1 Monday, 27 February 2023 2 (10.00 am) 3 MS KENNEDY: Good morning, chair. 4 SIR WYN WILLIAMS: Good morning. 5 STEPHEN ROBERT GRAYSTON (sworn) 6 Questioned by MS KENNEDY 7 Q. Could you state your full name, please. 8 A. Stephen Robert Grayston. 9 Q. You should have a copy of your witness statement in 10 front of you. For the transcript that's WITN03920100. 11 Have you got that statement there? 12 A. Yes. 13 Q. If you turn to page 28, please, is that your signature 14 there? 15 A. It is, yes. 16 Q. It's dated 14 September 2022; is that right? 17 A. It is, yes. 18 Q. Is it true to the best of your knowledge and belief? 19 A. Yes, it is. 20 Q. That witness statement is now in evidence. Everything 21 I'm going to ask you is supplemental. Can I first thank 22 you for coming to give evidence to the Inquiry today. 23 Your statement covers a variety of issues but 24 today I'm going to focus on Phase 3 issues. But if we 25 could start by talking about your background, you 1 1 started working for the Post Office as part of the Royal 2 Mail Group in January 1986; is that right? 3 A. Correct, yes. 4 Q. You left the Post Office when the Royal Mail Group split 5 in April 2012 -- 6 A. Yes. 7 Q. -- is that right? And you have worked a variety of IT 8 jobs since then? 9 A. Yes. 10 Q. In 1995 you were appointed as a manager in the BA POCL 11 programme; is that right? 12 A. Correct, yes. 13 Q. What did that involve initially? 14 A. The first role that I had was to support the evaluation 15 of potential partners/suppliers for the scope of the 16 programme and my particular role was to look at support 17 service proposals. 18 Q. How did that change over time? 19 A. So as the programme moved forward into its next phase, 20 I moved into the implementation team and then did 21 various work in the implementation team, probably most 22 significantly was around -- in office migration. 23 Q. I believe you were involved in the acceptance process; 24 is that right? 25 A. I was, yes. 2 1 Q. The Inquiry's heard a great deal of evidence about the 2 acceptance process so I'm not going to take you through 3 all of that, but at the time Horizon was rolled out did 4 you believe the system was robust? 5 A. Yes. There were bugs, there were defects that had been 6 captured and listed, but fundamentally my understanding 7 was that the system was working and producing figures 8 and outputs that were consistent with transactions and 9 the inputs that the system was receiving. 10 Q. You mentioned that you were aware of bugs, errors and 11 defects. What were some of the issues that you were 12 aware of prior to rollout or prior to the acceptance? 13 A. I think within the material that I'd been sent there was 14 various reports coming out of testing on what the 15 results of running various scripts, et cetera, were 16 showing and, you know, as in any programme that I've 17 been involved in, you know, the good part is that these 18 things are being flushed out, that they're being 19 understood and they then need to be fixed. 20 So, you know, the follow-on from that is an 21 evaluation as to the seriousness, either individually or 22 as a consolidated group, of those defects that are 23 arising as a result of testing. So there comes a point 24 where you evaluate whether to move forward because what 25 remains to be fixed is deemed to be not significant, or 3 1 you hold and fix all the things that need to be fixed. 2 Q. Were you aware at that time about issues with EPOS, the 3 electronic point of sale? 4 A. Sorry, what -- depends -- what do you mean by issues? 5 Q. Well, problems, that that had been a persistent issue 6 and that Post Office felt that that needed to be 7 actioned by Pathway in order to correct it or to ensure 8 the data integrity of the transactions that were being 9 shown? 10 A. From the material that I've been sent, I've seen 11 reference to advice about rewriting EPOSS completely. 12 That was not something I was aware of. That there were 13 concerns over fundamental issues, no, I can't -- you 14 know -- no, because, as a -- effectively, on the 15 operational side, working with the regions, the 16 IP areas, it was our job to make sure that we had 17 something that was being implemented that was 18 trustworthy. 19 Q. And it was trustworthy at the time of rollout in your 20 mind? 21 A. Yes, yes. 22 Q. If we could turn up our first document, please, 23 POL00028441, I'm just going to take you to this. 24 This is a Christmas Horizon Research Report that 25 was carried out in January 2000. Were you aware of this 4 1 at the time? 2 A. I believe I saw a copy of this, yes. 3 Q. What did you think of it at the time; do you remember? 4 A. To some extent it wasn't a surprise. If you have 5 60,000 users and then you have -- you know, and that's 6 at the front end, front office, and then you have users 7 in the back office, that they struggle to understand and 8 use the system would be expected from some users, yes. 9 Q. If we could turn over on to the next page, please -- 10 sorry, the next page again, yes -- we can see that this 11 is appendix 2, which contains some verbatim comments 12 from subpostmasters. Just to be clear, you saw the 13 report and also this appendix at the time or ...? 14 A. I can't be absolutely certain but I would have expected 15 to see it, yes. 16 Q. If we could turn to page 15, please, and we can scroll 17 down. The Inquiry's been through this report before but 18 just for your benefit there's a section entitled "Not 19 enough training on balancing" and we see there some of 20 the comments: 21 "Training for accounting was very bad. Balancing 22 took hours to sort out, and was kept up until midnight 23 sometimes. Tried to call helpdesk but it was always 24 almost engaged. But needed for time on balancing. The 25 1st day was all right, but the quality of the training 5 1 was not good on the 2nd day." 2 Further down: 3 "They didn't inform us very much on cash 4 accounts." 5 So there's quite a lot of feedback, I'm not going 6 to take you through it all, but it sets out that people 7 were quite frustrated at the amount of time that was 8 being spent on training on balancing. Would you accept 9 that? 10 A. Yes. 11 Q. Is that something -- you mentioned a moment ago that you 12 would expect a certain level of difficulty or people to 13 find things difficult to a certain degree. Is this in 14 line with what you would have expected? 15 A. I think my expectation is a generalisation in terms of 16 the change curve. You know, when you ask people who 17 have worked in a certain way for a long time to change 18 the way that they are working then some will struggle 19 and some will adopt the change very easily. 20 I think, though, you know, in this particular 21 point, what was being referenced is that the training 22 itself wasn't good enough. So irrespective of the 23 general point of people struggling with adopting to the 24 requirement for change, the training itself should be 25 adequate to allow people to operate the system. 6 1 Q. If we turn to page 19, please, and scrolling down we can 2 see one section entitled "I'm not computer literate". 3 So a moment ago you were talking about people who 4 were used to working in a certain way. This shows the 5 level that some people were at in terms of their base 6 level of computing, doesn't it? 7 A. Yes, yes. 8 Q. We can see that some people describe it as: 9 "It was frightening. We were thrown in at the 10 deep end and it was very unsettling. It was 11 particularly difficult for those who had no previous 12 experience with computers. They did not take account of 13 our needs." 14 And: 15 "I am not a computer person, I was put with people 16 who had used them and with people who worked in head 17 post office. I did not need half the information given 18 it was a waste of time when there was other things 19 I needed --total confusion in the end." 20 So the Post Office were expecting people to go 21 from not using computers at all in their day-to-day work 22 to being across quite a complex system; would you accept 23 that? 24 A. Yes. I -- you know -- yes, yes. 25 Q. It's fair to say, isn't it, that some postmasters at the 7 1 beginning struggled to use the system? 2 A. Yes. 3 Q. Would you accept that if someone finds a system 4 particularly difficult to use, they are more likely to 5 make errors when inputting the data that's held on that 6 system? Would that be right? 7 A. I think that's fair. You know, it takes longer. People 8 who don't have the understanding -- you know, even if 9 there's a helpdesk, there's the call out for support, 10 but there is the risk of error, yes. Yes. 11 Q. If we could take that document down, please, and turn to 12 NFSP00000513, please. 13 This is a report of the National Executive Council 14 of the NFSP in March 2001. Now, you wouldn't have been 15 at that meeting but there's just one point that I wanted 16 to take you to. 17 If we could turn to page 15, please, and scrolling 18 down, please. 19 So this is a Mr Peberdy, who the Inquiry has 20 already heard from. It's him making a report to the 21 meeting. He says: 22 "Mr Peberdy reported that these problems are still 23 being highlighted [this is polling problems] and just 24 recently had been circulated and reported on the 25 problems in organising meetings with the business but 8 1 now monthly meetings had been scheduled and there had 2 been a meeting on the 26th February 2001 from which 3 could be seen from the Action Points, there were 4 28 items that required action, some of them the business 5 still had to come back to them on. 6 "Amongst it one was to set up the two day meeting, 7 a separate meeting on Losses and Gains Policy, 8 a separate group to bring in the Horizon problems. 9 There had been stories about the problems that had been 10 created by Horizon, shortages, Horizon was not doing 11 things, the problem with losses having to be made good 12 immediately, and all the things about Suspense Accounts. 13 He reported that he wanted a group to examine this. He 14 had been led to understand that there was £10 million in 15 Suspense Accounts now as opposed to about £2 million 16 18 months ago. Another feature of the system was that 17 it highlighted everything." 18 So looking at that, it appears that after Horizon 19 was introduced the money held in a suspense account went 20 from 2 million to 10 million; is that right? 21 A. In terms of what I see on the screen and what Mr Peberdy 22 reported, yes, I mean, I heard this -- I can't remember 23 the context in which I heard the same point but the 24 point about Suspense Account and the amount going from 25 2 million to 10 million was something that came up in 9 1 a conversation somewhere. I recognise that, yes. 2 Q. You recognised that, that -- a conversation around this 3 time, March 2001? 4 A. I can't say with any certainty of a specific date but, 5 you know, that would be, I guess, roughly, yes, it would 6 be appropriate. 