Public Audit Committee

Meeting date: Thursday, January 27, 2022

Official Report 617KB pdf

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Section 22 Report: “The 2020/21 audit of the Commissioner for Ethical Standards in Public Life in Scotland”

I welcome people back to the second half of this morning’s committee meeting. In this part of the meeting, we are taking evidence on the Audit Scotland section 22 report on the office of the Commissioner for Ethical Standards in Public Life in Scotland.

I welcome back the Auditor General, Stephen Boyle. He is joined remotely by Richard Robinson, senior manager, performance audit and best value, Audit Scotland. We are also joined by Pat Kenny, director at Deloitte LLP, who was involved in putting the report together. I invite the Auditor General to give an opening statement.

Many thanks, convener. I am presenting this report on the 2020-21 audit of the Commissioner for Ethical Standards in Public Life in Scotland under section 22 of the Public Finance and Accountability (Scotland) Act 2000.

The commissioner’s office plays a vital role in upholding public trust in ethical standards in public life through investigations into the conduct of MSPs, local authority councillors and members of public boards. My report draws attention to significant concerns about the operation of the commissioner’s office in 2020-21.

Both the commissioner’s office annual report and accounts and the auditor’s report highlight ineffective governance arrangements and a breakdown of relationships with key stakeholders.

During the year, the Standards Commission for Scotland issued statutory directions to the commissioner’s office for the first time. That was to provide it with assurance that the commissioner’s office was carrying out its functions in accordance with legislation. Had governance been operating effectively, many of the issues in my report might have been identified and addressed more quickly. In particular, there was no defined performance management framework; risk management was ineffective; and there was no internal audit function. In addition, the audit committee did not operate effectively during the year. Action is also needed on workforce planning and training.

The auditor recommends that all eligibility decisions and investigations carried out since August 2020 be reviewed by an appropriate external investigator. There is a significant risk, with funding and staffing implications. Improvements are needed for the commissioner’s office to operate effective strategic leadership, fulfil its statutory duties and restore confidence in the effectiveness of this essential public office.

I am aware that the commissioner’s office is taking action to address the issues that have been identified and it is vital that progress is made so that the public, the Parliament and public bodies can have trust and confidence in the organisation.

I will continue to monitor and report on the performance of the commissioner’s office, with a view to further public reporting. As ever, convener, my colleagues and I look forward to answering the committee’s questions.

Thank you very much indeed. Sharon Dowey has a series of questions to ask.

We note that the commissioner was appointed as commissioner and accountable officer on 1 April 2019. Paragraph 8 on page 3 of the section 22 report outlines that

“The Commissioner has been on extended leave since early March 2021.”

We also note that the Scottish Parliamentary Corporate Body appointed the public appointments manager as acting commissioner and the head of corporate services as acting accountable officer on 20 April 2021. Do you know the reasons why the acting commissioner is not also fulfilling the role of accountable officer?

That situation is not unprecedented. As we saw in some of the evidence that the committee took last week, there are circumstances where the roles of head of the organisation—for want of a better term—and accountable officer reside in different posts. Ultimately, that is a choice that the Scottish Parliamentary Corporate Body took when it allocated those responsibilities. However, as you note, that operated differently with the commissioner, who is currently on leave.

Does Pat Kenny have any insight into the distinction between the roles of commissioner and accountable officer?

Good morning. I do not have much to add on that. As the Auditor General mentioned, that situation is not unprecedented, and it was felt that that was the appropriate decision, given the circumstances that the organisation was in at that time.

Okay—thank you for that.

Paragraph 28 of the section 22 report refers to 22 separate recommendations that the external auditor made. Those recommendations can be found in the auditor’s annual audit report, which the commissioner’s office has accepted and is progressing.

We also understand from the external auditor’s annual report that a “separate detailed draft report” by the auditor to management was considered by the advisory audit board in June 2021, which set out its findings and conclusions on each audit dimension. Is that report publicly available?

I am happy to start on both those points and I will invite Pat Kenny to come in. As the author of those reports, Pat will be able to update the committee. The 22 recommendations are very significant recommendations on the steps that needed to be taken to address many of the issues; some very important work needed to be undertaken. Pat has seen the progress that has been made and the progress that is planned, and he can update the committee on that in a second.

