Chamber and committees

Okay. Thank you very much indeed. I am sorry that there has been an air of rushing in the session. As the deputy convener remarked, your report is comprehensive and has given us a lot of evidence to consider. We will also consider whether we might want to invite more witnesses to give us their views on your findings in the annual section 23 audit of the NHS.

Auditor General, thank you very much for your evidence. I also thank Cornilius Chikwama, Leigh Johnston and Martin McLauchlan.

Mr Rathjen, I want to go back to you, because I feel as though you are almost misleading the committee. You said that you believed that it was an error of judgment and that you thought that what was going on was not acceptable, but when I read the email that you sent, I see that you said things like,

“I am grateful for the opportunity to comment ...On the Christmas gifts I accept this was an oversight and do not think it is proportionate to try and recover the balance ... On the training costs, I rather agree that this is a unique training offering and can see why single tender was your approach ... I would have agreed with the approach ... Due diligence had been carried out”.

That does not tell me that you are challenging the decision; it tells me that you are going along with it. You are complicit in what many people who are looking at the matter now would understand to be a waste of public money.

Thanks, director general. Over to you, Mr MacRae.

Thank you. On that last point, it would be useful to have sight of the actions that you have undertaken and understand the progress that you have made on those. It would be helpful for the committee to see that.

I hear what has been said about the role of WICS and what it has done to bring in extra revenue, but the focus of the section 22 report is on conduct, behaviour, appropriate action and so on. I think that reference was made to the governance framework, which, as I understand it, was last reviewed in April 2022. Kind of ironically, that is the start of the period that is under scrutiny by Audit Scotland, which has turned up some quite concerning findings.

The Auditor General description to us of WICS’ arrangements was of

“significant weaknesses in financial management and governance”.—[Official Report, Public Audit Committee, 8 February 2024; c 2.]

He believed that those fell “far short” of what was expected. He identified issues that really stood out for him because he had never or rarely seen the like before in a public body. We will get into some of that this morning.

However, if

“Governance is the over-arching structure and strategy that provides accountability and direction, and influences the behaviours and culture within WICS”,

which is the very first sentence of WICS’ governance framework, how have we got to the situation that is reported in this section 22 report?

Mr Rathjen, there is doubt precisely about whether it was in force. I do not think that there is any doubt that it was on the website. I do not think that there is any doubt that a written document exists. However, there is a huge question mark over whether the standards of governance, the standards of behaviour and the systems that were in place match up to the intention that is set out in the governance document.

I will bring in other members of the committee but, before I do, I want to check something off with you. The introduction to the governance framework, which was reviewed in April 2022, says that the power of the Scottish ministers to direct the Water Industry Commission for Scotland

“is confined to matters relating to the WICS’ financial management and administration.”

Has a minister been involved in what has happened here?

But she was not involved, for example, in signing off the authorisation that Mr Rathjen gave to the £77,000 Harvard Business School course.

Okay. I invite Colin Beattie to put some questions to you.

Maybe the director general could answer that.

Okay.

Okay.