7 Q. That conversation, I appreciate you've said you don't 8 really remember but was it something that members of 9 your team or you were particularly concerned about at 10 the time? 11 A. Yes, because that is a fivefold increase, and as 12 I understood it there was analysis going on. I mean, 13 I think there was -- and I think Mr Peberdy states that, 14 you know, everything was being flushed out and I think 15 that was the context in which I heard, you know, the 16 increase from 2 million to 10 million, that everything 17 was being flushed out. 18 But that didn't explain, doesn't explain, you 19 know, what is going on. So I understood that there was 20 some analysis on this going on. 21 Q. What do you mean by everything being flushed out? 22 A. Well, because the Horizon System had been implemented 23 and therefore data was flowing through the system -- it 24 wasn't manual -- the information that was being received 25 in finance through what was being reported as in 10 1 suspense was much more visible, whereas before, for 2 whatever reason, it wasn't that number. 3 Q. What does that increase from 2 million to 10 million 4 suggest to you? 5 A. Well, it suggests that there are errors that are being 6 posted to suspense that need to be looked at. You know, 7 what -- my first question is: what has caused the 8 posting to suspense of a fivefold increase? You know, 9 it doesn't seem to make a lot of sense. 10 Q. What do you think the reason was? 11 A. I don't know. I honestly don't know. I mean, the 12 analysis was going on and speculation on my part was not 13 going to help because I wasn't close to the detail, 14 neither was I expected to be, you know, involved in the 15 analysis or close to the detail. But there were other 16 people with the right level of knowledge that you would 17 expect were looking at this and examining it. 18 Q. What were they saying about this? What was their 19 theory? 20 A. I didn't see -- I didn't see any follow-up. You know, 21 as I say, the context in which I heard this, you know, 22 I'm comfortable in saying that I recognise that comment, 23 but I didn't see any follow-up that said, you know, 24 "This is the result of our analysis, you don't need to 25 worry", et cetera, et cetera. But that Mr Peberdy had 11 1 seen it, you know, there were others that understood it, 2 and I expect there would have been a report somewhere 3 stating what the cause was and what was happening. 4 Q. But even though you were aware of this fact, you didn't 5 check to see what the outcome of that was? 6 A. No, I didn't, no. 7 Q. Does this not seem like quite an important point? 8 A. It seems like an important point, yes. I mean, it -- 9 looking at it now, yes, it seems like something that 10 should have been clearly understood and articulated back 11 through the programme, so that the programme could then 12 articulate what was going on back to the relevant 13 business stakeholders. 14 What I can't -- having said that, what I can't say 15 to you is that there may well have been a strand that 16 had done the analysis and had reported back to various 17 stakeholders. You know, in my world it disappeared. 18 Q. Moving forward in time then to the IMPACT programme, you 19 were change management lead on IMPACT; is that right? 20 A. Correct, yes. 21 Q. What did that involve? 22 A. So it involves understanding, effectively understanding 23 the nature of the change. So what was the business 24 intention? What was being changed by business unit, 25 whether it's finance or operations or audit? So what 12 1 was changing process, what was changing system, and, 2 having done the gap analysis between what people did 3 today and what they would be expected to do tomorrow, to 4 work on training and processes to enable people to move 5 from one state to the future state. In the area that 6 the changes were -- had the highest level of impact, for 7 example, in areas in finance, organisational design 8 would come into it because you may have people exiting 9 the organisation and new skills and new people coming 10 into the organisation, and, depending on the scope of 11 business change -- and I can't quite remember but 12 there's also the point about communication. So, you 13 know, communicating to stakeholders as well. 14 Q. From what you've said it doesn't sound like you were 15 involved in the primary decision making in terms of what 16 it would actually involve. Your role was to do with 17 carrying out the changes that other people had decided 18 upon; is that fair? 19 A. Yes, I mean, the documents that I was sent were, you 20 know, clearly laid out in terms of business strategy and 21 what -- the reasoning behind the IMPACT programme, yes. 22 Q. You set out what you understood the purposes of the 23 IMPACT programme to be in your witness statement. 24 If we could pull that up at WITN03920100, and if 25 we turn to page 20, please. 13 1 Looking at paragraph 52, scrolling down, it says: 2 "I believe that the IMPACT Programme was driven by 3 the need to simplify and update many backend legacy 4 systems to improve efficiency, accuracy, and lower 5 operational costs. At the front end, in offices, the 6 Programme also introduced the capability for Smart Card 7 transactions and changed the Suspense Account process 8 from manual to an automated process. The Releases also 9 introduced various other changes to the Horizon System 10 that were related to either products or service 11 improvements." 12 So is that how you understood the purpose of the 13 project, this programme? 14 A. That's my reflection now. I might have been able to 15 give you a more detailed statement a few years ago but, 16 yes. 17 Q. Did you hear the evidence of Mr Philip Boardman? 18 A. I think I did. It was only a few days ago, wasn't it? 19 Q. Yes. He told the Inquiry that part of the 20 simplification process that IMPACT envisaged was so that 21 debt would be more visible. Do you agree with that? 22 A. Debt would be more visible ... In the sense of the 23 suspense account? In what context was ...? 24 Q. Was simplifying things so that it's more obvious what 25 debt is owing by either the subpostmasters or by 14 1 clients. 2 A. Yes. I mean, the -- you know, in my understanding, you 3 know, part of the reasoning was to ensure that data was 4 generated accurately at the counter, that it was 5 harvested into the finance systems accurately, and then 6 passed to clients accurately and in a timely manner. 7 I think in the legacy world -- and, you know, I'm 8 not an expert on the legacy systems by any stretch -- 9 but there were timing discrepancies that would arise. 10 So, you know, one of the things about simplification and 11 the use of, you know, the new systems was to increase 12 speed, accuracy -- yes. 13 Q. Yes. Summarising that, I suppose, is do you agree that 14 part of the reason for the programme was that the 15 Post Office felt that cash was going missing? 16 A. Yes, yes. 17 Q. Was that a big driver? 18 A. It wasn't -- it was definitely a driver. I mean, 19 I think there was reference to, you know, remittances, 20 for example, into branches, you know, that were -- where 21 leakage or loss was being experienced. So, you know, 22 if, as a process, you can automate remittances and 23 tighten up that process, then you're reducing the risk 24 of loss or leakage. So, yes, it was definitely a driver 25 of the programme. 15 1 Q. If we could turn up POL00038870, this is the accounting 2 and cash management programme conceptual design, and if 3 we scroll down, we can see your name is not on the list 4 as programme manager or a design authority, but you 5 would have seen this document at the time? 6 A. At the time of the conceptual design -- sorry, can you 7 just give me the date? 8 Q. Yes. So if we scroll over, I think this is the date -- 9 if we scroll over on to page 5, we can see that the 10 document history is September 2003, if we scroll down to 11 the bottom. 12 A. Yes, I mean, I think at that point I would have expected 13 to see it, yes. 14 Q. If we could turn to page 14 of that document, please, 15 and scrolling down, please, we can see at 3.2.2 the "Key 16 Priorities" in this context, and it says: 17 "2 fundamental changes have made Post Office 18 Limited's funding position a critical business survival 19 issue: 20 "- The business is trading at a loss 21 "- The migration of benefits to ACT will be 22 accompanied by the loss of pre-funding by government 23 departments of the necessary cash in the network. 24 "The business now has to borrow funds to fund its 25 trading losses and to fund working capital needed in 16 1 branches. Such borrowing is limited in availability and 2 its cost add to the trading loss. From April 2003 DTI 3 [Department of Trade] will provide a loan and I will 4 require a robust statement of cash holding as security." 5 So at that time the Post Office was trading at 6 a loss and in a pretty dire financial situation; is that 7 right? 8 A. Yes, as far as I was aware, yes. Yes. 9 Q. Could you help us with, at the time was that something 10 that was troubling people or worrying people? Was that 11 something that people felt had to be actioned quickly? 12 A. Well, it had been troubling. If I could just focus on 13 the second point, you know, in 1995 the point about ACT 14 was already recognised and the threat that benefits 15 payment by ACT represented. So for a number of years, 16 through Horizon, IMPACT and then the Post Office Card 17 Account programme, this threat to Post Office and the 18 financial position had first of all been recognised but 19 then had materialised. 20 Q. So there was a need to bring in cash; is that right? 21 A. There was a need because the payment of pensions and 22 allowances was the significant product or service that 23 was offered by post offices, without being able to 24 replace -- if that business was lost, without being able 25 to replace it, then the Post Office's position would 17 1 become worse financially, yes. 2 Q. So it needed cash? 3 A. Yes. 4 Q. Part of IMPACT was automating the part of the accounting 5 process that had previously been conducted in 6 Chesterfield, the error reconciliation; is that right? 7 There were a number -- 300 people in Chesterfield who 8 were carrying out checking processes? 9 A. Yes, it was a -- like a big paper factory, yes. Yes. 10 Q. So part of what was envisaged was the reduction of those 11 costs and move to automation; is that right? 12 A. Correct and that's -- when I talked about organisational 13 redesign, that would have been, yes, one of the areas. 14 Q. Most of the people who were based at Chesterfield doing 15 that job of checking, they would have been removed 16 essentially after IMPACT or cut down severely? 17 A. Yes. 18 Q. Would you accept that part of the IMPACT programme 19 envisaged the shift of responsibility from that team to 20 identify errors, to the subpostmaster to identify the 21 errors in the branch? 22 A. I think there's perhaps two parts to it. I think 23 part one would have been that the introduction of the 24 systems should have exposed errors quickly, which would 25 have resulted in automated error notices being generated 18 1 back to offices more quickly. But the onus would be on 2 the people in the Post Office, the office manager or 3 subpostmaster, yes, to understand how an error had 4 occurred if their account was not balancing. 5 Q. Or identify the error before it's put in, because they 6 are the people who are putting in -- manually -- the 7 processes and handling it on a day-to-day basis, isn't 8 that right? 9 A. They are certainly handling transactions on a day-to-day 10 basis, yes. 11 Q. So they would be the ones, in the first instance, who 12 are responsible for identifying those errors; correct? 