Pat Kenny also prepared a wider scope report to accompany the annual audit report, and there is a very clear overlap between them. The recommendations and conclusions in the wider scope report in effect form the action plan that you referenced with the 22 action points. The wider scope report is not yet a finalised report because, as auditors, Pat’s firm follows the same processes that I do in Audit Scotland—for clearance and factual accuracy, we give organisations and people who are referenced in the report the opportunity to comment. Pat has been unable to take all those steps because, as noted in the report, the commissioner is currently on sick leave, although that has not stopped Pat preparing the annual audit report and it has not stopped me preparing a section 22 report.

For my section 22 report, I have drawn on the annual audit report, but there are two other important and key sources for my report. I referenced the very significant disclosures that are made in the commissioner’s office’s annual report and accounts, and the other source of evidence is the minutes of the Standards Commission for Scotland and some of the judgments that it has made. Therefore, I have drawn on a range of sources.

I will pause and invite Pat to say more about the status of his work.

Thank you, Auditor General.

That was the reason why the draft wider scope report has not yet been finalised. I still hope to do that, but we have not been able to have feedback from the commissioner on the findings of the report to date. That is the reason why it is still in draft form.

To give the committee some assurance, I can say that the recommendations are very much in line with the wider scope report. I think that there was one additional recommendation in the wider scope report, but it related to wider governance implications, which were more relevant to the SPCB. The recommendations that form the publicly available report and the Auditor General’s section 22 report are pretty much the same recommendations that are included in the draft wider scope report.

That is fine. Thank you.

10:15  

Craig Hoy has some questions that follow on from that.

To delve a little bit deeper on leadership and governance, paragraph 9 on page 4 of the section 22 report highlights that the acting accountable officer of the commissioner’s office concludes that she is

“not satisfied that an effective scheme of governance operated during 2020/21.”

The external auditor also concludes in the annual audit report that the governance and scrutiny arrangements were ineffective during that period and that they are not currently sufficient to deliver best value.

Noting those very serious issues in relation to leadership and governance, to what extent is the 2020-21 picture different from the assessment that was made in the prior reporting period?

Those are very significant statements that the acting accountable officer has made. It is incredibly rare to see as clear a judgment from an accountable officer that their organisation did not have sufficient arrangements to deliver best value.

In the report, we identify a number of factors relating to what has contributed to those circumstances—inadequate performance management, risk management, governance and scrutiny arrangements and the absence of an internal audit function—all of which were factors behind the accountable officer’s own assessment of governance arrangements.

Pat Kenny can give some of the detail behind the progress that has been made this year. I will highlight two things—first, the advisory audit board, which is the name of the organisation’s audit committee, has been re-engaged. That is now working again, which is an essential component of any organisation’s oversight, support and scrutiny function. They have also made progress in steps to appointing an internal audit function. That is all necessary progress.

You may wish to come back to this, but although we are pleased to see action being taken on the 22 recommendations, that will get the organisation back up to a baseline and it is perhaps too early to draw any definitive conclusions about how well those arrangements are working.

Pat Kenny will want to say a bit more about what he has seen since the conclusion of last year’s audit.

As the Auditor General says, it is early days, but I am satisfied that the acting commissioner is making good progress in implementing our recommendations. For example, there is a new risk management policy and a much more detailed risk register is in place, so there has been good progress there.

There has also been good progress on the performance management framework, which has been encouraging. Progress has also been made with the new investigation manual in terms of getting an established template for how investigations are conducted within the organisation.

It is early days, but the early signs are that the organisation is making reasonable progress. It is something that I am keeping under constant review and, as a matter of course, we will do a follow-up on the progress made to date in this year’s audit.

In paragraph 23 of the report, you set out rather clearly that some of the most basic governance processes and functions were absent from the commissioner’s office during 2020-21. Indeed, we just heard, there was no defined performance management framework, risk management policy, risk register or internal audit function. Did the auditors have any growing concerns about the way that the commissioner’s office was operating before the 2020-21 reporting and performance period?

