Audit Scotland

A lot has happened since my last blog, and it’s fair to say that Scotland’s new financial powers won’t have been top of the list of political developments for many of us over the last few days. Yet however events unfold in the months to come, the state of the country’s public finances is likely to be even more important, and the need for effective scrutiny even greater.

The new session of the Scottish Parliament delivers a new opportunity to focus on scrutiny and improvement of public services, as well as new faces and new priorities. The biggest change for me as Auditor General is working with a new Public Audit Committee (PAC). The committee’s membership is smaller this time around, down from nine MSPs to seven, but it’s great to see that the gender balance of the group is even, with four female MSPs on board, including the new convener and deputy convener.

The PAC will also have a wider remit in this session, with the addition of post-legislative scrutiny to its responsibilities. It’ll be interesting to see how that new role develops in the future, and to explore how our audit work can support the committee in this area.

I’ll report to the new PAC for the first time tomorrow, starting with a briefing for members on my latest update on the Scottish Government’s Common Agricultural Policy Futures Programme. I highlighted a number of concerns with the management and delivery of the programme, particularly with the IT project designed to process funding applications from Scotland’s farmers and rural businesses. Challenges remain with the project as it continues to work towards key deadlines and we’re monitoring progress, and the impact on the Scottish budget, through our annual audit of the Scottish Government’s accounts.

I’ll then give evidence on my March report on Changing Models of Health and Social Care. This report highlighted the growing need for Scotland’s health and social care services to create new ways of working, and adapt to increasing pressures. Stronger leadership is needed to achieve this, underpinned by clear, long-term planning by the Scottish Government. Health and social services are used by all of us at some point in our lives, and I expect that the committee will be keen to spend some time exploring the issues raised in my report.

At the core of both of these reports is the implementation of reforms in the public sector. As we highlighted in Audit Scotland’s 2015/16 annual report, tracking the impact of reform across public services has been a key focus of our audit work in recent years, from looking at college mergers, to examining the creation of a single police service for Scotland.

And there’s more to come, with the new financial powers for the Scottish Parliament set to have a considerable impact on how public money is managed and spent. Audit Scotland has already produced in-depth reviews of the implementation of devolved taxes delivered under the Scotland Act 2012, and we’re currently planning our next report on managing the new powers.

It’s essential that the Parliament and the public have the information they need to understand the big choices and challenges underway in public services, so Audit Scotland has committed to making our work as transparent as possible. If you’d like to know more about how we contribute to the Parliament, you can tune in and watch the PAC session live from 9am.

About the author

Caroline Gardner is the Auditor General, and Accountable Officer for Audit Scotland. She started her term in July 2012, and has 30 years’ experience in audit, governance and financial management. Follow her on twitter @AuditorGenScot

 

Our new Code of Audit Practice marks an exciting step change in the responsibilities of auditors looking at spending and services by public bodies in Scotland. Following an extensive consultation, these changes will come into force from the start of the 2016/17 audit appointments in October.

Two years ago we recognised that if we wanted to deliver a world class public audit service, we’d need to revise and improve the code. The challenge was to produce a code  grounded in legislation and auditing standards but which could also be applied by auditors to the wider scope of  public audit  and the developing approach to the audit of Best Value.

We also knew that Scotland’s public sector was undergoing a significant period of change and by revising the code we’ve set out to ensure our work adds more value and makes a real difference to public services in Scotland. It requires auditors to comply with professional and ethical standards, and sets out in detail their responsibilities, and those of audited bodies. It also sets the strategic direction of all audit work carried out for the Auditor General for Scotland and the Accounts Commission.

In order to achieve world class public audit and give reassurance that we’re all receiving value for money from public spending, the new code aims to assist improvement by audited bodies in the delivery of services. It does this by requiring auditors to use their work to provide explicit conclusions on four key aspects: financial sustainability, financial management, governance and transparency, and value for money.

Reporting against these dimensions means that auditors must be clear when highlighting significant risks within audits that they also provide a judgement on how effectively the audited body is mitigating these risks. Clarity about the potential impact of risks and making recommendations for improvement creates an enhanced understanding for the organisation and the public of how an audited body is performing.

The code also formalises the commitment of auditors to sharing knowledge and resources, giving an enhanced ability to address audit risks. This means financial and performance auditors working together to maximise the value and impact of public audit for service delivery.

Appointed auditors also have an option to carry out a reduced wider scope audit for low risk small audits. This maximises available audit resources, enabling a greater focus on higher risk audits. Our work is, however, firmly grounded in legislation and auditing standards. Compliance with the code is a condition of appointment for auditors appointed by the Auditor General or the Accounts Commission.