13 A. Yes. 14 Q. At this stage was the reliability of Horizon taken as 15 a given? 16 A. The fundamental Horizon System and its ability to 17 accurately represent figures through transactions and 18 represent those into the back end systems, yes. There 19 were still individual issues or defects that, you know, 20 needed to be fixed, you know, as a matter of -- in my 21 experience as a matter of course that you will 22 inevitably always find some defect even if you've gone 23 through extensive testing. But something will always 24 turn up. It's the seriousness of what turns up that 25 needs to be assessed and that's why we had NBSC and the 19 1 HSHD. 2 Q. So the way of double checking it -- so you, in the first 3 instance, have the subpostmaster, but then the secondary 4 role is those helplines, the NBSC and the HSH; is that 5 what you're saying? 6 A. Yes. I mean, you know, they are absolutely 7 fundamental -- absolutely fundamental -- from early in 8 the programme, that people are contacting, you know, the 9 Helpdesk, creating the view of the data that then has 10 professional people analysing what the story is behind 11 what is being reported. 12 Q. But that's always going to be limited, isn't it, because 13 the people on the helpline aren't in the branch with the 14 person on the ground, isn't it? They are going to have 15 to go off what they can see on the system, potentially, 16 and what the subpostmaster tells them; isn't that right? 17 A. Correct. But if there is a recurring theme in calls 18 coming in -- you know, users -- people express 19 themselves in different ways, and if there is an art in 20 it, it's to understand and articulate into the Helpdesk 21 system what the problem is and what the proposed 22 rectification is. But what you would expect is that 23 with recurring issues there is action taken, even if 24 it's not a system issue. So it may be that, you know, 25 training itself or a note needs to go out to branches to 20 1 say, you know, "We have received concerns from 2 subpostmasters over this type of transaction. Please be 3 aware, you know, to take this particular action." 4 So it doesn't necessarily always have to be 5 system-driven but the analysis is critical, yes. 6 Q. But at this time did you think back to what we've been 7 discussing, about the value of money in the suspense 8 account, and think, "Oh, I wonder if someone bottomed 9 out", and why that money had gone from 2 million to 10 10 million? 11 A. No, I didn't. 12 Q. Do you think that that would have been something, with 13 the benefit of hindsight, you should have done? 14 A. With the benefit of hindsight, yes. 15 Q. If we could turn to the next document, POL00038878, 16 please. So this is the another document to do with 17 conceptual design. This is "Branch Trading Reporting, 18 Management and Control and Transaction Management. 19 Conceptual Design". Again, would this have been the 20 kind of thing that you would have seen at the time? 21 A. Yes. I mean, there would have been a lot of documents 22 being circulated talking about design, and I can see 23 from the contribution that different areas of the 24 business were obviously contributing to that view. 25 Q. Can you explain what you mean by that. 21 1 A. Well, I think, from -- from my recollection, I mean, in 2 there it looks like there's audit, there's obviously 3 finance, investigations team. 4 Q. Could you just -- I think you are going through the 5 names of contributors. Could you just tell us the name 6 of the person and the field that they are speaking to. 7 A. Tony, Tony Utting, I think would have been representing 8 investigation or auditing in that area. Ann Clarke was 9 an expert in the processes within Chesterfield. 10 Karen Hillsden I think had been involved in the 11 conceptual design, and Gareth Jenkins obviously was 12 there from ICL Pathway. 13 Q. Did you know Gareth Jenkins? 14 A. No, I didn't, but I've seen his name a few times on 15 various documents, yes. 16 Q. Did you know him by reputation at the time? 17 A. No. You know, I know he was an architect or the senior 18 architect. You know, the -- my interface with the 19 architect team primarily would have been Torstein, and 20 I think it was Torstein that probably had the most 21 conversation with Gareth. 22 Q. That's Torstein Godeseth? 23 A. Yes, yes. 24 Q. If we could turn to page 13 of this document, please, 25 and we scroll down, we can see again recorded as some of 22 1 the key -- or the "Key Priorities" of the IMPACT 2 programme, which state: 3 "Make the identification of debt easier 4 "Reduce the amount of reconciliation required 5 "Increase the amount of debt recovered 6 "Put the emphasis on clients and customers to 7 validate the data 8 "Simplify branch processes by reducing the amount 9 of paper 10 "Centralise/consolidate agents debt 11 "Enable matching of cash at branches with 12 settlement with client." 13 Those are consistent with some of the things we 14 have been talking about, aren't they? 15 A. Yes. 16 Q. If we look further down at "Business Drivers/Issues", it 17 states: 18 "Re-focus on Debt Recovery (financial recovery of 19 money), target 95%." 20 Do you know what that would have been referring 21 to? 22 A. Well, I -- my assessment of that is that where losses 23 had occurred, then it was the recovery of the monies 24 associated with those losses or discrepancies, and 25 primarily I guess that would have been focused on the 23 1 branch. 2 Q. The subpostmasters or branch staff? 3 A. Yeah, yes. 4 Q. When it says in the second bullet point, "Only 10% of 5 discrepancies are actually debt", what would that have 6 meant? 7 A. My interpretation of that is that -- I think I mentioned 8 timing discrepancies previously. I think that, you 9 know, one of the challenges with the legacy systems was 10 to remove what looked like debt, it wasn't actually debt 11 it was just the timing of cut-offs in systems when data 12 was provided to other systems and that was subsequently 13 resolved. 14 Q. So it's a timing issue rather than -- can you just 15 explain that again. 16 A. I can explain my understanding. So my understanding is 17 that if at the point that data is sent to, for example, 18 a client that data from the front office, under the 19 legacy world, may not have reached the central system, 20 so there may be that money had been taken in but 21 wasn't -- the data wasn't represented back to the client 22 in a timely manner, and that might represent debt in 23 certain circumstances. 24 Q. In the majority of circumstances or ...? 25 A. Well, I mean, it says only 10 per cent of the 24 1 discrepancies are actually debt. So, you know, as 2 I say, my interpretation of that point, as I'm sitting 3 here today, is I can relate it to timing. 90 per cent 4 seems a high number but I didn't work in the back end in 5 Chesterfield in finance, so, you know, that could well 6 be accurate, yes. 7 Q. If we look at the bottom of Business Drivers/Issues", it 8 says: 9 "Accounting and settlement on our data, not 10 clients." 11 A. Yes. 12 Q. So when it says "our data" that basically means the 13 Horizon data; is that right? 14 A. Yes and, you know, it's a challenge that I've come up 15 against, you know, in other programmes where settlement 16 on client data versus the data that you have in-house 17 leads to lots of questions, yes. 18 Q. So from this the Horizon data is becoming all the more 19 important, isn't it? 20 A. Absolutely. 21 Q. It's the start and end of the matter -- 22 A. Yes. 23 Q. -- as regards settlement with clients; is that right? 24 A. Absolutely. If you want your clients to settle on your 25 data, then your data has to be good. 25 1 Q. So all of this is predicated on the idea that, to use 2 your words, the Horizon data is good? 3 A. Yes. 4 Q. Because without that, none of this works? 5 A. Yes. Yes, it raises too many questions. 6 Q. If we could turn to page 15 of that document, please. 7 SIR WYN WILLIAMS: Before we do that, could I just 8 understand the word "client". 9 Mr Grayston, do you understand client to include 10 subpostmasters or are we talking about third parties 11 whose products are being sold in post offices? 12 A. Third parties, sir. 13 SIR WYN WILLIAMS: Right. So where we see in this list 14 "Accounting and settlement on our data, not clients", 15 you would agree that does not refer to subpostmasters? 16 A. Correct. 17 SIR WYN WILLIAMS: Okay. 18 MS KENNEDY: If we could turn over the page, please, to 15, 19 and scroll down, and down again, looking at 20 paragraph 12 -- just down a bit further, thank you -- it 21 states: 22 "By the end of a monthly trading period, branches 23 should be required to make good discrepancies between 24 Horizon generated cash and stock positions and the 25 actual physical position determined by branch office 26 1 staff. To help facilitate this, existing Horizon 2 facilities that permit branch staff to post cash 3 discrepancies to a cash suspense account will be 4 removed. Remaining branch suspense accounts should only 5 be used following prior to authorisation via Post Office 6 central processes and will be restricted to use by 7 branch staff with Horizon manager/supervisor roles." 8 Is that in accordance with your understanding of 9 what was to happen? 10 A. Yes. 11 Q. It goes on to -- I mean, essentially what it is saying 12 here is the suspense account is going to be removed, 13 effectively, which is where subpostmasters previously 14 posted discrepancies; isn't it right? 15 A. Yes, the ability -- yes, I mean, the ability to post to 16 suspense lay with a subpostmaster, or the Crown Office 17 branch manager should they choose. Under the changes, 18 that facility was no longer going to be there. It was 19 being closed down. 20 Q. At the time this programme was being developed, was 21 there a perception that subpostmasters were using the 22 suspense account to hide money that they couldn't 23 account for or had stolen? 24 A. Yes. 25 Q. How prevalent -- unpacking that a bit, was it generally 27 1 the perception that subpostmasters were using it to hide 2 amounts they'd stolen? 3 A. In my experience -- because prior to joining the 4 programme I had been with Royal Mail Group 5 investigations -- there were instances where 6 subpostmasters wished to use an amount of money for 7 other purposes, not -- not with the intention of theft 8 or permanently deprive, but wanted to or needed to use 9 it for other purposes. So it was a facility or an 10 opportunity, should someone so wish, to undertake 11 something short-term using Post Office cash. 12 There were instances, I believe, where it involved 13 theft, and, you know, I'm sure there's a lot of analysis 14 within Post Office on the types of cases, the numbers of 15 cases, the amounts involved that, you know, were 16 regularly discussed at a post office management level. 17 Q. You mentioned using the money for short-term purposes. 18 A. Yes. 19 Q. That's not something that they were allowed to do, 20 though, was it, to use that money in the suspense 21 account for short-term purposes? 22 A. No, no. 23 Q. So that's something equally Post Office would want to 24 clamp down on and didn't want to continue? 25 A. Yes, but it's -- I was distinguishing between somebody 28 1 who perhaps was -- you know, or was stealing and 2 somebody who was -- was -- been in need of an amount of 3 money but it was not with the intention of keeping that 4 money. 