Again, Pat Kenny will want to talk the committee through some of the chronology in relation to the previous audits and how we arrived at some of the fairly stark circumstances that we are reporting on.

Overall, we saw a very clear deterioration in circumstances during the year. There are a number of components to that, but overall there was a deterioration in relationships between the commissioner’s office and its key stakeholders, and certain events that were particular to the year in question such as changes to investigations processes, a restructuring of the organisation and a stepping back from advisory audit board arrangements led to some of the very significant circumstances that are set out in the report.

As for what went before and how things unfolded and escalated to the current situation, Pat Kenny can say a bit more about previous audits up to today. [Interruption.]

I am sorry, but we cannot hear Mr Kenny. I do not whether he has muted himself or whether we have muted him at this end.

I have unmuted myself, convener—apologies for that.

There were a few warning signs in the prior year’s audit of what might have been about to happen, but nothing on the scale that we identified in the current year’s audit. The main issue was the breakdown in relationships with the advisory audit board—obviously there were difficulties in that respect. The commissioner was minded to appoint new members to the board and was in discussion with the SPCB on that, but no agreement could be reached on such changes.

It transpired that, when the accounts were signed off in October 2020—the year before—that was done without the involvement of the advisory audit board. Although there was nothing statutory that required the board to be involved in the sign-off process, I was significantly concerned about the situation at the time, and I had to consult and take a view internally on whether it was still appropriate for me to sign off the accounts for that year. I concluded that it was possible to do so. As I have said, there were some signs in the previous year that things were not moving in the right direction.

Colin Beattie has a series of questions.

I have to say that the report came as a bit of a surprise, and I am reminded of Juvenal’s famous phrase, “Quis custodiet ipsos custodes?” It seems to fit very well in this particular situation.

Are you going to provide us with a translation, Mr Beattie?

It means, “Who watches the watchmen?”

Thank you.

Paragraph 19 of the report talks about the remedial action that the commissioner’s office is taking to address the issues. What confidence do you have that these actions will be enough to address the scale of the problems that seem to exist in the office?

Our assessment would be that it has a credible action plan, with 22 recommendations being subject to scrutiny and challenge with the re-engaged advisory audit board as appropriate. That is welcome progress.

However, some of the recommendations therein are significant. We have already referred to the fact that the commissioner’s office will not be able to solve all of these challenges on its own, and it needs to repair relationships with the Standards Commission for Scotland, the SPCB and, indeed, its own staff. All of those components will give it the platform for delivering on the progress that is needed, but some of them will potentially require additional funding if concerns about loss of public, parliamentary and local authority confidence and trust in the process are to be addressed.

We have already touched on the fact that addressing the challenges and putting in place the recommendations will not happen overnight, but what we have also seen—and Pat Kenny can come in on this point if he so wishes—is that the organisation, through the acting accountable officer and the acting commissioner, has engaged fully and is taking the matter really seriously through what we think is an appropriate action plan. However, it will not be able to address everything entirely on its own accord.

There are signs that the seriousness of the situation has absolutely been recognised, and as we have said already, we will continue to do our work and report publicly on the progress that is being made. Again, I invite Pat Kenny to give his own assessment.

I just want to emphasise that I am satisfied that the acting commissioner is taking these issues very seriously indeed and is working hard to address them. As I have said, it is still early days, and we will keep the matter under constant review, but from my perspective the indication is that the acting commissioner is keen to get these issues resolved as soon as he possibly can.

You have said that the commissioner’s office cannot do all this alone and will have to engage with outside partners. Does it have the skills internally to do so? Given the situation that the organisation got itself into, perhaps it did not have the skills in the first place. Does it have the skills now?

It is worth emphasising that this is a small organisation. Pat Kenny can confirm this, but I think that the number of people who undertake what is a really important statutory function is barely into double digits. We have also seen changes in the volume and complexity of complaints cases that it is asked to look at in what is a difficult environment. It is also worth recognising the nature of the case load.

There are two components to this, the first of which brings us back to Deloitte’s recommendation that some cases between August 2020 and the end of the year be revisited. That will require additional financial—and potentially resource—support, and part of the recommendation is about whether independent resource is needed to support that review.