And continuing our commitment to making our audit work as transparent and accessible as possible, we’ll be publishing all our principal audit reports, such as annual audit plans and final reports, on our website.

The new code equips auditors with the information and structure they need to carry out their role effectively within the changing landscape of public finances and services. Building on our independent and authoritative reputation within Scotland’s public sector, the code helps to ensure a strong and effective system of financial accountability and transparency with public audit at its centre.

About the author

Owen Smith is a senior manager in Audit Scotland’s audit strategy group. He is responsible for audit procurement, audit quality and the National Fraud Initiative (NFI) in Scotland. He has been working in public audit since 1997 and been with Audit Scotland since its creation in 2000 working mainly in local authority audits. He is currently finalising the 2016 NFI report.

All 32 of Scotland’s councils publish a wealth of information through their annual accounts. They can tell you everything from how much your council spent on social work or education to the value of their buildings and what reserves they have built up over time. The Accounts Commission’s report ‘An Overview of Local Government in Scotland 2016’ presents a high level view of how councils manage finances.  But getting more specific information that compares spending over time or between different councils from published accounts can be difficult and time consuming. To help, we’ve produced an interactive exhibit which makes these comparisons easy.

Councils make decisions about how best to manage their finances and these will be influenced by various local factors, including local priorities, the size and nature of the area they serve – be it rural or urban – and their local assets and infrastructure.. . For example, councils that still own council houses will generally spend a greater proportion of total spending on housing. This means that comparing some items from the accounts, and some councils to each other, might not be as useful as you first think. All 32 councils, however, need to provide certain core services and looking at how spending on services varies between councils, and within each council over time, can be a useful way of seeing how they are managing their priorities and money.

In this year’s interactive exhibit we have focused on council spending on services: what they spent in total on each of their main services (gross spend) and what they spent after  grants and service charges were taken into account (net spend). By clicking on a particular service you can see how spending has changed over time. You can also look at these changes in real terms, where the figures have been adjusted for inflation, to show what the earlier amounts would have been worth in 2014/15. Comparing these figures over time can provide a useful insight into how your council has managed its budget in a period of reducing public spending.

We intend to update this information as we receive new figures (2015/16 figures will be added once they are available later this year). We have focused on one particular part of the accounts but we’re keen to hear what you think is missing and what you think we should consider including in the future.

About the author

Martin Allan is an audit officer with Audit Scotland’s Performance Audit & Best Value group. Before joining the organisation he worked in statistics in the English civil service – first in the Department for Business, Innovation & Skills, then in the Department for Environment, Food and Rural Affairs (DEFRA).

Holyrood meets for the first time today, and it’s set to be an interesting few weeks as the new Scottish Parliament comes into focus.

It’s clear that the new Parliament will be different from the last. As well as welcoming new MSPs and preparing for the fifth session to officially open on 2 July, the months ahead will bring big changes in Scotland’s public finances as the Parliament takes on a substantial increase in its financial powers.

Given the very different manifesto commitments from each of the political parties, there will continue to be a debate about the use of these powers over the life of the new Parliament – in particular, whether to use its new tax powers, and how to use any revenues raised by them.

This new chapter in Holyrood’s history brings opportunities and risks for everyone involved in ensuring that public money is spent well, including Audit Scotland.

We provide independent and expert insight into how public money is spent and policy is delivered, responsible for auditing more than 200 public bodies in Scotland. Whatever the political make-up of the Parliament, we’re here to support it in scrutinising the use of public money and holding government to account.

The Smith Commission agreed that the Scottish Parliament should seek to expand and strengthen the independent scrutiny of Scotland’s public finances, in view of the additional variability and uncertainty that further tax and spending devolution will introduce. I wrote to the Conveners of the Finance Committee and the Devolution (Further Powers) Committee in March, highlighting my interest in two key issues – the need to ensure the financial sustainability and management of the Scottish public finances, and the case for comprehensive, transparent, reliable and timely reporting.

The new powers mean there’s a need to look again at the Parliament’s arrangements for budget oversight. The budget processes put in place in 1999 have served the Parliament well, but they need to be refreshed so that Parliament, Government and the public can understand and debate the basis on which spending decisions and policies are made. This is especially important with the continuing financial pressures on Government, and the ambitious programme of public sector reform now underway in areas such as health and social care, education and communities.

As well as the budget process, an overall account of the revenues, expenditure, assets and liabilities of the Scottish public sector as a whole will also be essential – we have Whole of Government Accounts for the UK, which incorporate Scottish information, but we don’t yet have the equivalent picture for Scotland.

As Auditor General for Scotland, I report in public to the Parliament’s Public Audit Committee. I’m looking forward to meeting and working with new committee members so we can build on the good work of the previous session and ensure MSPs – and the public – get real value from the wide range of Audit Scotland’s work.