5 Q. But in both cases Post Office didn't want them to be -- 6 well, they certainly didn't want them to be stealing but 7 they also didn't want them to use that money for those 8 purposes either -- 9 A. Well, it was Post Office money not the private business 10 side money, yes. 11 Q. Over the page, the document goes on to explain that 12 suspense account can be cleared in several different 13 ways, and that includes cash or transaction, the 14 subpostmaster paying for -- out of their salary or 15 credit card. 16 I mean, in the IMPACT programme there was no 17 provision here to challenge the sum owing on Horizon 18 itself, was there? 19 A. I think when the Horizon produced a position then the -- 20 you know, my understanding was that there was an 21 opportunity to challenge but it wasn't, you know, 22 through the system necessarily, it would have been 23 through your retail line manager, maybe a call to the 24 Horizon System Helpdesk saying that, you know, "This has 25 happened, I don't know why". But that was the process 29 1 about making good was -- was what was agreed, yes. 2 Q. So there was nothing on the system itself. What you've 3 just described involves phoning the helpline but not on 4 the system itself, you wouldn't dispute? 5 A. Yes. 6 Q. If we could turn to page 18 of that document, please, 7 and scrolling down and looking at "Legal & Regulatory", 8 it says: 9 "It will be verified that branch processes and 10 reporting changes meet legal and regulatory financial 11 reporting constraints (eg auditors) to ensure that there 12 is sufficient information from the new system to support 13 regulatory reporting, litigation and criminal 14 prosecution." 15 Was the ability to prosecute subpostmasters under 16 the criminal justice system a key driver or a key factor 17 in the IMPACT programme? 18 A. I think with any system, if you looked back to Ecco or 19 Ecco+, which was in Crown offices, that the same 20 statement would, I expect, apply, i.e. that the system 21 produces data which is trustworthy to the extent that it 22 can be used to support, if necessary, a criminal 23 prosecution, yes. 24 Q. In your mind at this time, how important was it within 25 the Post Office to have the ability to prosecute 30 1 subpostmasters? 2 A. I actually think at this point in time, if anything, it 3 was diminishing. You know, the -- the prosecution of an 4 individual, you know, that Post Office went through was 5 not, you know, a cheap -- it was expensive and -- but on 6 the other side, you know, it was the deterrent effect as 7 well. 8 Q. So the deterrent effect was still important even if you 9 felt that prosecutions themselves were becoming less 10 important; is that what you're saying? 11 A. Well, resolving in some appropriate way was absolutely 12 important. If a situation was so significant and 13 serious that prosecution was merited, then, you know, 14 prosecution was appropriate. But, yeah -- so it is 15 important, though, that if that is the step that you 16 take, that the data on which you are basing your 17 decision is robust, is accurate. 18 Q. If we could turn to page 70 of this document, please. 19 In fact if we could go back over the page to page 69 and 20 scrolling down, just so you can see the context of what 21 I am asking you about. This is in the context of 22 "Discrepancy Management", and it mentions: 23 "1. Receive Automated Message 24 "2. Handle Transaction Corrections." 25 We can see there the "Receive Automated Message" 31 1 section. 2 If we go over the page, I wanted to ask you about 3 handling transaction corrections. So you can see there 4 the description says: 5 "This is the mechanism for Processing the 6 Transaction Correction by the branch." 7 It says: 8 "Trigger: User Initiated 9 "Automation: There will be a button for 10 Transaction Correction Management within the menu 11 hierarchy which is only accessible by users with the 12 appropriate role. This will provide the user with 13 a list of the unprocessed Transaction Corrections, 14 displayed in date/time order. Having selected the 15 Transaction Correction to process, the system will 16 display text making clear what will happen when they 17 select any of the options presented. For each 18 Transaction Correction the user will have up to three 19 options - Each option, when selected, will perform an 20 identified set of transactions, defined within the 21 Transaction Correction (which may include an option to 22 Do Nothing - requesting further investigation). 23 "Should the Transaction Corrections fail 24 validation, then an error is displayed to the user with 25 a request to contact NBSC. The Transaction Correction 32 1 will be marked as complete, but no change will have been 2 made to the local system." 3 What type of situation does this envisage or how 4 would this work? 5 A. To be honest, I'm not quite sure. I'd have to take that 6 away and have a long hard look at that. 7 Q. That's fine, thank you. 8 Turning then to our next document, if we could 9 turn up POL00038909, please. We can see here "IMPACT 10 Programme S80 Migration Strategy". Could you explain 11 what is the document is and how it came about. 12 A. The -- well, a migration strategy would define how you 13 move from what you have or where you are to where you 14 want to be and, in that sense, you know, I'd need to see 15 the rest of the document as to what the scope was. 16 Q. We know it refers to the S80. 17 A. Yes. 18 Q. If we could just look at your witness statement -- and 19 that's WITN03920100, please -- and if we can look at 20 page 23 and looking at paragraph 57 it says: 21 "Within the scope of the S80 Release changes were 22 introduced that moved office accounting away from weekly 23 Cash Account production to Trading Periods and also 24 introduced an automated process to manage Unclaimed 25 Payments and Uncharged Receipts that existed as the 33 1 office level Suspense Account. Up until the S80 Release 2 errors made by office in transacting business had been 3 dealt with through a paper process that required office 4 managers to post details (enter details) of the Error 5 Notices into the Suspense Account; S80 introduced an 6 automated posting process." 7 So can you explain and clarify further what the 8 S80 did? 9 A. In the sense of this particular point, my understanding, 10 if I'm remembering it correctly, was that error 11 correction was a manual process. We talked before about 12 the factory and all the people working on pieces of 13 paper. Well, those people working on those pieces of 14 paper would turn up errors and that would generate 15 a paper error notice, which then would need to be posted 16 back to the branch that made the error. 17 Now, if things were working well, the branch -- 18 because this may be sometime later -- the branch would 19 already have recognised in the accounting period that an 20 error had been made, so when the error notice came in it 21 was a contra-entry in suspense to the error that had 22 already been recognised, if everything was -- 23 Q. If everything was working properly? 24 A. -- going great. The S80, or IMPACT, introduced an 25 automated process. So on the basis that data was being 34 1 generated into the systems and, at the back end, the 2 ability for those systems to process the data, that any 3 discrepancies could then be posted automatically -- 4 recognised automatically and posted automatically, is my 5 very simple, simple way of understanding it. 6 Q. So the S80 was an important release for making that 7 fundamental -- I mean, it's quite a fundamental change, 8 isn't it? 9 A. It is a fundamental change, yes. 10 Q. If we could turn back to that document that we were on 11 before, which is POL00038909, please, if we turn to 12 page 6, we can see the date of this document which is -- 13 the updated draft for discussion is 21 June 2004, and 14 this is for discussion in the Design Authority. What is 15 that? 16 A. The Design Authority were effectively the people that 17 had analysed and thought through conceptually what 18 IMPACT was about, and then it had been broken down into 19 constituent parts and the Design Authority, or my 20 interpretation of a Design Authority's job, is to 21 protect the design. As you may appreciate, the world is 22 not standing still as this programme is taking place, so 23 there are always new changes, maybe product changes, new 24 products, challenges to the design coming in, and it is 25 the job of the Design Authority to -- that effectively 35 1 owns the requirements to make sure that the design 2 remains consistent and gives a view on CR, change 3 requests. 4 Q. If we could look at page 30 of that document, and 5 scrolling down slightly, the "Roles and 6 Responsibilities" section, it says: 7 "The responsibility for leading the detailed 8 migration analysis lies with the Impact Business Change 9 team - primarily Steve Grayston (Business Change 10 Manager), Ann Clark (Back End), Ben Gildersleve 11 (Counter), and Mark Kirton (Implementation)." 12 So that was your business change team; is that 13 right? 14 A. I think it was wider than that but, given that the 15 highest level of IMPACT was back end, so Ann Clarke, and 16 at counter, Ben, yes. 17 Q. You would work with these people to carry through the 18 changes that had been designed; is that right? 19 A. Yes. I mean, the -- fundamentally, you know, the 20 conceptual design needs to be understood. For example, 21 you know, counter, if you took counter, the front 22 office, you need to understand what is changing. So 23 what is expected, what needs to be done, in terms of 24 process, eventually, so that you can define the right 25 level of procedural documentation and the right level of 36 1 training, and that behind that there is the right level 2 of understanding in the support desk to support the 3 people when this change is going through. 4 You know, there's also, as part of that, an 5 evaluation of what is needed at the point of migration 6 from what happens today to what needs to happen 7 tomorrow. 8 Q. If we could turn to page 20 of this document, please. 9 Scrolling down it says: 10 "Preparation to Implement POL_FS." 11 And it says: 12 "The following activities are required ..." 13 And lists a number of activities in terms of 14 hardware and software implementation. 15 Scrolling down, it says: 16 "In POL-FS activities must be undertaken to load 17 the start of the financial year opening balances from 18 CBDB ..." 19 What does that mean? 20 A. Counters business database. 21 Q. "... into POL-FS." 22 And POL-FS is? 23 A. That's SAP, I believe. 24 Q. "This is in addition to any identified previous year 25 closing balances and movements that need to be put into 37 1 POL-FS to create the correct starting position. 2 "There is also an activity to address the position 3 of the suspense accounts both centrally and locally 4 particularly as the current 'unknown items' option will 5 no longer be available to the branch. An exercise to 6 cleanse suspense accounts in advance of implementing 7 POL-FS is envisaged." 8 So this is the process of cleansing the suspense 9 accounts to move forward with the plan; is that right? 