Secondly, we say in the report that restructuring and workforce planning have to come together in a way that has not happened up to now. Any organisation’s workforce plan must be aligned with corporate plans, strategic objectives and the financial position, and that has to be done to allow the commissioner’s office to assess whether it has the resources and the right people or staffing cohort to deliver what is being asked of it in very important and challenging circumstances. As a result, I am perhaps not able to give you the assurance that you are asking for at this stage.

It is perhaps early days, but has any commitment been made by the Scottish Government with regard to the financial support that the office needs or providing it with additional skills and support to get through this?

I would draw a distinction here, as this is a parliamentary body rather than a Government organisation. As a result, any discussion on the financial position and any support and resources that the commissioner’s office might need would be between the office and the Scottish Parliamentary Corporate Body. The last I heard, those discussions were still on-going, but Pat Kenny might have a more up-to-date position in that respect.

First, I just want to go back and confirm that there are 10 employees in the organisation.

The big outstanding recommendation that requires SPCB finance is the re-investigation of the complaints process and the external examination of the complaints that were made during that defined period. My understanding is that there has been no agreement on the financing of that outstanding recommendation, but I still think that it is the one that needs to be addressed as a matter of urgency.

10:30  

That brings me to my next question. Paragraph 28 of the report says that the external auditor made 22 separate recommendations. You have already said that there needs to be collaboration with the Scottish Parliamentary Corporate Body and others in order to implement those. What engagement has Audit Scotland had with the corporate body about the report and its role in addressing some of the issues that have come up?

My engagement is in the receipt of the annual audit report and my decision on whether there is sufficient public and parliamentary interest to report to the Public Audit Committee on the content. I have done that today, and I published the report at the end of last year to highlight the risk of the loss of public confidence and concerns.

We have said that many of the recommendations can be dealt with by the commissioner’s office and that some require parliamentary consideration and the corporate body’s view. There are two angles to what that means for Audit Scotland’s role: the public reporting that I do through the preparation of section 22 reports and so on, and my audit work as the auditor of the Scottish Parliamentary Corporate Body. The work in question is a small component of that work, and we continue to have regular discussions with the Parliament’s audit and assurance board and through my direct engagement with the chief executive of the corporate body.

Should I interpret from that that you have had specific discussions with the corporate body in connection with the issue?

Not directly with the corporate body. I have regular engagement with the Parliament’s chief executive on a range of factors. You will, of course, be aware that the chief executive and the corporate body are well sighted on the circumstances. As we have mentioned, it will be for the corporate body to take a view on what steps, if any, it chooses to take on any of the resource requirements and relationships that are cited in the recommendations in the report.

I assume that the report has been agreed and accepted by the commissioner’s office.

Indeed. The recommendations in the report, along with the full disclosures that the commissioner’s office made in its annual report and accounts, reflect the significance and seriousness of the matter. I do not think that there is any debate or ambiguity about the fact that there were very significant challenges in the organisation in the year in question.

The report highlights the breakdown in working relationships between the commissioner’s office and other external bodies, and you have again touched on that. Can you give some details on how that breakdown happened, what external stakeholders the commissioner’s office should have engaged with, and how that led to the lack of scrutiny that one would have expected?

I highlight to the committee exhibit 1 in the report. We set out how the process of investigations of ethical standards complaints works in the structures in Scotland, how that relates to the investigations that are undertaken by the commissioner’s office, and the dual reporting lines to the Standards Commission, which is responsible for complaints about members of public boards and local authority elected members, and to the Parliament’s Standards, Procedures and Public Appointments Committee, which is responsible for complaints that have been received about members of the Scottish Parliament, lobbyists and the public appointments process.

We note that the breakdown in relationships is one of the key themes of the report. I will focus briefly on the Standards Commission for Scotland. For the first time since the creation of the Parliament, the Standards Commission for Scotland saw it fit to issue a direction to the commissioner’s office in respect of the office’s role, and its concerns about the information that it was being provided with and the nature of the investigations that were being undertaken.