I’m also keen to explore new opportunities to support Parliament by informing and engaging with other committees and their members.

We’re committed to helping Parliament to develop its arrangements for using the new financial powers, and to seizing this unique opportunity to help shape Scotland’s fiscal future for generations to come.

About the author

Caroline Gardner is the Auditor General, and Accountable Officer for Audit Scotland. She started her term in July 2012, and has 30 years’ experience in audit, governance and financial management. Follow her on twitter @AuditorGenScot

 

Here at Audit Scotland we’ve been thinking about different ways to present our findings and data. The way people access information through the internet is changing, with greater use of attractive features. We wanted to bring some of these to our own work to make our information more interactive, engaging and accessible.

A perfect opportunity arose through our recent Major Capital Investment in Councils report. As part of the audit we had asked councils for information on all their capital investment projects over £5 million. We had also compiled information from the external auditors and the annual accounts on how these infrastructure projects are funded.

We used the data to give a Scotland-wide view, but there was a lot of extra material that wasn’t used in the report on specific  projects and individual councils’ funding methods which we thought others might find useful and interesting. There was a lot of interest in it when we presented the report’s findings to the 7th Annual Scottish Capital Investment and Infrastructure Conference. So we opted for the data analysis and visualisation software Tableau to create an interactive exhibit on our website – you can have a look at it here. The exhibit is made up of four dashboards that visitors drill deeper into the numbers in the report such as by clicking on council on the map or else the categories in the graphs.

What we found is that the interactivity highlights data and trends that might be missed in a big table of information. Not only does the software make data look great it also does the analysis quicker than what we have done in the past. We are now thinking of whether Tableau could be used to help us scope our performance audits.

We hope this gives people a better understanding of how the public pound is spent in Scotland. And it may help councils and other public bodies make useful comparisons and help sharing of best practice.

This is the first time Audit Scotland has tried a new output like this so it wasn’t without its challenges. As with all our work it is important that the information we present is accurate and because of the level of detail in the exhibit compared to the report we agreed the factual accuracy with all councils before publishing the exhibit.

We’re looking at other ways we might develop this format so it would be great to hear your feedback.

About the author

Ashleigh Madjitey is an Audit Officer in Audit Scotland’s Performance Audit & Best Value group. She was part of the audit team on the Major Capital Investment in Councils report and has also audited Argyll & Bute Council and broadband infrastructure investment.

 

Given the high profile nature of Audit Scotland’s work, it’s not unusual to be invited to address stakeholders at an event. So I’ll admit that I was nervous in accepting Voluntary Health Scotland’s invitation to speak at two workshops on our recent update on the progress of health and social care integration.

After all, integration is one of the most ambitious public sector reforms in recent memory, involving at least £8 billion of public money, millions of service users, 31 new integration authorities, and a potentially overwhelming number of lines of accountability.

And, some conferences or seminars can feel like the audience are there reluctantly. But these folk had volunteered to be there. What would be their expectations of audit? Would I live up to them? What hard-hitting questions could I expect?

Even more worryingly the first event, in Edinburgh, was captured live on Twitter, with comments and questions coming thick and fast via @VHScotlandComms and @AuditScotland using #healthandsocialcare. As a newcomer to the world of social media, I had imagined  the whole of Western civilisation putting its feet up for half an hour to listen out for any howlers.

Fortunately I had my colleague Rebecca Smallwood, who also worked on the health and social care integration report, alongside to help out if I lost my head (possibly by just sticking it back on and hoping for the best).

There was a lot of interest, with a number of individuals and groups from the third sector coming along: everyone in the room was keen to know more about how we’d approached our work on health and social care integration. There were a lot of questions and comments about where we might go next. Fortunately they were quite charitable. I think everyone recognised the risks highlighted in our report: complex governance arrangements, difficulties in agreeing budgets, and uncertainty about how services will be redesigned. If I had to sum up the mood, I’d probably go with ‘optimistic scepticism’.

It was much the same at our second event in Glasgow this week, and both experiences were very valuable for Rebecca and me.

How Audit Scotland engages with others, such as the voluntary sector and service users, is something we’re considering carefully at the moment, and it was refreshing and insightful to gain some alternative perspectives on what our role and focus should be in the months ahead.

So everything worked out in the end, and Voluntary Health Scotland kindly pulled together key messages and information from the events, available here. But there was a downside… I’ve now been asked to speak to another two meetings!

About the author

Gordon Neill, senior manager, has worked on a range of audits, particularly Best Value, over his 12 year career with Audit Scotland. He recently led on the first audit in our new series on health and social care integration.