Section 22 Report (Mental Health Tribunal for Scotland Administration)
The next item on the agenda is a section 22 report.
Mr Robert Black (Auditor General for Scotland):
A section 22 report has been prepared on the Mental Health Tribunal for Scotland Administration accounts for 2006-07. I took the judgment that I needed to draw it to the attention of Parliament that the governance arrangements appropriate for such a body were not in place for the agency in 2006-07 and that they needed to be developed as a priority.
The report reminds the committee of what the agency does—it is an executive agency of the Scottish Government that supports the work of the separate Mental Health Tribunal for Scotland. Some 330 publicly appointed tribunal members from various backgrounds take important decisions about the compulsory care and treatment of people with mental disorders.
Back in 2005-06—the antecedent financial year—the auditor highlighted in a report at the end of the year significant gaps in the agency's governance arrangements and recommended improvements. I took the decision that a section 22 report was not appropriate at that stage because the agency was a new organisation and quite a small one; therefore it was entitled to a reasonable period in order to bring its organisation together.
In the 2006-07 audit—of the financial year that ended last March—Audit Scotland carried out a follow-up review of the governance arrangements. The auditors found that although the agency had accepted the need to improve, it had still not made the necessary basic changes to the way in which it directs and controls its work.
The gaps in governance are detailed in paragraph 5 of the section 22 report, but I will highlight them briefly. Each agency requires to have in place a framework document setting out the responsibilities and accountabilities of that agency, but that is still not in place for the body in question two years on. The auditors commented on the urgent need to strengthen financial management in the agency and suggested that it should consider its options, including permanent recruitment. The auditors confirmed that no formal board was in place during 2006-07 to direct and control the agency. That was still the case in August 2007, when they made their report to me. Finally, the agency had no independent non-executive directors and no audit committee in place to provide assurance on risk management, governance and internal control.
I consider it essential that the recommended improvements are made as soon as possible. HM Treasury's "Code of Good Practice Relating to Corporate Governance in Central Government Departments" recommends that a board should be formed to manage the operations of an organisation. It also states that the board should include independent non-executive members to ensure that executive officials are supported and, of course, constructively challenged in their role. An audit committee with independent members is also central to good governance, in order to provide assurances on risk management, governance and internal control. It is the agency's responsibility to make the necessary improvements in those and other areas as quickly as possible. The agency now has an agreed action plan, which has the support of Audit Scotland, with the aim of completing the improvements by January 2008. I have asked Audit Scotland to keep me informed of progress. I look forward to getting an assurance that the important commitments to which I have referred have been implemented satisfactorily within that timescale.
As ever, I am happy to answer any questions, with support from the Audit Scotland team.
I have a simple question. Why were the previous recommendations not implemented?
We do not find it terribly easy to answer that question. The question would be best directed to the relevant department. I find it rather puzzling that it has taken a comparatively small body such as the Mental Health Tribunal for Scotland Administration so long to attempt to put the arrangements in place.
The responsibilities with respect to internal control, internal audit, risk management and so on that are set out in the code of good practice are fairly well established by now, so it is a shock and surprise to discover that the body has not complied with the previous recommendations.
I agree—that is why I felt obliged to make a report this year. Although the body is comparatively small, it should adhere to the standards of governance that are expected across the public sector.
Are you aware whether any progress has been made since the report was completed? I know that you expect to be advised of that early next year, but do you have any interim indications of whether things are moving in the right direction?
I do not have comprehensive information, but the limited information that is available to us is not particularly reassuring. For example, the framework document was due to be in place by now, but it is still not in place. The reasons for that are not clear to us, which is a concern.
Who makes the decision? I am not clear about who is responsible. Is it the Cabinet Secretary for Health and Wellbeing?
In this case, the accountable officer is the accountable officer for health, sport and related matters, Kevin Woods. The president of the tribunal and civil servants are also involved, but ultimately the cabinet secretary must assure himself or herself that appropriate arrangements are in place, through the accountable officer.
Should not the cabinet secretary be informed that the body is in breach of its standing orders?
I am not sure that I am in a position to answer that question. By definition, the Treasury guidance that I mentioned is not mandatory, but it is the accepted good standard for setting up governance arrangements.
This is a quango. Do you have any reason to doubt that the improvements will be completed by early next year? It is amazing that the arrangements are not in place now. Will there be more prevarication? Does the body need a shove?
I am sorry, but I cannot answer that question.
Will you give it a shove?
Unfortunately, that power is not given to me.
As there are no further questions, I thank the Auditor General for his report.
Item 4 will be considered in private. I ask members of the public to leave the room.
Meeting continued in private until 12:36.