The Standards Commission three separate directions to the commissioner’s office—that is most unusual and that is significant in and of itself. In particular, it determined that the provision of information direction had not been met. Those directions are all a consequence of non-compliance with the direction and judgment of the Standards Commission, as it has minuted officially. They are part of a wider picture of concerns and the breakdown of relationships. Many issues such as these, where two organisations have to work closely together, as these two do, would typically be resolved through discussion and negotiation, as opposed to getting to the stage where one body issues an official direction to another.

To turn this on its head, so to speak, what could have been done differently by all the external bodies that deal with the commissioner’s office in relation to the relationships that broke down? They must have known that there was a problem, and that problem did not happen overnight—it happened over an extended period. What should the external bodies have done to raise a flag about the issue? One external body raised a flag with the commissioner’s office. Did it go anyplace else? Did anybody else have sight of that?

I will give a perspective on that and Pat Kenny will want to offer one as well.

As we have touched on already, there is a context of matters being escalated quickly during the course of the year in question. As was mentioned, typically, where there is a need for organisations to work closely together, whether through preference or statutorily, in this regard, it is by a process of negotiation, with a memorandum of understanding if they need to formalise it along with regular meetings and so forth. Those all allow for the business to be undertaken quickly.

What is particular to the commissioner’s office is that some of the more typical routes through which organisations can engage with one another were not available. The presence of an audit committee was missing. There were not those avenues, other than perhaps through the commissioner’s office itself, through which to raise those concerns. The fact that those avenues were missing gave fewer opportunities to raise those concerns.

That is perhaps as far as I am able to go, Mr Beattie, in saying what the experience of those organisations was like and what they might have wanted to do. This might be a question to put directly to the other organisations identified in the report so that they can offer their own perspectives, if that would be of value to the committee.

The commissioner’s office is a small organisation. Pat Kenny said that there were only 10 employees. Who would have provided its internal audit function?

As we have touched on, it would be for the commissioner’s office to determine who would be best placed to undertake an internal audit function. Pat Kenny can provide an update on that, but our understanding is that the commissioner’s office has now gone out to tender for the receipt of internal audit services, as many organisations do to best procure such services.

So the organisation did not have internal audit oversight.

It is clear that that was one of the key components that were missing in the organisation. An internal audit of its arrangements and all the value that that brings to any organisation was not a feature of its internal control and scrutiny arrangements. Pat can comment on progress on that front.

Yes, there has been progress. It has been out to tender and I think that an appointment will be made in the short term. There have been discussions over quite a sustained period on internal audit and I have raised the gap in prior year audit reports. Previously, the commissioner wanted to go for a shared-service arrangement with another commissioner’s office, but that did not transpire. That was a bit of the reason for the delay, but good progress has been made on that and I expect the new arrangement to be in place soon.

It is important for the committee to understand that the advisory audit board is not the equivalent of an audit committee in other public sector organisations. It does not have the clout of those. It is an advisory body; it is light touch. Although the absence of the advisory audit board did not help in terms of that engagement, it is important for the committee to realise that it is not the equivalent of a normal public sector audit committee with which members would be familiar.

Auditor General, you have referred several times to the Standards Commission’s directions. A moment ago, you said to Colin Beattie that it had issued three directions and that that was the first time that that had happened. In so far as you can, will you tell us what brought that about? What were the directions and were they carried out?

Richard Robinson has some of the detailed analysis on the specifics of each direction. He can update the committee on whether they were achieved. The important thing to note is that, in overall terms, they were not achieved, Mr Coffey. The Standards Commission still had concerns and formally raised them with the Scottish Parliamentary Corporate Body, noting that the direction had not been complied with.

It is most unusual that the Standards Commission sought to issue a direction. In terms of the relevant legislation and regulations, to do so is indicative of significant issues. Normally, we would expect organisations that are obliged to co-operate and work closely together to resolve issues through more informal means, such as clarity around shared objectives and delivery. For the situation to escalate to a stage at which a direction was issued is indicative of the breakdown of relationships that we note throughout the report.

I ask Richard Robinson to set out some of the detail behind each of the directions.

Good morning. As we see in paragraph 11 of the report, the commissioner’s office is independent but the Standards Commission has the opportunity to issue statutory declarations to provide it with assurance about activities.