10 A. Yes. I think "cleanse" -- my understanding in terms of 11 the use of this term is it was envisaged that operations 12 team, so the line management operationally, and the 13 subpostmasters would be encouraged to deal with items in 14 suspense. Because items were sitting in suspense, 15 I believe, sometimes for an extended period of time. 16 Q. That document can come down, thank you. 17 Do you think the suspense account was removed 18 because the Post Office desperately needed the money in 19 the suspense accounts? 20 A. No, I don't believe that was a primary driver for 21 closing the suspense account. To me, it was an 22 appropriate action to take if you were running true 23 end-to-end processing. You didn't need or you shouldn't 24 need the ability to manually post into an office's 25 accounting position. So I don't believe it was 38 1 a primary driver. 2 Q. Not a primary driver but do you think it was a factor? 3 A. Well, I think, you know, if it was envisaged -- and 4 I can't say I'd have saw it anywhere, that it was 5 envisaged that, as a result of IMPACT being implemented, 6 that there would be a, you know, significant inflow of 7 funds, I -- you know, possibly in somebody's mind 8 somewhere that might have been a factor. But I can't 9 say I saw that. 10 Q. I want to ask you some questions about feedback from 11 subpostmasters. You talk in your witness statement 12 about feedback being obtained. 13 A. Yes. 14 Q. If we could turn up WITN0392100, please, and if we could 15 turn to page 23. Looking that bottom of that page, at 16 paragraph 60, it says: 17 "Whilst I am unable to reference specific notes, 18 or documents, I can confirm that user feedback was 19 important to the IMPACT Programme team and that feedback 20 would have been taken on board and acted upon where 21 appropriate. The feedback would have included comment 22 on User Interface such as screen workflow, colours, 23 positioning on screen, understanding of language used in 24 instructions. There would also have been feedback 25 gleaned from users interacting with the testing team 39 1 with the aim of reducing the risk of errors. Whilst 2 I cannot provide any specific example I am sure that not 3 all user feedback was accepted; for example if a user 4 disagreed with a fundamental aspect of the concept, the 5 business design, I believe that the overall business 6 benefit to POL would have been the over-riding 7 necessity." 8 Could you explain a bit more about what you mean 9 by that. 10 A. Yes. The high level design and the conceptual design of 11 what Post Office was attempting to achieve, was setting 12 out to achieve, was signed off and agreed, and agreed 13 between Post Office management and I believe with 14 relevant stakeholder groups. 15 Inevitably you get people who will actually 16 disagree and challenge the fundamental conceptual 17 design. And, you know, that's -- here is one example. 18 It happened to me in other programmes. 19 But, you know, what I take from that is that it's 20 about explaining the benefits of the programme overall 21 because, in isolation, somebody may be sitting there 22 being asked to do something different and not 23 understanding or realising the benefit to the 24 organisation as an overall factor. 25 So, you know, that's where people would express 40 1 their views, but that feedback would not necessarily be 2 taken on board. However, what should be taken on board 3 is that if there is a fundamental lack of understanding 4 why this is being done, what the benefit is overall to 5 the organisation, then, you know, business change should 6 reinforce the reasons behind why the change is 7 happening. 8 Q. So if a subpostmaster said, "I don't agree with the fact 9 that suspense account is going to be removed", that's 10 not something that would have been taken on board, 11 because it's fundamental to the programme itself and the 12 design of it; is that right? 13 A. It is. But I would expect, out of, you know, courtesy 14 and the appropriate professionalism that, you know, 15 a rounded response would be given to the person who'd 16 raised the point. 17 Q. But it couldn't be changed? The IMPACT programme was 18 what it was fundamentally, and feedback could be sought 19 on more peripheral or user-based things such as the 20 interface; is that right? 21 A. Yes. 22 Q. If we could turn up POL00038986, please. This is the 23 IMPACT programme implementation plan for the 24 S80 release. Can you help us with what this document 25 is. 41 1 A. Well, I would expect it to include all the details of 2 how S80 would have been implemented, as it says, at 3 a high level. I'm not sure what the detail is after 4 that. 5 Q. The difference between an implementation plan and 6 a migration plan? 7 A. Yes. Well, migration is part of the overall 8 implementation. 9 Q. Okay. But they are two distinct things; you would 10 expect to have separate plans for them, would you? 11 A. Yes, I would expect the overall implementation plan to 12 highlight the migration perspective and then, as you 13 drill down into detail, that you get a migration plan 14 and processes, et cetera, as you go into further levels 15 of detail. 16 Q. We can see here that you are a reviewer of this 17 document. 18 A. Yes. 19 Q. So as a reviewer, does that mean that you would have had 20 input into it or you would have had a look at it at the 21 time before it was finalised? How would that have 22 worked? 23 A. Yes. As a reviewer, yes, I was expected and required to 24 provide feedback from a business change perspective and, 25 you know, I think it's always important that the people 42 1 who are reviewing documents like this understand the 2 scope of their review because S80 was complex. 3 So we can all make comments about some of the 4 technical aspects but if the technical aspect is not 5 your domain, those comments wouldn't necessarily, you 6 know, carry any weight. 7 Q. If we could turn to page 6, please, we can see there in 8 the introduction it says: 9 "The purpose of this document is to provide 10 visibility and understanding to the IMPACT programme and 11 relevant BAU domains ..." 12 "BAU"? 13 A. Business as usual. 14 Q. "... of a high level business implementation plan for BT 15 and POL-FS and the main activities for the initial 16 pre-implementation stage. This document is largely 17 derived from the migration strategy and meetings held 18 with the business area representatives. It outlines the 19 high level implementation approach that will govern and 20 guide a lower level BT and POL-FS implementation plan." 21 If we move to page 7, scope, it says: 22 "The high level plan scope includes ..." 23 So when it talks about the "high level plan", 24 these are the things that are going to happen as a kind 25 of headline point; is that right? 43 1 A. Yes, yes. 2 Q. And we can see it sets out a number of things that are 3 going to happen, and if we look at paragraph 9, it says: 4 "Distribution of materials to branches and the 5 NBSC, including training and operational instructions." 6 Number 10: 7 "Development of branch error scenarios and scripts 8 for the NBSC." 9 Number 12: 10 "Training of NBSC in types of calls and changes 11 to BT." 12 After IMPACT and after the S80 release, the NBSC 13 was going to be extreme important, wasn't it? 14 A. Yes, NBSC was extremely important. 15 Q. Before but even more so after these changes? 16 A. At any release and any change, there is a curve of 17 increased volume calls, et cetera. So, yes, the support 18 services, the support desks, should expect to receive an 19 increased volume of calls, yes. 20 Q. But over and above, surely, what you would normally 21 expect with a release because, as we were previously 22 discussing, this is now the way that you can dispute 23 what Horizon is showing you, right? 24 A. Yes. 25 Q. So on the long-term you would expect not just a peak 44 1 after the release but a peak going onwards, wouldn't 2 you? 3 A. Correct. I mean, that's part of the volumetric analysis 4 that is undertaken for support services. You know, what 5 is the baseline position, how is that baseline likely to 6 change, and what is the curve or what is the BAU wave of 7 increased calls likely to look like? 8 Q. Do you remember that being something that was considered 9 or thought about carefully at the time? 10 A. I believe it was, yes. 11 Q. Do you think that, all things considered, the IMPACT 12 programme was a success in that it met its objectives? 13 A. I don't remember seeing a closure report. I might be 14 wrong about this, but I can't recall seeing a closure 15 report or closure analysis. But in terms of the points 16 that you have gone through and the implementation that 17 took place, I believe it was -- you know, it achieved 18 what it set out to achieve at the headline level. 19 Q. Did you investigate with the NBSC what the impact of the 20 IMPACT programme was or how those calls increased over 21 time? 22 A. I think, you know, the approach -- which, you know, as 23 far as I'm concerned is a standard approach -- is that 24 the implementation takes place and there is a handover 25 at each branch or from the programme to business as 45 1 usual, and NBSC in the early stages is supported by the 2 programme. So, yes, we would have been looking at or 3 should have been looking at the calls being raised with 4 NBSC and the Horizon System Helpdesk. There should be 5 analysis going on to see if there is an improvement 6 required in training or communication or what are we 7 seeing, yes. 8 Q. At this time, were you aware that Fujitsu were able to 9 access the data generated by the counter remotely and 10 input into it? 11 A. No, and I -- you know, this is something that, you know, 12 I've seen referenced, but at the time, no. To me, it 13 just seems troubling. Perhaps there was a full -- there 14 is a full audit log but giving somebody access to the 15 back end to inject data, you know, I would be very 16 uncomfortable with that. 17 Q. If you had known that at the time, how would that have 18 impacted on your view of how appropriate it was to place 19 such stock on Horizon data? 20 A. Well, it would be extremely concerning. You know, you 21 cannot -- I mean, I don't -- if there is a -- I've not 22 seen the reasoning behind it, so if there is 23 justification behind it and there is visibility and it 24 is auditable and it is clearly articulated as a record 25 somewhere of what was done, who did it and why, then 46 1 there may be a legitimate business reason. But sitting 2 here, knowing what I know, it doesn't sound appropriate. 3 MS KENNEDY: Thank you, Mr Grayston. Those are all my 4 questions. 5 I'm just turning to see if any of the Core 6 Participants have questions. I can see Mr Stein does. 7 MR STEIN: Sir, there's a matter that has been brought to my 8 attention in an email that I would like to take some 9 instructions on. It is now 11.15. I wonder whether 10 I could use this time and ask for 20 minutes to have 11 a break. 12 SIR WYN WILLIAMS: Yes, certainly. 13 MR STEIN: It may be I will have no questions but I just 14 want to make sure. 15 SIR WYN WILLIAMS: That's fine. 16 Is anyone else intending to ask any questions, 17 just so that I know? 18 MS KENNEDY: Yes, Ms Patrick and Ms Page. 19 SIR WYN WILLIAMS: So what is it now? 11.15 or thereabouts? 20 MS KENNEDY: Yes. 11.30? 21 SIR WYN WILLIAMS: 11.30, Mr Stein, unless you send 22 a message that you need a little longer, all right? 