AGS: AUDITORS AND EXAMINERS
Contents:
Scope
Key Points
Auditor General for Scotland
Audit Scotland
Scottish Commission for Public Audit
Performance Management
Access to Documents and Information
Use of Consultants by Audit Scotland
Meetings with Auditors and Examiners
Scope
1. This section gives guidance on the role, main
functions and powers of the Auditor General for Scotland
(AGS) and auditors and examiners authorised by the AGS.
Key Points
2. The main functions of the AGS are to secure the audit
of relevant accounts and to undertake / initiate economy,
efficiency and effectiveness (3E) examinations.
3. Any function of the AGS may be undertaken by any
person - whether or not a member of the staff of Audit
Scotland - authorised by the AGS to do so.
4. Auditors and examiners will have a remit to validate
performance indicators.
5. Auditors and examiners have extensive rights of
access to documents and information.
6. Auditors and examiners cannot question the merits of
policy objectives. They may, however, consider the
appropriateness of any criteria used to assess use of
resources.
Auditor General for Scotland
7. The AGS was established under section 69 of the
Scotland Act 1998 as an individual appointed by the Crown
on the recommendation of the Scottish Parliament but
independent of both the Scottish Executive and the
Parliament. The main functions of the AGS are as
follows:
securing the audit of certain accounts and
certifying and reporting on them; and
securing examinations into the economy,
efficiency and effectiveness with which certain
bodies or office-holders have used their resources
in discharging their functions and reporting on
them. However, under section 23(9) of the Public
Finance and Accountability (Scotland) Act 2000 (the
PFA Act) the examiner is not entitled to question
the merits of the policy objectives of the body or
office-holder in question.
8. Section 13(6) of the PFA Act allows for any function
of the AGS to be exercised on his or her behalf by a member
of the staff of Audit Scotland or any other person
authorised by the AGS to do so. Section 21(3) of the PFA
Act allows for accounts to be audited by the AGS or a
qualified person appointed by the AGS. Section 24(8) of the
PFA Act allows for 3E examinations to be initiated by the
AGS and for the AGS to decide who should carry out the
examinations.
9. Specific guidance on the
auditing of accounts and
3E examinations is set out in relevant sections of this Manual.
Audit Scotland
10. Audit Scotland was established under section 10 of
the Public Finance and Accountability (Scotland) Act 2000
(the PFA Act) and consists of the AGS, the Chairman of the
Accounts Commission and 3 other members appointed jointly
by the AGS and the Chairman.
Scottish Commission for Public Audit
11. The Scottish Commission for Public Audit was
established under section 12 of the PFA Act to examine the
proposed budget of Audit Scotland, appoint Audit Scotland's
auditors, and initiate and consider 3E examinations into
Audit Scotland. The Commission is made up of the convener
of the Audit Committee and 4 other members of the
Parliament.
Performance Management
12. When an auditor undertakes an audit of accounts, he
or she will have a remit to validate the performance
indicators reported on by the Department in the annual
accounts. This means that the auditor will be able to state
whether or not the figures recorded by the Department are
accurate. In addition, an auditor - or an examiner
undertaking a 3E examination - will be able to comment on
whether the indicators that have been set are appropriate
in terms of the policy objectives set by the Department and
complete. Where the auditor or examiner considers that they
are not, he or she will be entitled to suggest additions or
alternatives.
Access to Documents and Information
13. Under section 24 of the PFA Act the auditor or
examiner has - subject to reasonableness - rights of access
to any document or record in the possession or under the
control of the body or office-holder being audited or
examined and may require any assistance or information from
any individual holding or accountable for such documents or
records. In addition, Scottish Ministers have the power to
grant the auditor or examiner access rights to specific
persons or classes of persons by Order.
14. Departments should give auditors or examiners wide
access to all documents contained in files, such as
Departmental correspondence, notes of meetings and the
like, relating to the implementation of policy decisions.
They cannot, however, question the merits of policy
objectives and papers primarily concerned with the
formation of policy by Ministers will not normally be
relevant to 3E examinations. The distinction, however, can
be a fine one.
15. A request by auditors or examiners for access to
policy papers should be referred immediately to the
relevant Head of the Division who should, if necessary,
consult the relevant Finance Team Leader. They might
consider asking the auditor or examiner to explain
precisely why they consider the document relevant to the
audit or examination.
16. Departments, however, should not question the right
of access by auditors or examiners, or refuse it, lightly.
Refusal of access may create an atmosphere of suspicion and
a distinct impression that there is something to hide. It
may be difficult to separate policy papers from those
concerned with the implementation and execution of the
policy. Indeed, aspects of both may be contained in the
same paper. Appreciation of the background of policy
decisions may help auditors' and examiners' understanding
of the situation, and thus the investigation.
17. Departments should therefore only consider denying
auditors or examiners access to papers if they consider
that there is an attempt to question the merits of policy
objectives. Before doing so, they must consult the relevant
Finance Team Leader and obtain the express agreement of the
relevant Accountable Officer since he or she may have to
defend the decision to the Audit Committee and may need to
seek the views of the responsible Minister.
18. Any request for Cabinet or Cabinet Committee papers
must be referred to the Cabinet Secretariat.
Use of Consultants by Audit Scotland
19. Where Audit Scotland undertakes audits or
examinations on behalf of the AGS it may employ the
assistance of firms of consultants in order, for example,
to profit from their individual expertise. While there is
no objection in principle to the use of these consultants,
there may be security considerations if classified or
commercially confidential material is involved. Audit
Scotland will consult Departments in advance about the
appointment of consultants.
20. Audit Scotland will normally be prepared to consider
representations on the need to restrict access by their
consultants. Where they agree to such restriction, the
details should be set out in writing and consultants should
only be allowed to see papers specified in the agreement.
Departments should in addition obtain from Audit Scotland,
if appropriate, written assurance that their consultants
are under contractual obligation not to use Departmental or
other information obtained from the Department for any
purpose other than the work they contracted to undertake
for Audit Scotland. Audit Scotland will normally provide
Departments with copies of consultants' reports. If a
report is not volunteered, then the Department should ask
to see it.
Meetings with Auditors and Examiners
21. In carrying out 3E examinations the examiners have,
in addition to the right of access to documents, a right to
further information and explanation. Discussion is an
essential part of the process and Departments should agree
to meet examiners during the conduct of examinations, and
should enter these discussions in a constructive spirit.
Nonetheless, examiners have no absolute right to obtain
explanation by interview and Divisional Heads may wish to
consider restricting face to face contact with examiners to
particular officers, for example those above a certain
grade. Finance Team Leaders, however, should always be
given the opportunity to attend meetings with auditors and
examiners, and this applies to meetings for any purpose,
not only those which are audit or examination related.
Normally, of course, simple requests by auditors and
examiners for factual information either by telephone or
during a visit should be dealt with at an appropriate
level. In relation to the audit of the accounts, the
auditor will seek such evidence as he or she considers
necessary to support his or her opinion. Finance Teams will
be the primary points of contact for the auditor, and any
wider access to Departments should be arranged through the
relevant Finance Team.
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Page Published/ Updated on: 21st December 2001