Chamber and committees

Thank you, convener, and good morning, gentlemen. I want to follow up a couple of areas in your report that are of interest to me, but I have an overarching question first, because I want to get my head around the process. Audit Scotland undertakes the work of the NFI in Scotland. Is that on behalf of the Public Sector Fraud Authority or are you contracted by the authority? What is your relationship to the body that oversees the UK-wide NFI?

I am trying to get my head around the flow. If you are, say, a Scottish local council, do you pay a fee to participate in the exercise?

I will come on to an example in a second, particularly with regard to housing benefit, but what about any benefits that are recouped? Perhaps I should call them “savings”, given that that is what you are calling them—although I have to say that what you identify as savings seem to be what I would identify as the value of fraud. Nevertheless, we will call them savings for now. The potential upside of councils participating in the initiative is the identification of these so-called savings, but there is no cost or charge to them. Is that correct?

In that same paragraph, you say that savings—to use that term—have increased from around £15 million to more than £21 million in a short space of time. By default, there is an increase in the value of the activity, but that does not necessarily mean that there is an increase in fraudulent activity. It is just about the value.

I guess that where I am heading with all this is that what strikes me about the whole conversation this morning is that perhaps that is where there is a failing in the process. Dealing with that might help you to deal with the issue that you mention in your key messages and to move from saying that it is not clear whether fraud has increased to a position where you can take a more definitive view. Having done the work that identifies the savings and fed all that back to the bodies involved, you could let them do their thing in identifying what is fraud, what is valid and what is erroneous and where there are systems issues or manual issues, and then they could feed that back to you. You could then insert another section in future reports that says, “Having identified the savings, this is what we think the outcomes were.”

I appreciate that that would be an extra piece of work for you and that it might even be outside your statutory requirements, but would that extra piece of analysis give people more confidence in the value of the work that you do? Do you see where I am going?

To be clear, is it your understanding that there is no clawback from local authorities or, indeed, any payments to local authorities from the DWP?

It states here, in an email from you to Mr Satti, who is sitting to your right, that

“the CEO tendered his resignation in December following the pending Section 22 report”.

Was there a causal link between the section 22 report and his resignation?

I am happy to correct the record—I was referring not to the former CEO but to the current COO.

The former CEO resigned as a result of that report. That is what it says in an email from Mr MacRae to you, Mr Satti, on Wednesday 20 March. It states:

“David,

As you are aware, the CEO tendered his resignation in December following the pending Section 22 report from the Auditor General.”

Your view is that the section 22 report was the trigger for his resignation.

You made the link, though. Why is that?