23 MR STEIN: Thank you, sir. 24 MS KENNEDY: Thank you, sir. 25 (11.16 am) 47 1 (A short break) 2 (11.30 am) 3 MS KENNEDY: Thank you, chair. I believe Mr Stein has some 4 questions. 5 Questioned by MR STEIN 6 MR STEIN: Sir, very grateful for the time. It allowed me 7 just a couple of minutes to gather my thoughts and take 8 instructions. 9 Mr Grayston, I represent a large number of 10 subpostmasters and mistresses. I've only got couple of 11 questions that relate to your evidence you have given 12 today. 13 You've spoken to Ms Kennedy about the branch 14 suspense accounts and about the IMPACT programme that 15 then, as a result of that programme, removed the 16 suspense accounts, okay. You have also discussed with 17 Ms Kennedy the fact that at one stage within the branch 18 suspense accounts that it reached a surprising amount of 19 money, it went up to about 10 million. Okay? 20 Now, help us, first of all, with what you believe 21 that £10 million in those branch suspense accounts 22 meant. What did it represent? 23 A. I wasn't sure. The context of knowing about this 24 2 million to 10 million is unclear to me. It wasn't -- 25 it didn't come to me formally but somewhere it came up. 48 1 Now, for it to go from 2 million to 10 million in 2 suspense means that there's errors that were being 3 posted to suspense. Now, I don't know what those errors 4 were but that -- the purpose -- my understanding was 5 analysis was ongoing. 6 Q. When you say "errors" -- if we can just tease this out 7 gently, when you say "errors" do you mean errors within 8 the Horizon System, errors being made by, in your mind, 9 subpostmasters and mistresses, other reasons to account 10 for and lead to errors and shortfalls? 11 A. Any or all of those, yes. 12 Q. Just pursuing this as far as we can, you've answered 13 Ms Kennedy's questions about this, but what was done 14 that you can recall now to look into the difference -- 15 those different possibilities? 16 A. I do not know. That's the position. 17 Q. All right. Can we then look at the flip side, which is 18 this: we reached the stage whereby the IMPACT programme 19 suggests that the ability to put the error or the 20 shortfall into the branch suspense accounts was 21 eliminated. Now, what happened to that money? Now, 22 it's not real money or is it? 23 A. Sorry, which money? 24 Q. The 10 million in the suspense accounts. Now, is that 25 real money in your mind or is it notional money? 49 1 A. Well, if I refer back to a document that Ms Kennedy 2 showed me, when she talked about 10 per cent being real 3 debt, it could be that some of that 10 million was 4 related to discrepancies or potential debt arising from 5 timing discrepancies in -- as data flowed through the 6 system. 7 Q. Right. That's 10 per cent? 8 A. Well, I don't know. That's one possible constituent of 9 10 million. 10 Q. That's leaving 9 million. The other 9 million -- 11 A. No, I think it's the other way round. I think it's -- 12 if 10 per cent is debt and 90 per cent is timing, 13 then -- 14 Q. I see. So when this branch account -- when this ability 15 for the branches to put money into the suspense accounts 16 was eliminated, what happened within the accounting 17 system of POL to that figure? It can't just be 18 eliminated, can it? 19 A. Well, it can't just be eliminated, but the purpose of, 20 you know, where finance is, if that is an amount of 21 money that is deemed owed, or debt, then the analysis 22 must show what has caused -- what is it that's causing 23 it. It won't be -- I'm positive that it won't be one 24 single factor, there will probably be a number of 25 factors involved in it and finance would then seek to 50 1 deal with each of those factors, is the way that I would 2 expect it to be approached. 3 Q. The way that you're speaking about this is with 4 considerable amount of caveat. You're saying that, 5 first of all, you accepted a point made by Ms Kennedy as 6 to the possible makeup of the money, the 10 million. 7 A. Yes. 8 Q. Secondly, you believe that the finance will have dealt 9 with it. Do you have any actual direct knowledge of 10 what happened? 11 A. No, I don't, I don't. I'm sorry. 12 Q. So is one possibility that the subpostmasters and 13 mistresses were pursued for that amount of money as 14 debt? 15 A. Yes. It's a possibility, yes. 16 MR STEIN: Excuse me for one second. 17 Thank you, sir. 18 Questioned by MS PAGE 19 MS PAGE: Just a few short questions from me. It's 20 Flora Page, also representing some of the 21 subpostmasters. 22 You've told us in your statement that you weren't 23 able to sort of put your hand on any particular user 24 feedback although you know some was created. I can take 25 you to that if you like but -- 51 1 A. Yes. 2 Q. Yes? Do you have any idea of why it's not been possible 3 to locate that at this stage? 4 A. No. But, you know, all I can say is that there should 5 have been a document library and an archive created that 6 contains the full set of documents relating to the 7 impact from start to finish, business change included. 8 Q. Would that document library have potentially included 9 records of board papers or anything of that nature? 10 A. Yes. 11 Q. Possibly even records of important meetings at which it 12 was discussed? 13 A. Yes. You know, it's standard practice that, you know, 14 a document library is created and then held, you know, 15 for a considerable period of time. 16 Q. So it's slightly unusual, is it, that we find ourselves 17 in a situation where we've got some papers but we don't 18 seem to have any meeting notes, we don't seem to have 19 any of your user feedback, in other words that what 20 we've got is rather patchy? 21 A. Yes. I think that's -- you know, although there's 22 a long period of time between today and what we're 23 talking about, you know, it's unfortunate that there 24 isn't the record there to help the conversation that 25 we're having. 52 1 Q. Thank you. 2 You've mentioned that you think that there should 3 have been -- whether there was or not we don't know, but 4 there should have been something of a report into this 5 fivefold increase in the suspense accounts. Who do you 6 think would have been responsible for that? 7 A. It would sit in finance, with the finance team, to 8 understand, investigate, analyse and produce appropriate 9 outputs. 10 Q. So perhaps Graham Corbett sitting at the top of that? 11 A. Yes. I can't -- you know, I can't remember the names, 12 the particular names, at this point in time, but, you 13 know, senior finance managers and, in particular, those 14 that worked with the suspense account, yes. 15 Q. Yes. Then you've told us also that you would envisage 16 a report into the types and numbers of criminal 17 prosecutions for discussion at Post Office management 18 level. Again where would the responsibility for that 19 sit and what managers would you have envisaged having 20 those sort of discussions? 21 A. Well, the investigation team, as a function, was at one 22 point in time with Royal Mail Group, but then each of 23 the businesses took on investigation in-house by taking 24 some people from Group. So there was an investigation 25 team. In terms of organisational structure I'm not sure 53 1 whether the investigation team for Post Office Counters 2 would have sat in finance or separately somewhere in 3 operations, but, you know, if you were looking at 4 weaknesses in your systems which are resulting in 5 investigations taking place, then there is analysis that 6 takes place at a national level to understand how many, 7 what time, what amounts, so that it gives you the 8 opportunity to close out and take rectification steps 9 where, you know, there are weaknesses. 10 Q. Did you ever see a document of that nature? 11 A. Not -- no. Maybe in the early '90s, at a group level, 12 because, of course, when you're looking at the situation 13 in the businesses, you do need to understand what's 14 going on in terms of investigations. 15 Q. But you don't believe you saw one during the period that 16 the IMPACT programme was being developed -- 17 A. Certainly not, no. 18 Q. No. But you believe one should have been done or 19 something along those lines? 20 A. I can only say that I would expect that the people 21 involved in that would be doing that. They should be 22 doing that, yes. 23 Q. Just finally, you have very fairly acknowledged that the 24 IMPACT programme required Horizon cash account data to 25 be reliable and, of course, we know now that it wasn't 54 1 in a very large number of cases, perhaps not by any 2 means a majority but a significant number of cases. 3 Looking back, do you think that as S80 was 4 designed and created, alongside it, and perhaps not 5 fully intentionally but certainly at some stage 6 intentionally, there was a sort of development of a myth 7 that Horizon cash account data was absolutely reliable? 8 A. Myth ... I think business decisions have to be based on 9 an understanding that what is coming out of the system 10 is accurate and reliable. If at a management level 11 there is a suspicion that it may be flawed in some way 12 then that causes or should cause, you know, a lot of 13 thought and creation. 14 Myth -- I'm not sure about "myth" but ... 15 Q. If there was perhaps an unwillingness to sort of 16 investigate those possibilities? 17 A. Yes, I think -- you know, this is something that, having 18 listened to some of the testimony, you know, they -- 19 stepping back and looking at what's going on, making use 20 of the various types of different view or data that 21 would exist in the business, may have helped. I don't 22 know if that took place or not. But, having heard what 23 I've heard, you know, in the lead up to being here 24 today, you would expect there to be some stepping back 25 and looking. 55 1 MS PAGE: Thank you. Those are my questions. 2 Examined by MS PATRICK 3 MS PATRICK: Good morning, Mr Grayston. My name is 4 Angela Patrick and again I act with Mr Moloney and 5 Hudgell Solicitors for another group of subpostmasters. 6 I don't have a lot of questions for you but 7 Ms Kennedy has asked you a number of questions about 8 your involvement in Horizon during the development 9 stages, testing and acceptance, and during the rollout. 10 I don't want to go back quite that far but I want to 11 look and ask a few questions about the end of the 12 rollout, so before IMPACT. 13 A. Right. 14 Q. I want to look at two documents and ask a few questions 15 about them. First is POL00104602. 16 Can you see that, Mr Grayston? 17 A. Yes, yes. 18 Q. We can see that it's an email headed "Electronic memo", 19 from Dawn Howe to Keith Baines, sent on 20 6 September 2000. Can you see that? 21 A. Yes, I can, yes. 22 Q. It's headed "Horizon NRO Close Down Reporting". 23 "NRO", would that be national rollout? 24 A. It would, yes. 25 Q. If we scroll down a little -- we don't need to look at 56 1 the substance of that email but we can see it's got 2 a second email attached to the bottom part of that, and 3 that's an email from Don Grey copied to a number of 4 people including, I think, yourself. You can see 5 Steve Grayston there; would that be you? 6 A. Yes. 7 Q. This was one that was sent on 5 September 2000, and we 8 can see again same title but it says "Initial draft for 9 comment please ... confirm requirements within NRO 10 Board". 