Work Programme (Audit Scotland)
I invite Robert Black to address the committee and explain the work programme for Audit Scotland.
Mr Robert Black (Auditor General for Scotland):
Caroline Gardner, who is the deputy auditor general, and I will do a double act on this briefing, if you are agreeable to that suggestion, convener.
Very good.
I would like to start by reminding the committee, particularly new members, of what our role is. The post of Auditor General for Scotland was created under the Scotland Act 1998. I am independent of both the Parliament and the Executive and I have responsibility for securing the audit of most public bodies in Scotland, including the departments of the Scottish Executive, the major non-departmental public bodies, national health service boards and trusts, further education colleges and the water authority—in other words, most of the public sector, with the significant exceptions of individual local authorities and police and fire authorities.
The responsibility for securing and reporting the audit of councils rests with the Accounts Commission for Scotland, which has existed since the mid-1970s. You might ask why that is. When we were designing the arrangements for the Parliament, the view was taken that it was important to maintain the constitutional separation between elected councils and the elected Parliament. The Accounts Commission therefore exists as a body that can hold individual local authorities to account for what they do without arrangements being necessary for individual local authorities to be held to account directly by the Parliament.
The Auditor General audits most public expenditure in Scotland and the Accounts Commission has a specific remit for looking at individual local authorities. Audit Scotland, which is our brand name, if you like, is a creature of the Public Finance and Accountability (Scotland) Act 2000. It is a statutory body created under that act and it exists to provide services to the Auditor General and to the Accounts Commission. In effect, therefore, public audit in Scotland operates in a joined-up way. The Accounts Commission and the Auditor General work closely together, and Audit Scotland provides us with services, not only in relation to financial audit but in looking at governance arrangements for public bodies and in making reports on the performance of public bodies.
How we do the audit is based on three principles. The first principle is that the auditor of a public body should be independent of that body. I am therefore charged with either undertaking the audit of a public body or arranging for it to be undertaken by suitably qualified people. Most of the audits of public bodies such as NHS boards and trusts, further education colleges or Scottish Enterprise are undertaken by auditors appointed by me. Quite often, they are from Audit Scotland, but in some cases they are from private firms. Similarly, the Accounts Commission appoints the auditors of individual local authorities.
Another feature of how we do the audit is the wide scope of audit. Not only do we cover performance issues, which tend to be reported frequently in Parliament, but we cover the corporate governance of public bodies as well as giving an opinion on the financial statements.
How do we report the audits? There is local reporting to local management. I personally encourage the appointed auditors to liaise and work closely with the management of audited bodies. If there are local problems that need to be addressed, they can then be tackled locally without the need for every issue to be reported to the Scottish Parliament or to the Accounts Commission. Those local reports are an important part of the stewardship of the public sector. I may report to the Scottish Parliament at a time of my choosing, and I draw extensively on the local audit work in making those reports to Parliament.
There are two types of report that I can make under the legislation. One category consists of reports that I may make to accompany the laid accounts of an audited body. If there are matters arising from the audit that I feel require a report to be made, I will lay that report at the same time as ministers are laying the accounts, and those reports are notified to the committee. At the back of today's agenda, there is a list of various laid accounts and a few reports are mentioned.
The other type of report that I may make is on value-for-money topics. That is quite a discrete category of report and most, if not all, of the performance audit reports that are listed in the work programme fall into that category. So far, they have tended to be the main diet of information for this committee.
That is the context. I do everything apart from local government, the Accounts Commission looks after individual local authorities and Audit Scotland provides us both with a service. We operate in a joined-up way in doing that. The Audit Scotland work programme is also developed jointly by the Accounts Commission and us after consultation with the Audit Committee and other stakeholders. Caroline Gardner will talk about that in a moment.
I would like to touch briefly on three outstanding pieces of business—significant reports that were laid before the elections and before the end of the previous parliamentary session—that have not been formally considered by the Audit Committee and on which evidence has not been heard.
The first of those outstanding items is a report accompanying the laid accounts of the Scottish Parliamentary Corporate Body for 2001-02, which touched on contract management issues relating to the new Parliament building at Holyrood, about which I had some concerns. Another outstanding item was the issue of individual learning accounts, which is on your agenda for consideration today. The third related to hospital cleaning. Our report on that in the spring received quite a lot of media coverage. That report has been laid in the Parliament, but has not yet been formally considered by the Audit Committee. The committee might want to consider those reports at future meetings.
At this point, I will pass over to Caroline Gardner, who will explain how we put the work programme together and talk about some of its main features.
Caroline Gardner (Audit Scotland):
As Bob Black has said, Audit Scotland covers all public sector services, including the Scottish Executive, the national health service and councils. In choosing what our work programme will be, the question is what to leave out. To help us to set a worthwhile work programme that adds value, we have a number of safeguards in place. The first is a range of criteria that focus on obvious things such as the amount of money spent on a particular service, its impact on members of the public and the evidence that there is room for improvement, based on comparisons in Scotland or elsewhere. Those criteria are publicly available.
We also go through a regular process of consultation with a wide range of people to seek views on what we should be working on. We last carried out that exercise about 12 months ago, when we set out, in a weighty document, a range of suggestions that have come either from people contacting us directly or from our views of where there might be scope to investigate particular areas in more detail. We seek views from this committee, from subject committees and, more widely, from public sector bodies, professional associations and others who have a view on the process. We draw those views together, assess subjects against our criteria and arrive at a work programme that is balanced in that it looks across the public sector, picks up significant issues and is likely to produce worthwhile work that identifies improvements that need to be made to public services.
The paper before you sets out the planned publications that will be produced as a result of that process in the next few months, where we have those dates in place. I am happy to answer any questions on those. It is worth highlighting the two overview reports, one into further education and one into the NHS. Those reports aim to pull together from the range of different audits going on in further education and the NHS either common issues that arise or significant issues that we think that you might want to know more about. Those overview documents are, in a way, summaries of all the audit work that has taken place in those areas in the past year.
The second page of our work programme paper sets out the work that is just getting under way and which we plan to publish reports on in 2004-05. Some of the studies are significant, such as the one on prescribing in hospitals. It is difficult to gather information on that subject and a lot of work has to be done to pull the information together, which is why the lead time is as long as it is. The paper shows what is currently planned, but there is room for flexibility to reflect changing circumstances or the views of the Audit Committee.
We are planning to consult again at the beginning of 2004 on what work we might include next in the audit programme. However, if people have particularly strong views at this stage, we are happy to discuss them informally. I should say that, in addition to the planned work programme, we also have to be able to respond to issues that arise at short notice on particular areas of public concern. You will be informed of such issues over the coming period.