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SP Paper 346


4th Report, 2005 (Session 2)

Annual Report 2004-05

Remit and membership


1. The remit of the Audit Committee is to consider and report on-

(a) any accounts laid before the Parliament;

(b) any report laid before or made to the Parliament by the Auditor General for Scotland; and

(c) any other document laid before the Parliament concerning financial control, accounting and auditing in relation to public expenditure.

2. No member of the Scottish Executive or junior Scottish Minister may be a member of the Committee and no member who represents a political party which is represented in the Scottish Executive may be convener of the Committee.

(Standing Orders of the Scottish Parliament, Rule 6.7)

Mr Brian Monteith (Convener)
Rhona Brankin (4 June 2003 - 27 October 2004)
Susan Deacon
Robin Harper
Margaret Jamieson
George Lyon
Mr Kenny MacAskill (Deputy Convener) (4 June 2003 - 21 September 2004)
Mrs Mary Mulligan (28 October 2004 - present)
Mr Andrew Welsh (Deputy Convener) (23 September 2004 – present)

Committee Clerking Team:

Clerk to the Committee
Shelagh McKinlay

Senior Assistant Clerk
David McLaren

Assistant Clerk
Clare O'Neill

Annual Report 2004-05

The Committee reports to the Parliament as follows—


1. This Report covers the work of the Audit Committee during the Parliamentary year from 7 May 2004 to 6 May 2005. The Audit Committee holds to account those who are charged with spending taxpayers’ money and ensures that public funds are spent efficiently and effectively. In practice the Committee’s work focuses on consideration of reports by the Auditor General for Scotland. This past year has seen the Committee consider an increasing number of section 22 reports concerning the audit of accounts of public bodies. The Committee has also continued its commitment to examine areas of major public expenditure such as the NHS in Scotland, by building on the overview work undertaken by the Auditor General for Scotland. Details of these inquiries are set out below.

Inquiries and Reports

The Committee published 5 reports over the course of the parliamentary year and will publish a further 2 reports early in the next parliamentary year. Details of the reports published are set out below:

Report on Community Care

The 2003/04 Accounts of NHS Argyll and Clyde

Better equipped to care? Follow-up report on managing medical equipment

Overview of the National Health Service in Scotland 2002-03

The 2002-03 Audit of the Scottish Parliamentary Corporate Body

The Committee held 9 evidence taking sessions on 6 Auditor General for Scotland reports and received 20 briefings from the Auditor General on other reports.

NHS in Scotland

2. The Committee has devoted considerable time to issues affecting the NHS in Scotland. Consideration of NHS Overview Reports published by the Auditor General for Scotland has enabled the Committee to take a wider perspective on performance and financial management in the NHS in Scotland, including detailed scrutiny of the implementation of pay modernisation. The Committee has also considered AGS reports on issues such as managing medical equipment ; the processes involved in developing and implementing cross-cutting policies such as commissioning community care for older people and the management of community equipment and adaptations; and financial and wider management issues within NHS Argyll and Clyde. In January 2005 the Committee also took evidence on the AGS Overview Report on the Financial Performance of the NHS in Scotland for 2003/04 and is due to publish a report on this inquiry early in the next parliamentary year.

3. In conducting these inquiries the Committee has identified a number of recurring themes including: poor quality performance and financial information; a lack of focus on monitoring performance and evaluating outcomes; and the need for a more coherent vision of how change will be driven including providing better incentives for improving performance. The committee’s work in this area led it to conclude that the Health Department was not in a position to measure whether planned efficiencies would be delivered; whether the benefits of pay modernisation would be achieved and whether the services to patients will improve as a result. The Committee will continue to scrutinise performance and financial management issues in this significant area of public expenditure in the coming parliamentary year.

Holyrood Building Project

4. In June, the committee received a full and detailed briefing from the Auditor General for Scotland on his report into the management of the Holyrood building project. At the same meeting, the committee took the unusual step of taking evidence from the Accountable Officer prior to deciding whether to hold an inquiry, in order to determine why the content of the report had not been factually agreed. The Committee agreed to consider its approach to the AGS report following the publication of Lord Fraser’s report into the Holyrood building project. At its meeting on 28 September 2004, t he Committee agreed that Lord Fraser’s report effectively addressed the issues of concern raised by the Auditor General for Scotland and considered that conducting a further inquiry would represent duplication of effort without adding to the information already in the public domain. However, the Committee will continue to scrutinise Auditor General for Scotland reports and other laid documents on issues such as procurement and management within the civil service and the Scottish Parliament.

SPCB Accounts

5. Also in June, the Committee concluded its inquiry into the 2002-03 Audit of the Scottish Parliamentary Corporate Body and produced a report which acknowledged that a series of system failures, accompanied by flaws in working relationships and the introduction of a new accounting system, led to the qualification of the Scottish Parliamentary Corporate Body’s accounts.

National Galleries of Scotland

6. In December, the Committee agreed to hold an inquiry on the 2003/04 Audit of the National Galleries of Scotland. The Committee sought to examine the reasons behind the National Galleries of Scotland’s decision to transfer funds from its Purchase Grant to support running costs and the implications of this for the National Galleries of Scotland’s acquisitions policy. The Committee took evidence from Accountable Officers from the Scottish Executive Education Department and the National Galleries of Scotland and will publish its report early in the next parliamentary year.

Visit to Westminster

7. In June 2004, members together with the Auditor General for Scotland and a representative from Audit Scotland, visited the House of Commons and met with members of the Committee of Public Accounts and representatives from the National Audit Office. This visit was arranged in order to explore issues of mutual interest and build relationships with counterpart Committees. The Committee has agreed to undertake similar visits in the future.

Bills and Petitions

8. The Committee did not consider any bills or public petitions during the parliamentary year.

Subordinate Legislation

9. During the parliamentary year the Committee considered one Scottish Statutory Instrument which was subject to negative procedure. This instrument added more organisations to the list of public bodies on whom the Auditor General for Scotland is empowered to conduct “three E’s” examinations and came into force on 17 December 2004.


10. The Committee met 24 times between 7 May 2004 and 6 May 2005. Of these meetings, 19 were partly in private, and 5 were entirely in private. The majority of Committee time was spent in public session only meeting in private to consider items such as lines of questions for witnesses, arrangements for inquiries and consideration of draft reports. All of the meetings were held in Edinburgh.