11 So this is a document being sent to you for 12 comment; is that fair? 13 A. Yes. 14 Q. If we can go over the page we can see what the document 15 is, and we can see: 16 "This paper documents the process to be adopted by 17 the Horizon Implementation Team to close the ... 18 National Roll Out project. 19 "... Issued for initial comment." 20 So were you being asked here to comment on the 21 plans for close down reporting, so -- or how the close 22 down reporting for the end of the rollout project was to 23 be conducted? 24 A. Yes, it was put together by Don Grey and, at that point 25 in time, I think I was working for Douglas and part of 57 1 Don Grey's team, yes. 2 Q. So you were part of the Horizon Implementation Team for 3 the rollout? 4 A. Yes. 5 Q. Yes, and involved in conducting the review or part of 6 it? 7 A. Yes. 8 Q. Thank you. This may be very basic but this was how the 9 Post Office was proposing to learn any pertinent lessons 10 they could from how the rollout had gone? 11 A. I'm not sure in terms of scope whether it talked about 12 lessons learnt. I mean, I'd need to sort of have a look 13 at more of the document, but yes, I mean, it should 14 refer back to lessons learned and, you know, 15 opportunities for improvement, et cetera. 16 Q. We don't need to go into the detail of this document 17 because it's planning for how the review would be 18 conducted. I'd like to look at the second document that 19 I'd like to ask some questions about, and it's 20 POL00104482, please. 21 We don't have a cover email for this but I can see 22 on the top right-hand side, can you see that, 23 Mr Grayston, there's a date? 24 A. Yes. 25 Q. And it says "Draft", and it seems to be 5 April 2001. 58 1 So this is some time on from the initial email. 2 A. Yes. 3 Q. The heading is "Project Implementation Review -- Horizon 4 National Roll Out". 5 Is it likely this was a draft of the review that 6 you may have seen for your input? 7 A. I don't know. Documents -- there should be one -- or 8 I would expect one report that Don was pulling together. 9 There may be different takes on material in that report 10 for different audiences. 11 Q. If we can turn to page 10 -- and there are appendices or 12 annexes to this document, but if we look at page 10 to 13 start with it may help with your memory. We can see 14 appendix A is "Post Implementation Review of Field 15 Management", and if we scroll to the bottom of that page 16 there's a distribution list, which you aren't on, but if 17 we can scroll over to page 13, there's an 18 acknowledgments list at bullet point 2. 19 We can see there the second paragraph main 20 contributors include Don Grey, Douglas Craik, 21 Steve Grayston. So is it likely that you would have 22 been a contributor to at least part of this review 23 process? 24 A. Yes, I mean, clearly from paragraph 1 what you have got 25 is inputs from the field teams, the four field teams, 59 1 and the management of those four field teams. 2 I recognise all those names. Paragraph 2 is the head 3 office team, yes. 4 Q. Okay. As you said, there are some things that would 5 have been within your domain, others that wouldn't, but 6 you may have been involved in reviewing different 7 documents. You said that to Ms Kennedy earlier. 8 A. Yes. 9 Q. I don't propose to go through all of this document. 10 There are two issues I want to look at to see if you can 11 help the Inquiry. Whether you have seen it or not it 12 may refresh your memory if we look at it as we go 13 through. 14 If we turn to page 5, the first issue that 15 I wanted to ask some questions about arises there. We 16 can see there's a heading there headed bullet 5, and it 17 says "Performance - Operational." 18 Can you see that, Mr Grayston? 19 A. Yes. 20 Q. I want to scroll down to the sixth bullet point -- 21 sorry, the sixth point on that page, I apologise. It's 22 "Performance - Technical". It's actually the next 23 section down. Thank you for your patience. 24 We can see the section there reads: 25 "Technical oversight and validation of ICL Pathway 60 1 activities was almost non-existent compared with the 2 preceding live trial and development phase. Although 3 this was not really a problem it is an area that should 4 not be overlooked either in the Horizon maintenance 5 phase or in future projects." 6 I think you can see immediately below there it 7 says a full lessons learned report was going to be at 8 appendix A, which we just looked at, and appendix B. 9 If we turn down to page 6, please, we can see some 10 recommendations there, and 9.1 is headed "Supplier 11 issues", and I want to look at bullet point 2, which 12 reads, if we read it together: 13 "We should never again put ourselves in the 14 position of dependence on either a sole supplier (or, 15 indeed, supplier dominated project progress information) 16 without first establishing a defined and adequate 17 contingency. At the outset we should assure customer 18 pre-eminence with any future supplier who must commit to 19 identify, agree and deliver to our requirements 20 including detailed performance metrics and integrated 21 reporting structures. Furthermore, any future supplier 22 must empower their local field teams to mirror the 23 responsibilities we invest in our people." 24 Then if we can look at the third bullet it says: 25 "Improving the way we manage our chosen supplier; 61 1 having more than one route without proper technical 2 backup can make us look both unprofessional and 3 vulnerable." 4 I simply want to ask -- I don't know if this 5 refreshes your memory of this at all but can you recall 6 at the time this review at the end of the rollout was 7 being conducted, was there a recognition within POL that 8 POL had been very reliant on Fujitsu in the development 9 and also during the rollout of Horizon? 10 A. Well, in terms of what you've shown me and the comment 11 that you have referred me to, this was about 12 implementation, not about Horizon more generally. So on 13 the point that I think is being made here in 14 recommendations, ICL Pathway had subcontracted various 15 pieces of work to different organisations and that led 16 to difficulties through -- and challenges through the 17 implementation. 18 In terms of, I think, your question, which I think 19 is wider, the reliance on ICL Pathway, yes, Post Office 20 Limited -- Counters Limited was reliant on ICL Pathway 21 understanding the nature of their role and executing it 22 appropriately and I think -- sorry, I just add to that, 23 I think you've already seen, and I've seen in the 24 material, concerns over visibility and openness and the 25 nature of the contract and the limitations of the 62 1 contract. 2 So yes, I mean, I think this particular point was 3 about implementation. I understand it. I do remember 4 it. 5 Q. I just go back to that phrase that was used on page 5. 6 We don't need to turn it back up again, but: 7 "Technical oversight and validation of ICL Pathway 8 activities was almost non-existent compared with the 9 preceding live trial and development phase. 10 A. Yes. 11 Q. Whether it's implementation or not, the conversation 12 there is about technical oversight and validation -- 13 A. Of implementation. 14 Q. -- being non-existent. Then there's a reflection, 15 continuing on, on "Improving the way we manage our 16 chosen supplier", and I think that's forward looking for 17 new projects, but can you recall if there was any 18 concrete plan for change in the relationship between POL 19 and Fujitsu to improve technical oversight and 20 validation going forward? 21 A. Well, the technical oversight and validation was around 22 the steps that were required to undertake 23 implementation, which was effectively, you know, 24 a migration to the new world and so, to answer your 25 question, no, because there would not be another 63 1 technical rollout or implementation of a similar type 2 with ICL Pathway. That activity had been done. 3 However, for Post Office's purposes, you know, 4 should we be working with another supplier (and we had 5 a large banking programme, Post Office Card Account, for 6 example), that the learning point about how we manage 7 implementation, those points should be taken on board 8 for future programmes. 9 Q. Of course, I think you were continuing to work with 10 ICL Pathway, and thereafter Fujitsu, on what we start 11 calling the "business as usual" operation of Horizon. 12 A. Yes. 13 Q. And any other projects connected with Horizon that would 14 be conducted by Pathway and then Fujitsu; is that fair? 15 A. Correct, yes. 16 Q. I'm going to leave that point and go to the second point 17 and it's to look at some of the detail in the lessons 18 learned in this document. 19 If we could turn to page 30 to start, there are 20 a few points I'd like to look at to see if they are 21 consistent with your recollection of the review at the 22 end of rollout. If we look at appendix B and we start 23 at the bottom of this page, page 30, what I want to look 24 at runs over the page on to page 31. If we can see the 25 very last paragraph: 64 1 "The overall strategy towards training was not in 2 tune with the contractual relationship that exists 3 between Post Office network and subpostmasters. The 4 requirement for subpostmasters and their assistants to 5 be pass a PSA (Personal Standard Assessment) after 6 training caused some inconsistent anomalies within the 7 network in terms of offices reaching the minimum 8 training compliance to enable migration to be completed. 9 The lack of a proactive approach by Territories in this 10 area. Detailed information on PSA failures and 11 provision of training material from ICL Pathway have 12 exacerbated the problem." 13 On training, you've said a little to Ms Kennedy 14 already this morning about your recollection of 15 training. Is that something consistent with your 16 recollection of concerns around training during the 17 rollout? 18 A. Well, even prior to rollout -- first of all, you know, 19 training was part of the programme that I think the 20 Inquiry's heard from one of my colleagues, Trevor 21 Rollason. But, as a team, head office or regional, we 22 were getting feedback on what was, you know, the 23 struggle. 24 Yes. I mean, I think the work done pre-rollout to 25 improve training, which was AI 218 I think, was seen as 65 1 extremely helpful. But nevertheless, with a user 2 population so large, there were people who could not 3 cope with Horizon and they failed a test that had been 4 introduced to assess competency. 5 Q. We see just the paragraph below that one. It continues: 6 "The policy for 'out-of-hours' transactions is at 7 best a stop gap. There are [key] client and account 8 team issues that need to be addressed." 9 This was being written in maybe 2001 at the end of 10 the rollout. Can you recall what the key client and 11 account team issues that still needed to be addressed 12 were? 13 A. No. It would have been clear at the time but 14 out-of-hours transactions were used on occasions for 15 certain product types but I can't remember, in the 16 context of what's said here, what the implication was. 17 Q. Okay. If we can go down to page 32, please, and I want 18 to look at bullet point 3.4, please. Can you see that, 19 Mr Grayston? 20 A. Yes. 21 Q. Thank you. You can see there -- I don't want to look 22 that whole thing but the third paragraph down there is 23 an entry which says: 24 "Cash account training was not comprehensive 25 enough within the training delivered by ICL Pathway. 