Fujitsu for detailed ARQ system audit data “to seek reassurance that there’s nothing else that could have caused” the discrepancies, Grant said, noting that such reports “would have shown new transactions and all the other things that were not available to me from the branch statements, which was all I had.”

Although problems with the ARQ reports were known internally within Fujitsu, the reports were taken at face value in the field and Grant said he was “not aware of any instance where anybody had pointed out to me that Horizon was causing issues.”

“There was no need for us to question that, because as far as we were concerned, we were getting an expert witness from Fujitsu.”

David Grant attends the inquiry. Photo: supplied

By the time a POL restructure pushed him out in 2009 – leaving colleague Robert Daily as the only POL investigator in Scotland – Grant said that “no one had brought to my attention that there were problems with the Horizon system balancing.”

“The consensus would be that Horizon was working and functioning normally.”

Asked about reports that Fujitsu technical support operators were blaming Horizon “glitches”, Grant said, “to put it in a bland statement is not helpful…. If it’s found that the help desk was passing out that type of information to individuals, they should perhaps be reporting it in another direction so the senior management team, or their lead managers, can look at it to see if there is an issue.”

Horizon concerns were routinely ignored

Yet such escalations were often made to no avail, Daily said as he recalled requesting information about claims by late subpostmaster Peter Holmes – who died in 2015, six years before his conviction for a $89,000 (£46,049) shortfall was quashed – that Horizon had caused the problem.

And while he admitted he “cannot recall what checks were carried out in relation to Horizon at the branch, who carried out the checks, or what the results were”, Daily recalled being told that “the allegations are unfounded… checks have revealed no problems.”

Although any requests to check Horizon’s integrity would have been “disclosable” during the prosecution of Holmes, Daily admitted, such requests were not tendered as evidence during the trial and there was no evidence that his requests had gone anywhere.

“No material was disclosed in the course of the prosecution of Mr Holmes to show what checks were undertaken,” he said, “or how they were said to refute Mr Holmes’ concerns about the Horizon equipment.”

Although he “[doesn’t] recall being aware of any issues with Horizon at the time,” Daily was adamant that he had requested further information about Horizon during his investigation – noting that “I would not have put those comments in my final report if I hadn’t conducted” the request but admitting that “I don’t understand why there’s no paperwork in relation to” those checks.

Daily has subsequently been unable to obtain field notes from the case – which, he said, “would at least give me some indication of what was requested and what all those checks were.”

Wave of discrepancies

The obfuscation came amidst a time of change at POL, which was concerned about a “wave of Scottish cases” of audit discrepancies as it rolled out its new Horizon Online system – and told investigators to maximise “evidence opportunities” during their investigations and raised internal benchmarks from 40 per cent of losses recovered, to 65 per cent.

Daily “was under a lot of pressure” to investigate not only his own cases, Grant said, but those he inherited, which included Grant’s investigation into Quarm – who ran a Post Office in remote Paible, North Uist and passed away, a broken man, two years after his 2010 conviction.

Nearly 100 Scottish subpostmasters were ultimately convicted of embezzlement offences after allegations they had taken money from POL – and while those subpostmasters were formally exonerated earlier this year, Grant said he still believed that Quarm was guilty of stealing tens of thousands of pounds from the Post Office.

Quarm had other financial problems and “had made erroneous decisions, in my opinion, to use Post Office funds to support his failing business,” he said.

“He had a role to play in the loss of the money.”

Nonetheless, Grant lamented the “very, very sorry state of affairs” that had led to the Post Office scandal and the now three-year inquiry into its failings.

“The Post Office let postmasters down and they let the staff who they employed down, by being less than open and honest with information that should have been shared and wasn’t shared,” he said, adding that he was “humbly sorry” for his part in the scandal.

“The ultimate results have led to significant upset and significant difficulties for people who were left behind…. They deceived me, and they deceived an awful lot more people.”