Public Audit Committee

Meeting date: Wednesday, March 14, 2012

Official Report 424KB pdf

---

Section 22 Reports

---

“The 2010/11 audit of the National Library of Scotland”

Item 3 concerns correspondence that relates to the section 22 report entitled “The 2010/11 Audit of the National Library of Scotland”. The correspondence, which is from the Scottish Government, has been circulated to members. I will open the issue up for colleagues to comment.

I have just read the letter from Peter Housden and I am a bit disappointed. Basically, he says that all the audits that were done at the National Library of Scotland were done according to UK auditing standards and Audit Scotland guidance. The briefing paper and report from the Auditor General states:

“The main samples tested during both years reviewed did not include any of the fraud related items”.

On page 7, however, it says that

“it is unlikely that in this case the frauds would have been detected through this approach.”

Paragraph 35 continues:

“Given the sophisticated nature of the fraud ... it would not have been reasonable to expect the external auditor to have detected the frauds”.

I was looking for something a bit more robust—perhaps saying that lessons had been learned and that this was exceptional. The fraud that was discovered was of £500,000, which is not insignificant. I was hoping that the response would not be “We’ve done everything possible and it wouldn’t have been reasonable to expect the auditor to detect the frauds before they were discovered.” They were discovered only through the introduction of a new finance system in the National Library of Scotland.

My concern is that, if there are such issues in what is a small organisation by national standards, those issues might be prevalent elsewhere in the public sector. That is just my personal view.

Do you have a suggestion for pursuing that?

I hoped for something more robust from Mr Housden, saying that lessons had been learned, that something was being put in place to ensure that this would not happen again and that internal and external audits would be reviewed, or something like that.

The letter says that the National Library of Scotland accepts the recommendations in the Audit Scotland report. Are you content that we are where we are, with the comment that you have made on the record?

Yes.

If Mary Scanlon wishes to pursue the matter further, it may be worth noting the third paragraph of Peter Housden’s letter, which comments on

“the Scottish Government’s sponsoring directorate”.

Its role in the matter is an issue that she may wish to pursue in other ways. I do not think that there is much that the committee can do about it, to be honest, but sponsoring departments and what they do is always an interesting area for investigation.

Mary Scanlon has made her point on the record. The suggestion is that we note the correspondence. Is that agreed?

Members indicated agreement.

---

“The 2010/11 audit of Registers of Scotland”

---

“The 2010/11 audit of the Crown Office and Procurator Fiscal Service”

---

“The 2010/11 audit of Disclosure Scotland”

Item 4 is correspondence relating to three section 22 reports, all of which identified problems with information technology contracts. The previous convener initiated the correspondence, the committee having noted similar problems in those three public bodies. As a result of the committee’s consideration of the matter, the AGS has programmed a performance audit report in to the management of information and communication technology contracts in central Government, which will probably take place next year. Audit Scotland will look at the thematic issue.

Does anybody want to raise any issues about the correspondence?

11:30

There are some common threads in the three reports. We have seen that in reports in the past, particularly in relation to IT. One of the big messages is that there must be more planning in the early stages of project planning and in commissioning software. Is it too much to expect every organisation and public body in Scotland to have that level of sophistication in its IT services and so on? If it is too much to expect, the work still needs to be done by someone somewhere to assist those bodies to get IT solutions right before they spend the money on them and then discover that they do not work. I am pleased that the Auditor General will look at that in detail. More work on IT systems must be done in the early planning stages before organisations buy them. They must see that systems are functional and can deliver users’ requirements. They must be fit for purpose before public money is spent on commissioning and buying them.

My suggestion is that we note the correspondence in the knowledge that there will be a more profound look at the common threads that run through the different reports, as Mr Coffey says. Is that agreed?

Members indicated agreement.

11:31 Meeting continued in private until 12:11.