66 1 The training delivered by ICL Pathway was poor in terms 2 of the instructors had little or no knowledge of 3 Post Office procedures." 4 Again, just to be absolutely clear, is that 5 consistent with your recollection as to the conclusions 6 of the Post Office at the end of rollout in 2001? 7 A. Yes, although looking at it today I think that there 8 probably would need to be a reflection on what was done 9 to boost that training but, you know, if I looked at it 10 in a different way, Peritas (I think that was their name 11 at one point in time) who had been appointed to run the 12 training, didn't have a Post Office background, didn't 13 understand all of the processes associated with it. So 14 for Peritas, or the supplier of training, to come in and 15 run good training courses, even with time and good 16 material, was again, I think, a learning curve on their 17 side. 18 I think there was a reflection that the cash 19 account training wasn't comprehensive enough and, 20 through AI 218 and the negotiation that I think Bruce 21 McNiven was involved in, that was improved. That was 22 improved. 23 Q. But this AI 218 takes us to acceptance and rollout which 24 starts in January 2000. This is being drafted in 25 May 2001. 67 1 A. Yes. 2 Q. It's being recorded here that the training on the cash 3 account had not been comprehensive enough. Was that, in 4 your recollection, the view of Post Office in May 2001? 5 A. Sorry, I wasn't clear. I think in my mind this 6 reflection should have had two elements to it that it 7 absolutely wasn't and that there was an intervention as 8 a result of AI 218 that had improved things. It does 9 not say that here and your interpretation, you know, is 10 reasonable from what is said here. 11 But the quality of the training that was given, I 12 believe was deemed to be adequate and the reason I say 13 that is that there were four implementation teams 14 nationally, and the head office team had worked with the 15 regional teams through the lifetime of this programme, 16 and the regional teams represented the business 17 operations around the country and also reflected the 18 needs of the programme in implementing in the various 19 parts of the country. 20 If that feeling as expressed here was so black and 21 white, then it would have been stopped. The regional 22 management of Post Office Counters Limited would have 23 stepped in. So I think -- in my mind, you know, I am 24 taking an interpretation that it wasn't good enough and 25 it improved. There was nothing coming out from the 68 1 implementation teams or regional management that said 2 every week this training is not could enough, it is not 3 good enough. So you know that's my thought on this. 4 Q. But that's not reflected in the draft that we have here? 5 A. As I say, your interpretation of what's said here, yes. 6 Q. If we can go over to 3.6, which is over the page on 7 page 33, it might help elaborate on this thinking. 8 Can you see that now, Mr Grayston? I think it's 9 come up. At point 3 6, which deals with pre and post Go 10 Live support -- 11 A. Yes. 12 Q. -- and it says: 13 "More in-depth training for those people who 14 supported second, third and fourth balance support 15 especially around suspense account entries. The 16 scheduling of Retail Network Manager was not consistent 17 with instances of more than one arriving at an office to 18 offer support. The allocation of support for balances 19 worked better when the scheduling was undertaken by the 20 cluster groups. Offices were given the impression that 21 they would have a trained person with them for the first 22 balance, far too many did not have anyone leaving them 23 to 'flounder' with an inadequate balancing guide." 24 If we scroll down further to 3.8, 3.8 deals with 25 the documentation given to subpostmasters and it says: 69 1 "In the latter stages of the project changes 2 arising from revised documentation have been deployed 3 before the documentation had been signed off. 4 Operational instructions and balancing guides were 5 excellent, the quick reference cards poor as were the 6 arrangements for CSR+. The distribution of 7 documentation on the whole was poor with a number of 8 offices receiving their balancing guides well after 9 their Go Live." 10 It goes on that the diagrams in the Horizon user 11 guide were not well accepted as it contained too many 12 flow charts, and it says some more about training. 13 Coming back to your understanding of the position 14 of subpostmasters during the rollout, was this the 15 reflection of the implementation team at the end of the 16 rollout looking back that some SPMs, some 17 subpostmasters, had been left to flounder? 18 A. Well, from the position of the implementation processes 19 and the role of the HFSO, which I knew because I'd been 20 involved in the design of that role, it was an agreed 21 process that, at the point of implementation and 22 migration, the Field Support Officer would guide the 23 manager and staff through the process and would be there 24 at the first cash account after implementation and that 25 subsequent cash accounts, if necessary, would have some 70 1 level of support from the retail line; so business as 2 usual retail operations as the implementation team was 3 moving on. 4 So there was no intention of subpostmasters or any 5 of their staff being intentionally left to flounder. 6 Q. I wasn't asking about what was intended -- I apologise 7 if there's any confusion -- simply that the reflection 8 here, looking back on what could be learned from the 9 rollout process, in May 2001 it was being recorded here 10 that the Post Office was recognising that some 11 subpostmasters had been left to flounder. 12 A. That's what -- yes, that's what it says. 13 Q. Thank you. I have one last question. If we could look 14 at page 34, please, at the bottom and I want to look at 15 3.10 which is headed "other". Can you see that, 16 Mr Grayston? 17 A. Yes. 18 Q. Thank you. This section starts: 19 "The helplines are not seen as an effective 20 support to the network, there seems a lack of knowledge 21 and a reluctance to pass to a higher level for 22 resolution. 23 "Installing up to the 8th December was a mistake. 24 "The number of errors generated post Go Live is 25 directly linked to poor cash account training, an extra 71 1 half-day should have been allowed. 2 "The legacy left due to the migration use of the 3 suspense accounts needs to be resolved. 4 "The rollout plan appeared to take no account of 5 office size or pressure periods, this operational 6 information should be included within the scheduling 7 process. 8 "Overall the size of the project was immense and 9 has been a success which is mainly due to attention to 10 detail, focus, meaningful reviews and a lot of hard work 11 by so many people." 12 I have a few questions about this. 13 SIR WYN WILLIAMS: I thought you only had one, Ms Patrick. 14 MS PATRICK: It's one point, sir, but it's about 3.10 which, 15 as you can see, covers a lot of detail. 16 SIR WYN WILLIAMS: I'm slightly concerned that we are 17 revisiting Phase 2 exclusively in this part of your 18 question and I'm not sure to what extent I want to do 19 that; but, okay, one last point. 20 MS PATRICK: Thanks, sir. 21 We're at the end of the rollout. Is this an 22 understanding that at the end of the rollout at this 23 point, May 2001, Post Office was acknowledging that the 24 helplines were not seen as an effective support to the 25 network? 72 1 A. Well, that's what it's saying. 2 Q. Thank you. Ms Kennedy's already highlighted some 3 problems would be problems that were flagged by 4 subpostmasters in their branches. 5 A. Yes. 6 Q. Were helplines reluctant to pass up to a higher level 7 for resolution when a problem got to them? 8 A. I think you would need to speak to the Helpdesk 9 management. They shouldn't. It weakens and devalues 10 the purpose of a helpdesk or a helpline if the 11 appropriate action isn't taken in terms of escalation. 12 Q. You see there there's a number of errors being generated 13 post Go Live. Is that consistent with your 14 recollection? 15 A. I think there was a recognition that there were some 16 errors as people were learning to use the system, yes. 17 But there was no feedback that I can recall from the 18 field teams and operational management that the level of 19 challenge was so significant as to undermine the 20 continuation of rollout. 21 Q. So here at the end of rollout in May 2001 the errors are 22 being attributed, it says "directly linked", to poor 23 cash account training. Is that consistent with your 24 recollection? 25 A. I don't know. The author presumably, or whoever wrote 73 1 this particular point, would have had the analysis to 2 create that linkage. 3 Q. Just as one of the individuals that were involved in the 4 team putting together this review, we've already looked 5 at the acknowledgement, the reference to non-existent 6 technical oversight and validation during the 7 implementation process. Did anybody involved in the 8 review, in your recollection, consider whether these 9 errors that were arising post Go Live might not be 10 attributable only to training but to problems with the 11 technology itself? 12 A. Yes, that's a very good question. At the time -- at the 13 time -- you know, I think the working assumption was 14 that the system was reliable and robust and producing 15 outputs that could be trusted, and therefore the 16 reflection of cash account or training is what you see 17 here. Whether that was, you know, an assumption that 18 was appropriate is now very questionable. 19 Q. This is the last question: if anybody in your team or 20 anybody else in POL at all, maybe involved in this 21 review or not, can you recall if anybody joined the dots 22 or tried to join the dots between a lack of technical 23 oversight and validation and continuing problems with 24 the cash account? 25 A. Sorry, I just need to take you back to your linkage 74 1 here. The technical oversight was about implementation, 2 technical aspects of implementation, infrastructure, 3 hardware, software, software failures, and aspects of 4 that oversight for implementation. 5 If you're asking me the about joining the dots in 6 a more general sense, there were challenges, there were 7 discrepancies and was anybody stepping back and looking 8 at this overall, I don't know that there was. 9 MS PATRICK: Thank you, Mr Grayston. We don't have any more 10 questions for you. Thank you, sir. 11 SIR WYN WILLIAMS: Thank you everyone. And thank you, 12 Mr Grayston, for coming to give evidence and answering 13 the questions put to you. 14 So is that it for today, Ms Kennedy? 15 MS KENNEDY: Yes, Chair. We return tomorrow with Mr Shaun 16 Turner and Ms Anne Allaker. 17 SIR WYN WILLIAMS: See you in the morning. Goodbye. 18 (12.17 pm) 19 (Adjourned until 10.00 am the following day) 20 21 22 23 24 25 75 1 I N D E X 2 STEPHEN ROBERT GRAYSTON (sworn) ..................1 3 Questioned by MS KENNEDY .........................1 4 Questioned by MR STEIN ..........................48 5 Questioned by MS PAGE ...........................51 6 Examined by MS PATRICK .........................56 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 76