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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 2022/23 audit of the Water Industry Commission for Scotland”

Meeting date: 8 February 2024

Richard Leonard

Thanks. Willie Coffey has some questions.

Public Audit Committee

Section 22 Report: “The 2022/23 audit of the Water Industry Commission for Scotland”

Meeting date: 8 February 2024

Richard Leonard

But if the audit committee is charged with responsibility for the effectiveness of the internal control environment, does that not suggest that it should be on top of that? It should be asking questions and seeking further information.

Public Audit Committee

Section 22 Report: “The 2022/23 audit of the Water Industry Commission for Scotland”

Meeting date: 8 February 2024

Richard Leonard

Okay. I am sure that we will pick up that sponsor division responsibility, because, in the words of your report, there were

“significant weaknesses in the governance and financial management arrangements”,

and that the commission fell “far short” in that regard. This committee does not often see a report from you that is as clear and as condemnatory as the one that we are discussing today.

I will move on to Colin Beattie.

Public Audit Committee

Section 22 Report: “The 2022/23 audit of the Water Industry Commission for Scotland”

Meeting date: 8 February 2024

Richard Leonard

Willie Coffey has a final question.

Public Audit Committee

Section 22 Report: “The 2022/23 audit of the Water Industry Commission for Scotland”

Meeting date: 8 February 2024

Richard Leonard

That is quite a shocking note to finish on. As a reminder, I would point out that the statutory duties of the organisation that we are talking about include ensuring that

“customer charges reflect the lowest reasonable overall cost for Scottish Water”

and that its job is to challenge Scottish Water

“to become more efficient and sustainable”.

An organisation with those responsibilities really ought to lead by example, and I am not sure that we have heard that it does.

I thank the Auditor General for the evidence that he has provided, and I thank Richard Smith and Carole Grant for their valuable input. Thank you for being resourceful in your very helpful answers—we will be following up on some things.

I now draw the public part of the committee’s work to a close and move us into private session.

10:34 Meeting continued in private until 11:35.  

Public Audit Committee

Section 22 Report: “The 2022/23 audit of the Water Industry Commission for Scotland”

Meeting date: 8 February 2024

Richard Leonard

Before we leave the question of governance, what role do you see for, and what part has been played by, the board? When I look at the audit and risk committee’s list of responsibilities, it includes

“the strategic processes for risk, control and governance ... adequacy of management response to issues identified by audit activity, including external audit”,

and

“the effectiveness of the internal control environment”.

Has it measured up to its responsibilities?

Public Audit Committee

Section 22 Report: “The 2022/23 audit of the Water Industry Commission for Scotland”

Meeting date: 8 February 2024

Richard Leonard

Is there a transparency issue here in relation to, first of all, the previous point about what contact was made between the executive directors, non-executive directors and the chair of the board, which the deputy convener referred to, and the Scottish Government? Is that in the public domain? Is it possible to understand what form that took?

Secondly, in quite a number of the answers to the deputy convener’s earlier questions about the role of the board and so on, you said that we do not know what the board knew when, but the board publishes minutes, does it not? Is there a transparency issue that the minutes of the board do not sufficiently represent what was discussed at board meetings?

Public Audit Committee

Section 22 Report: “The 2022/23 audit of the Water Industry Commission for Scotland”

Meeting date: 8 February 2024

Richard Leonard

Auditor General, will you comment on the fact that the senior finance person—the head of finance—does not sit at director level? There are four directors, but there is no director of finance. Is that unusual in an organisation such as this?

Public Audit Committee

Section 22 Report: “The 2022/23 audit of the Water Industry Commission for Scotland”

Meeting date: 8 February 2024

Richard Leonard

The wider-scope audit report suggests that the lack of itemised receipts related to “business entertaining costs”. What constitutes such costs?

Public Audit Committee

Section 22 Report: “The 2022/23 audit of the Water Industry Commission for Scotland”

Meeting date: 8 February 2024

Richard Leonard

The framework document, which was last reviewed in April 2022—in other words, at the start of the period—contains a section on gifts and hospitality, although I think that that relates to the board of directors rather than to staff. It covers the circumstances under which people need to record accepting or receiving gifts and so on; it does not cover giving gifts and hospitality. What is the policy on giving those versus receiving them? Were some of those expenses incurred by board members, or did the chief executive incur almost half of them, or more than that, while the rest were incurred by other members of staff?