As the Auditor General said, three directions were issued in the year. In effect, they built on each other. As set out in the commission’s annual report and accounts, they were about the need to provide a list of complaints and what happened with them. The need for letters detailing the reasons why complaints were deemed ineligible or inadmissible was one of the themes of the March 2021 direction.

As we can see from what is included in the section 22 report, the auditor’s report and the minutes of the Standards Commission, by the end of the year there was a feeling that the directions had not been complied with and that further action was needed. That is why it is so important that the relationships are re-established and that there continues to be a sense of trust and checks and balances between the organisations.

The notes that we have say that the outcomes of those directions were not reported back to the commission because the commissioner’s office did not carry them out. I suppose that that is what you are saying—they were not carried out, so how could they be reported back to the commission? That led to the complaint to the SPCB about the matter. Has that been resolved? Have the directions been carried out satisfactorily, or are we still debating the matter?

I cannot give a definitive answer on whether the Standards Commission is satisfied that the directions have been complied with. I understand that negotiations continue on that front. That does not detract from the point that there are signs of progress. There is an action plan to address many of the concerns and to rebuild the important relationships. Ultimately, it will be for the commission to reach a view on whether the directions have been met.

10:45  

Your report says that the legal advice that was obtained by the commissioner’s office confirmed that the investigation process, which we understand was amended in 2020, and the assessment process did not comply with the legislation. Was the process compliant before 2020? Is it compliant now? Where are we on that?

That is a hugely significant issue. The legal advice determined that the investigation process was not compliant with the legislation. There are very significant risks associated with that and with what that might mean for previous investigations and any associated judgments. There were factors that led to changes in the investigation process. On that basis, Pat Kenny has made recommendations on what that means for cases and investigations between August 2020 and the end of the year. There is a clear connection between changes in the investigation manual and the associated timescale that followed. I will ask Pat Kenny to update the committee on the status of the manual.

The investigation manual is still work in progress, but that work is moving forward. The acting commissioner has agreed the assessment criteria for complaints with the SPCB, which is a positive step forward. Historically, the issues related to the fact that it appeared that complaints were being dismissed at the eligibility stage, which should not have happened, and that informal investigations were often carried out into certain complaints. Under the terms of the directions, that should have been communicated to the Standards Commission, but that was not happening.

The fundamental reason that the directions were issued—this goes back to an earlier question—was that the Standards Commission was asking for certain information but it was not forthcoming. Under those circumstances, the commission felt that it had to issue the directions.

You are talking about a change in the way in which complaints are assessed. Has it been agreed that that process has to be changed? Is the new process now being followed?

Yes. That is right.

Your report tells us about the substantial increase in the number of complaints against councillors and board members. Are we embarking on a new process for the future, or will we revisit the complaints that perhaps should have been followed up but were not?

That is central to the recommendation. The commissioner’s office is considering the best way to do that. Pat Kenny’s recommendation is that that work should be supported by an external assessor, but the commissioner’s office’s view is that it will do that internally, in the first instance, and then take a view, following further discussions with the Scottish Parliamentary Corporate Body, on whether to involve any external support as part of the reviews.

Is there any indication of when there might be a resolution to that?

Our report gives the most up-to-date position, as far as we are aware. That question is probably for the commissioner’s office, as it might be able to share the status of those discussions with the committee.

We will continue on the theme of workforce issues.

Paragraph 17 of the section 22 report refers to the acting commissioner’s assessment that

“staff were not equipped fully to fulfil the Office’s statutory functions.”

The external auditors therefore recommended in their annual audit report that a formal training programme and workforce planning arrangements should be put in place. In light of that, can you confirm whether a skills gap exists in the organisation and, if so, in which specific areas?

I will ask Pat Kenny to update you on the nature of those concerns. As he mentioned, the organisation has only 10 employees, and there is a correlation between the volume and complexity of the cases that come to the organisation and its ability to field all that work in a timely way. There are other factors relevant to an organisational restructure. The commissioner’s office made an important disclosure in its annual report and accounts that one of the circumstances that contributed to the challenges that it found itself with was long-standing and experienced members of staff leaving the organisation during the year. That loss of corporate memory prevented it from taking forward its statutory functions in the way it wanted to.

