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SP Paper 568


2nd Report, 2006 (Session 2)

Annual Report 2005-06

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)
Susan Deacon
Robin Harper (4 June 2003 - 22 June 2005)
Margaret Jamieson
George Lyon (4 June 2003 - 29 June 2005)
Mrs Mary Mulligan
Eleanor Scott (22 June 2005 - present)
Margaret Smith (30 June 2005 - present)
Mr Andrew Welsh (Deputy Convener)

Committee Clerking Team:

Clerk to the Committee
Shelagh McKinlay

Senior Assistant Clerk
Joanna Hardy

Assistant Clerk
Clare O'Neill

Annual Report 2005-06

The Committee reports to the Parliament as follows—


1. The Audit Committee holds to account those who are charged with spending taxpayers’ money and ensures that public funds are spent wisely. This year the Committee again focussed on reports by the Auditor General for Scotland (AGS).

2. The Committee’s approach to looking at effective implementation of policies is having an observable impact on the delivery of services throughout the public sector in Scotland.

Inquiries and Reports

3. The Committee published 3 reports over the parliamentary year and will publish a further 3 reports early in the next parliamentary year. The following reports were published:

  • Overview of the Financial Performance of the NHS in Scotland 2003/04
  • Bowel Cancer Services
  • Further Education Colleges

In addition to publishing three reports work is underway on four other inquiries:

  • How Government Works:  Supporting new initiatives and leadership development
  • Tackling NHS Waiting Times
  • The 2004/05 Accounts of Inverness College; and
  • Implementing the NHS Consultant Contract in Scotland

The reports of these inquiries will be published after the end of the Parliamentary year.

4. The Committee held four oral evidence sessions as part of inquires into five AGS reports and received briefings from the Auditor General on 17 other reports. The Committee also considered Audit Scotland’s Annual Report 2004/05 and the Corporate Plan 2005-08. The Committee held one evidence session in connection with its information gathering exercise prompted by the AGS report on Scottish Water (see also para 9). The Committee also held its annual evidence session with the  Accounts Commission following publication of its overview report on local authority audits.

NHS in Scotland

5. In September 2005, the Committee took evidence from the Scottish Executive Health Department on its responses to the Committee’s 5th report 2005 “Overview of the Financial Performance of the NHS in Scotland 2003/04” and 1st report 2005 “The 2003/04 Accounts of NHS Argyll and Clyde”. This was the first time the Committee has held an oral evidence session examining in detail a Scottish Executive response to its reports.

6. This year, the Committee has continued to devote considerable time to issues affecting the NHS in Scotland. The Committee undertook an inquiry into the AGS overview report on the financial performance of NHS Scotland. In June 2005 the Committee published its report which found that the Health Department had failed to secure real improvements on core issues such as improving the quality of information and spreading good practice. The Committee also examined the new contracts being brought in for GPs and NHS staff, known as pay modernisation.  The Committee found that: costs were not adequately modelled; benefits to patients remained unclear; it was not clear how its impact would be evaluated; and expressed concern that the contracts do not properly reflect Scotland’s needs.

7. Also on the subject of health, the Committee undertook an inquiry into bowel cancer services. The Committee was pleased to note the good progress being made in this area and that most bowel cancer patients in Scotland were receiving high quality well coordinated care. However, the Committee also expressed concern that the waiting time target for patients referred on an urgent basis was unlikely to be met. 

Further Education

8. In June 2005, the Committee took evidence on three section 22 reports on three Further Education Colleges: Lews Castle College, West Lothian College and Inverness College. The Committee considered the financial implications of the PFI contract at West Lothian College and continues to monitor developments on this issue. In relation to Lews Castle the Committee noted the additional costs of providing further education facilities at remote colleges and welcomed the additional funding provided by the Funding Council following its remoteness review. The Committee expressed concern at Inverness College’s failure to keep to its financial recovery plan and sought assurances that proper cost controls were put in place to ensure financial recovery.  The AGS has since published a further section 22 report on the accounts of Inverness College for 2004/05 after the College again recorded a deficit and the Committee is currently conducting an inquiry on this issue. (See also para 13)

Scottish Water

9. The Committee has also held one information gathering exercise on the overview report on the Water industry in Scotland. In January 2006, the Committee took evidence from Scottish Water and the Water Industry Commission on Scottish Water’s performance, and the relationship between Scottish Water, the Water Industry Commission, the Competition Commission and the Scottish Executive. Given the high profile nature of the issues raised in the report, the Committee wished to hold a public evidence session to inform public debate.

Ongoing inquiries

10. At the time of writing, the Committee has four ongoing inquires. In February, the Committee took evidence from the Scottish Executive Permanent Secretary, in relation to the AGS reports on supporting new initiatives and leadership development. The Committee will publish its report in late May.

11. In March 2006, the Committee took evidence from the Health Department and the Golden Jubilee National Hospital on its inquiry into waiting times in the NHS in Scotland. The Audit Committee took the opportunity to meet at the Golden Jubilee National Hospital and to see at first hand the facilities available to inform its report.

12. The Committee has also agreed to hold an evidence session on the AGS report on the implementation of the consultant contract by the NHS in Scotland.  The Committee will take evidence from the Head of the Scottish Executive Health Department in late May.

13. The Committee is currently undertaking an inquiry on the section 22 report on Inverness College’s accounts for 2004/05. On 9 May 2006, (just after the end of the parliamentary year) the Committee took evidence from the College management and the Scottish Funding Council in Inverness and plans to hold a further evidence session with the Scottish Executive at a future meeting. The Committee expects to publish its report before the summer recess.

Visit to Denmark

14. On 26 September 2005, 3 members of the Audit Committee, the Convener of the SCPA and the Auditor General for Scotland visited the Danish Parliament and met with members of its PAC and the Danish Auditor General and representatives from the National Audit Office of Denmark (NAOD). During the visit members met with the Danish PAC to discuss responsibilities and working practices of their respective committees.

Subordinate Legislation, Bills and Petitions

15. The Committee did not consider any subordinate legislation, bills or public petitions during the parliamentary year.


16. The Committee met 15 times between 7 May 2005 and 6 May 2006. 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. Of the 15 meetings, 14 included some private, agenda items and one was entirely in private.

17.  The Committee held one external meeting in Clydebank, the remainder were held in Edinburgh.