Audit Scotland (Annual Report 2005-06)
Item 4 is to receive a briefing from the Auditor General on Audit Scotland's annual report for 2005-06. I advise members in advance that, to make up time, I will try to compress items 5 and 6.
I never thought that I would say this, but presenting an annual report comes as light relief after the previous item. I hope that the committee agrees with that sentiment.
I am genuinely pleased to present to the committee our latest annual report, which is being sent to the Scottish Commission for Public Audit, together with our full audited accounts, in accordance with the Public Finance and Accountability (Scotland) Act 2000. In due course, the SCPA will publish our accounts and lay them before the Parliament and in September it will meet us to conduct its annual review of our performance. Those scrutiny arrangements, which are governed by good statutory provisions, are important because they ensure that Audit Scotland is held to account in an appropriate and robust manner.
There is another straightforward point that I would like to make. Sometimes it is easy to forget what Audit Scotland is. Audit Scotland was established by the Parliament with one sole purpose—to provide services to the Auditor General and the Accounts Commission. I am not an employee of Audit Scotland, nor is the Accounts Commission; we take services from Audit Scotland. In a sense, I hold the organisation to account for the services that it provides. However, the Parliament thought it appropriate that I should be the accountable officer for Audit Scotland because, in effect, I direct what happens in the organisation. Although the set-up is complex, it works quite well. I thought that it would be useful to remind people of that.
I will summarise some of the key messages from the report on what, as the committee knows, was a busy year. Audit Scotland secures the audit of almost 200 public bodies, which spend about £27 billion of public money in Scotland. Our publication of 234 reports on public bodies over the year represents a significant volume of activity.
The best-value regime covers local government. For the Accounts Commission, Audit Scotland delivered best-value reports on eight councils. That system is now firmly established and will continue to develop. We published integrated overview reports on the national health service and local government. As the committee knows, I believe that such reports could provide robust evidence for parliamentary scrutiny of major spending programmes.
We published 38 performance audit reports, which included complex cross-cutting reports on subjects such as delayed discharge in Scottish hospitals and council housing transfers. We considered how entire systems were operating. Although the 196 annual audit reports that we produced on individual public bodies in Scotland are not presented formally to the Parliament, they form an extremely important part of Audit Scotland's output because they capture the significant audit issues that arise in local bodies. Increasingly, that vital work is based on our modernised audit process, which seeks to concentrate on the big risks and performance issues in individual public bodies and to provide assurance on financial management and reporting.
There are two other projects that I would like to mention. First, a major retendering exercise was completed successfully, as part of which we awarded audit appointments to Audit Scotland and a number of private firms that will work closely with us over the next five years on the auditing of the 200 or so public bodies. Secondly, as the committee will recall from a previous meeting, Audit Scotland delivered the national fraud initiative, which found £15 million of overpayments and savings in Scottish local authorities.
We will continue to ensure that our work achieves the twin objectives of holding bodies to account and helping them to improve, either through our overview reports or our specific studies. I believe that independent public audit has a key role to play in offering assurance to the public on governance and the effectiveness of public services. By providing independent challenge and evidence of best practice, we also encourage improvement.
As part of Audit Scotland being held to account by the Parliament, it is important that I should ask the organisation to make every effort to present its annual report to the committee and to get our accounts into the hands of the SCPA before the Parliament rises for the summer recess each year. I thank my colleagues in Audit Scotland not only for their work on the annual report but for the excellent work that they have done and the commitment that they have shown over the whole of the past year. Their hard work and professionalism do not often receive public acknowledgement, so it is a pleasure for me to thank them in public today.
As ever, I will be happy to answer questions. Diane McGiffen, who is master of all the detail in the annual report, is here to help me.
Very good. The floor is open to members.
I thank the Auditor General for the report. I am pleased to see the breadth, depth and range—and all such things—in the work that Audit Scotland continues to do. You referred again to Audit Scotland's twin objectives of holding to account and helping to improve. I suspect that we asked you the question that I am about to put last year, but I will ask it again.
Looking to the future, what are your plans for doing more to further your objective of helping to improve, not only at the local level but nationally? I see a connection between the issue and our earlier discussion on community planning. As an organisation, Audit Scotland now has a remarkable insight into what is going on right across Scotland in many of our key public services and areas of investment. I am sure that you will have been thinking about the ways in which you can draw on that learning and use it to further improve services, locally and nationally.
Yes. I agree that the issue is extremely important—indeed, I take personal satisfaction in that. We have been reasonably successful in recent years in highlighting what works best and what does not work terribly well. There are a number of different levels to our work in this area, the first of which relates to the national reports that are produced in my name and laid in Parliament. As the committee knows, in those reports we often refer to the good practice that seems to work well. We attempt to promulgate and promote that practice across the public sector—by and large, we find the reports are welcomed for that.
At the next level down—the level could be said to support our formal reports—we produce occasional pieces of work that are designed to assist managers in local bodies to manage their resources well. For example, some of the work that we did on delayed discharge was done at this level. Behind the report that was made to the Parliament, some very interesting work was done on systems issues that needed to be addressed locally. Our Audit Scotland people interacted extensively with the relevant health service managers in doing that work. Another, more recent, example is the guidance that we provided to community health partnerships on their planning function. Of course, their work impacts very much on community planning and local government.
The next level is the level at which some very promising and exciting developments are being made. As we modernise the audit of the 196 or so public bodies, we are getting a much better sense of their key priorities and of where the performance weaknesses and risks are. As you say, given that we are involved in each and every public body in Scotland, we have a unique insight into where things are being done well. Increasingly, I envisage that we will take that good practice, encourage our auditors to communicate well with one another and share information across the system.
Having seen the potential to do that, we have reorganised Audit Scotland into specialist sector groups. We now have groups of staff—both those working to Caroline Gardner on performance audit and those working on financial audit—who specialise in areas such as the health service and local and central Government. If our people who do health service audits understand the business well, they are much better equipped to be confident in identifying good practice and translating it across the service.
That is very helpful. Thank you.
Even at first glance, we can see the massive range of investigations and reports in which Audit Scotland has been involved. Certainly, Audit Scotland is producing commonsense solutions to complex problems. You are also encouraging greater efficiency and effectiveness in our public bodies. I believe that Scotland is much the better for the presence of Audit Scotland and for its work on our behalf. I thank the staff for all they have done.
Thank you.
As there seem to be no further questions or comments, I thank the Auditor General for briefing us on the annual report. I am sure that I am not saying anything out of turn, or stepping on anyone's toes, in saying that the committee greatly appreciates the work of all Audit Scotland's staff in producing the reports that so inform our work.