What comes next is a feature of some of Pat Kenny’s recommendations and the commissioner’s office’s response in relation to skills, training and workforce planning. Pat will say more if he is able to.

We identified that there was a clear lack of a workforce plan. The recommendation was made that that should outline the current workforce, the future workforce and how it will get there, and identify any actions that are required to rectify those skill gaps. There has been a bit of progress on the interim plan that is being put in place by the acting commissioner, but it is fair to say that further progress is required on workforce planning, which we will follow up in the course of the next year’s audit.

There was a view that there was a clear need for training. Has that training started in a meaningful way and are you assured that it will meet current needs and concerns?

Pat Kenny can talk about how that is progressing. I have some reluctance to be definitive that any one component of the recommendations will be enough to address all the significant concerns that are in the report. It matters that training underpins recruitment for vacancies in the organisation and that there is an effective workforce plan that is linked to the financial and corporate objectives. All those things have to be run in a wider sense to address the issues that have been noted. Pat may have an update on what that means in relation to training.

There has been some progress there, but there is an on-going issue that links back to workforce planning; my understanding is that there is only one individual in the organisation who has experience of dealing with MSP complaints. Obviously, the organisation would be totally exposed if that individual leaves, so an overarching plan is required to match organisational needs to its statutory functions. I am confident that the acting commissioner understands that and accepts that there is a need for further progress, and we will keep that under review.

I go back to the size of the organisation. I will not fall back on my rusty Latin to make the point, but I am thinking of an old episode of “Yes Minister” in which Sir Humphrey Appleby explains to the minister the full structure of permanent secretaries and undersecretaries and the full complexity of Government. The minister asks, “Do they all type?” and Sir Humphrey answers, “No. Mrs McKay is the typist.”

Considering the complexity that the organisation deals with and the fact that only one individual has experience of MSP complaints, is there a concern that it is not properly resourced to do its job, and would vacancies have a significant negative impact? Should we be looking longer term at the resource that the corporate body provides to the organisation?

In the year in question, vacancies were a contributory factor in affecting the organisation’s ability to deliver what it is intended to do—following the restructuring, unfilled posts and a loss of corporate memory were unquestionably key components of that. As Pat Kenny mentioned, there are key person dependencies in the organisation, too. All those things create risk for the organisation’s ability to deliver what it is intended to deliver.

With regard to what comes next, it will be a matter for the commissioner’s office and the Parliament to determine the resource component that the organisation has at its disposal and the financial consequences of that. As we have mentioned, we understand that those discussions are continuing. Ultimately, when it comes to the resource that is provided and the expectations in that regard, how to align those two points is a policy consideration for the Parliament to decide on.

I want to finish the session with a few short questions. You have catalogued the challenges that the organisation has faced as a result of staff training issues and staff vacancy issues. Arguably, there continue to be significant workload burdens on the staff. There are also issues with funding, and approaches have been made to the corporate body to increase funding. At the same time, the audit report recommends that important pieces of work be carried out, which I presume would be quite substantive, such as the drafting of a full investigations manual. There is also a proposal to bring in an external investigator in order to address some of the deficiencies in the organisation.

In the light of all that, do you think that that will be achievable?

It is clear that it will be very challenging to do all those things. As we have mentioned, the response to the recommendations and to our report and Pat Kenny’s audit report, along with the clear disclosures in the organisation’s annual report and accounts, all point to a recognition of the challenges that exist. Many organisations do not even get to the point of accepting the challenges that face them.

That, coupled with the organisation’s action plan, gives it a platform to restore confidence in its work. As we have touched on, it cannot do that alone. It will need to rebuild trust and its relationships with its key stakeholders. The other component, as you mentioned, is the financial circumstances of the organisation. That latter point is perhaps a policy matter, which relates to the choices that the Parliament will want to make, in conjunction with the commissioner’s office.

To answer your question directly, that work is achievable, but the timing of it will be dependent on some of the factors that I have outlined.

