Chamber and committees

We are now in the final stretch of our evidence session, and I invite Graham Simpson to put some questions to you.

Good morning. I welcome everyone to the fifth meeting in 2024 of the Public Audit Committee.

The first item on our agenda is to agree to take agenda items 4, 5, 6 and 7 in private. Are we agreed?

Members indicated agreement.

We will want to go through the report in some detail but, first of all, I note that you mentioned towards the end of your remarks that the recommendations have been accepted and specific actions will be implemented. Can you give us an overview of those actions?

This section 22 report is based on a wider-scope audit of the year 2022-23. In paragraph 10, you capture some of the concerns that you have identified as

“widespread issues with expense claims”,

Including lack of “itemised receipts” and the purchase of alcohol “exceeding the approved rates”. Such matters are cultural and behavioural, so the other question that immediately comes to mind is whether they predate this year or whether what would seem to be sensible governance arrangements and expenses regimes were suddenly abandoned at the beginning of April 2022.

Thanks. Willie Coffey has some questions.

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.

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.

Willie Coffey has a final question.

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.

Before we leave the subject of improvement notices, you referred in paragraph 29 of the report to an improvement notice that was served in May 2022. You said that the notice

“also highlighted significant issues in relation to the accuracy of verified data to assure SPS that billing information is correct.”

That rang an alarm bell for me and reminded me of instances—south of the border, admittedly—in which Serco and G4S had responsibility for community payback schemes and were charging the Government for prisoners whom they claimed they were tagging who were either dead or back in prison. Is anything of that sort of order going on here?