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Chamber and committees

Official Report: search what was said in Parliament

The Official Report is a written record of public meetings of the Parliament and committees.  

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Dates of parliamentary sessions
  1. Session 1: 12 May 1999 to 31 March 2003
  2. Session 2: 7 May 2003 to 2 April 2007
  3. Session 3: 9 May 2007 to 22 March 2011
  4. Session 4: 11 May 2011 to 23 March 2016
  5. Session 5: 12 May 2016 to 4 May 2021
  6. Session 6: 13 May 2021 to 8 April 2026
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Displaying 3919 contributions

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Public Audit Committee

Section 22 Report: “The 2023/24 audit of the Water Industry Commission for Scotland”

Meeting date: 9 January 2025

Richard Leonard

Thank you for the evidence that you have provided to the committee. Some important matters have been placed on the public record, including revelations that—dare I say it—perhaps give us a bit more evidence than is contained in the section 22 report itself. Auditor General, I thank you, Carole Grant and Richard Smith for your time and for the information that you have given us.

I move the committee into private session.

10:38 Meeting continued in private until 11:19.  

Public Audit Committee

Decision on Taking Business in Private

Meeting date: 9 January 2025

Richard Leonard

The second item on our agenda is for the committee to consider whether to take agenda items 4 and 5 in private. Are we agreed to do so?

Members indicated agreement.

Public Audit Committee

Section 22 Report: “The 2023/24 audit of the Water Industry Commission for Scotland”

Meeting date: 9 January 2025

Richard Leonard

When you gave evidence to us in the equivalent session in February of last year in relation to expenses and so on, you said:

“We do not see that type of activity in other audits.”—[Official Report, Public Audit Committee, 8 February 2024; c 29.]

Last year, we were dealing with a section 22 report with an almost unheard of list of questions about the way in which the organisation was conducting itself, the way it was allowing governance arrangements to drift, allowing the expenses regime to be run and allowing unreceipted claims to be processed. We are still in that territory in this year’s audit, are we not?

Public Audit Committee

Section 22 Report: “The 2023/24 audit of the Water Industry Commission for Scotland”

Meeting date: 9 January 2025

Richard Leonard

I want to go back to something quite extraordinary that you told us a few minutes ago. You said that the limit on expenses—presumably for travel, subsistence and business entertainment, as WICS has previously described it—was not adjusted, but removed altogether by the former chief executive officer, who was the accountable officer. Was that approved by anybody—the chair of the board, the chair of the audit and risk committee, the sponsor division, or the deputy director? After all, the committee’s concern throughout much of this has been not just that these things happened, but that they were allowed to happen.

Public Audit Committee

Section 22 Report: “The 2023/24 audit of the Water Industry Commission for Scotland”

Meeting date: 9 January 2025

Richard Leonard

Why then, within two years, was a revision proposed to that contract?

Public Audit Committee

Section 22 Report: “The 2023/24 audit of the Water Industry Commission for Scotland”

Meeting date: 9 January 2025

Richard Leonard

One of the other things that strikes me about this is that the initial contract from 2005—which provided the basis for the departure of the former chief executive—gave a contractual entitlement to six months’ pay or salary on resignation, but provided 12 months’ pay or salary in the event of dismissal. Under those terms, it is conceivable that somebody in that position could be sacked for gross misconduct and be entitled to more notice pay than somebody who had handed in their resignation. It is extraordinary. I have never seen anything like that before in my life.

10:15  

Public Audit Committee

Section 22 Report: “The 2023/24 audit of the Water Industry Commission for Scotland”

Meeting date: 9 January 2025

Richard Leonard

Thank you very much. I will begin by speaking about key message number 1, which is that

“The appointed auditor issued a qualified regularity opinion on the 2023/24 audit”.

How many public bodies do you audit, and how often do you issue that kind of qualification?

Public Audit Committee

Section 22 Report: “The 2023/24 audit of the Water Industry Commission for Scotland”

Meeting date: 9 January 2025

Richard Leonard

I move on to the substantive part of the committee’s agenda this morning, which is consideration of the Auditor General’s section 22 report into the Water Industry Commission for Scotland.

I am pleased to welcome our witnesses, and to wish them a happy new year. We are joined by Stephen Boyle, the Auditor General for Scotland. Alongside the Auditor General is Carole Grant, an audit director at Audit Scotland, and Richard Smith, a senior audit manager at Audit Scotland.

We have a number of questions to put to you on the report. However, before we get to those, I invite the Auditor General to give us a short opening statement.

Public Audit Committee

Section 22 Report: “The 2023/24 audit of the Water Industry Commission for Scotland”

Meeting date: 9 January 2025

Richard Leonard

In the past 12 months, for example, how many qualifications have you considered it necessary to issue?

Public Audit Committee

Section 22 Report: “The 2023/24 audit of the Water Industry Commission for Scotland”

Meeting date: 9 January 2025

Richard Leonard

Graham Simpson will drill into those areas in a little more detail, but just for clarity, are you saying that all that type of activity—that non-compliant activity—stopped on 31 December?