Audit Committee, 10 Sep 2008
Meeting date: Wednesday, September 10, 2008
Official Report
186KB pdf
Audit Scotland (Corporate Governance)
Agenda item 3 is consideration of correspondence from the convener of the Scottish Commission for Public Audit. The commission is undertaking an examination of wider audit functions in Scotland, including where Audit Scotland and the different organisations fit into the process. We have been asked whether we want to comment on the corporate governance arrangements for Audit Scotland and the public audit structure.
Convener, you and I have the advantage of being members of that illustrious body, so we had advance sight of the letter. As you know, we had some discussion in the Scottish Commission for Public Audit, but I do not think that the meeting was held in public.
No, it was not.
Certainly, no one ever turns up, even if the meetings are in public.
At that meeting, it emerged—as you and I and others have felt for some time—that the structure relating to public audit in Scotland tends to confuse people. No one has any doubt about the Auditor General for Scotland, for whom I have particular respect. He and his team produce excellent and superb reports for this committee. However, we are never exactly sure to whom the Auditor General is accountable. There is a strange arrangement for his appointment.
Furthermore, we are not sure how the Auditor General relates to the Accounts Commission and why Professor Baillie is chairman of both the Accounts Commission and—I am getting confused already—the board of Audit Scotland. There is scope for the situation to be reviewed to make the arrangements for accountability clearer to us and to the public. With no disrespect to either the Auditor General or the Scottish Executive, I feel strongly that the ultimate responsibility of the auditor and the audit process, as it were, should be to Parliament, because Parliament represents the people and is ultimately responsible for ensuring the proper conduct of affairs in Scotland over a range of matters, including audit.
I hope that we can reflect that somehow when we make representations, which we should do; either the convener should make representations on behalf of the committee, or others should do so. I do not know how that would work, given that both the convener and I are members of the SCPA. Looking at the matter from the point of view of a parliamentary committee, we ought to make representations and participate fully in the study that is being undertaken by the SCPA.
Audit Scotland, from its foundation, has a superb record of doing what it is designed to do. The committee bases its reports on that work and the committee has been at the heart of fundamental reform of aspects of Scottish organisation. To whom is Audit Scotland accountable? To my mind, the SCPA is the auditor's auditor, so Audit Scotland is accountable to the Parliament through the SCPA and through the committee.
The essence of the issue is that we must maintain the independence of the Auditor General and his work, because Audit Scotland is the independent public watchdog. Whatever is done to clarify the situation, we must maintain that independence.
I agree with Andrew Welsh that Audit Scotland's independence must be maintained at all costs.
One of the points that George Foulkes is driving at is that we can strengthen and enhance the role of audit generally by having greater clarity. Outside a small handful of people, many would not understand the relationship between the various organisations; if anything can be done to simplify that, so much the better. It is in the public's interest to have a good audit function, for both the Scottish Parliament and the Scottish Government and for other public agencies and bodies, because the public then know and can be assured that someone is acting diligently on their behalf at all times. Anything that can be done to clarify, improve and strengthen the function should be welcomed.
I am sure that we will receive further correspondence from Angela Constance, who is the convener of the SCPA. At the moment, other than taking up George Foulkes's suggestion that we feed into that process where we can, does anyone have any specific suggestions?
Members indicated disagreement.
We will note the matter and come back to it as and when required.