Earlier, Colin Beattie asked you about where the negotiations between the commissioner’s office and the corporate body on the release of more resources lie. I think that you said that that was still the subject of negotiation. Is that correct?

Yes, that is my understanding.

So nothing has been finalised yet.

There is a section on whistleblowing in the report. I want to get this right: that refers to whistleblowing for employees of the organisation, not whistleblowers who have a part to play in complaints that come to the organisation. I am sure that there is a Latin equivalent of this. Given that I presume that the organisation deals, from time to time, with complaints by people who are covered by the public interest disclosure legislation—people who are whistleblowers—that begs the question why there is not, within an organisation that looks at those matters, an effective whistleblowing policy. A recommendation has been made that that needs to be addressed. Where are we with that?

11:00  

Pat Kenny can tell you about the progress that is being made on the recommendation, but first of all I will provide some context.

You are right that, under the Public Interest Disclosure Act 1998, the commissioner is an identified person with whom external members of the public can raise concerns. Indeed, that is, as it were, the very nature of the organisation. The organisation also has a whistleblowing policy for its own employees, but the audit found a lack of awareness of the policy and the routes and options for employees in the commissioner’s office to raise concerns.

To touch on Pat Kenny’s earlier point, the audit noted that there were not the typical avenues for employees to raise concerns. In other organisations, you would have a route through the audit committee—or its chair—a board member and so on, and there would be more than one source through which to whistleblow, if an employee felt that that was necessary. In this organisation, the route was through the commissioner. In light of that, what comes next will matter with regard to the re-establishment of the advisory audit board and, alongside that, ensuring that staff have greater awareness of and tools for whistleblowing, should they need to do so.

I ask Pat Kenny to talk about the promotion of the material and any other considerations.

The whistleblowing policy has been updated and the process to be followed has been communicated to staff. One improvement that has been made relates to an option in the policy for staff with any concerns to go to Audit Scotland; we found that staff in the organisation were not aware of that, and it has now been highlighted and communicated to them. There has been some progress in that respect.

So is it that there was a policy, but it was not fit for purpose, or is it that there was a policy, but people were not sufficiently aware of it?

It is both of those factors, convener.

We will end where we started, with the comment in the Auditor General’s opening statement that this is all about public trust in the complaints system and how complaints are dealt with. What stands out in the report are recurring phrases such as “substantial weaknesses” and the need for “significant improvements”, and in paragraph 26, the report concludes:

“The overarching risk is a loss of public trust in the ability of the Commissioner’s Office to properly investigate and consider complaints made against the conduct of individuals in public life in Scotland.”

What is your assessment of where things stand today? Is there an existing crisis of confidence in the system?

Bearing in mind the volume of content in the audit report, the disclosures in the annual report and accounts and my section 22 report, I have to say that, although all of those things are necessary forms of public reporting to ensure openness and transparency, an unavoidable consequence and risk is that members of the public will question whether they will be heard adequately, that their complaint will be investigated sufficiently with proper levels of rigour and that matters will be dealt with as they would expect.

We are not concluding that that specifically has happened and are not pointing to any cases where those circumstances have unfolded, but the fact is that any organisation has to have sufficient governance, leadership and scrutiny arrangements, because they are all the typical components of a well-run organisation. Given that so many of those components have been missing in this organisation, there is a risk that it is unable to do what it is there to do and, if that sense pervades, there is also a risk that members of the public will disengage from the process and will not have trust and confidence in the public complaints process.

As well as any internal reforms, what external changes are needed for the commissioner’s office to address that?

That is probably a very direct question for the commissioner’s office. As with all our reports, this report has been cleared for accuracy and tone. As well as addressing the recommendations, the commissioner’s office might reflect on whether there is anything that it can do to give members of the public reassurance. Today’s discussion is clearly part of that process, as will be any follow-up work or public reporting that the organisation might wish to carry out about how it has addressed the weaknesses that we have discussed.

As always, Auditor General, thank you very much for the frankness of your replies. I also take this opportunity to thank Richard Robinson as well as Pat Kenny of Deloitte, who have joined us online this morning.

That ends the public part of the meeting, and we now move into private session.

11:05 Meeting continued in private until 11:46.