AGS: 3E EXAMINATIONS
Contents:
Scope
Key Points
Background
Scope of Examinations
Planning Examinations
Contact with Examiners
Reports
Baseline Studies
Scoping Studies
Scope
1. This section gives guidance on economy, efficiency
and effectiveness (3E) examinations and related studies
initiated by the Auditor General for Scotland (AGS).
Key Points
2. In carrying out 3E examinations the examiner is not
entitled to question the merits of policy objectives.
3. Examiners' approaches to Departments will be directed
in the first instance to the relevant Finance Team
Leader.
4. An examination covering both a Department and a
sponsored body will require close liaison between the
Department and the body concerned
5. Facts and figures etc emerging from a full
examination should as far as possible be discussed and
cleared progressively with the Department by the
examiner.
Background
6. Under section 23 of the Public Finance and
Accountability (Scotland) Act 2000 (the PFA Act) the AGS
may initiate examinations into the economy, efficiency and
effectiveness with which the Scottish Administration and
certain other office holders and bodies have used their
resources in discharging their functions. This includes any
body or office-holder where there is a statutory
requirement for the AGS to undertake or arrange for the
audit of the accounts. 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. And 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.
Scope of Examinations
7. The AGS may examine not only the arrangements for
securing economy, efficiency and effectiveness. He or she
may also directly examine and report on results achieved
from individual projects, programmes or other activities.
In carrying out the examinations the examiner is not
entitled to question the merits of the policy objectives of
the body or office-holder in question. This reflects the
principle that the merits of Government programmes and
projects are primarily a matter for Ministers. Nonetheless,
the accuracy and completeness of information on the basis
of which policy decisions are reached, the means by which
objectives are pursued, the implementation arrangements and
controls, the costs incurred and the results achieved are
all legitimate subjects for 3E examinations.
Planning Examinations
8. The AGS may discuss his or her forward programme of
3E examinations with the Scottish Executive via the
Permanent Secretary and/or Scottish Executive Finance
Director. This is not to obtain approval since the decision
whether or not to initiate an examination is for the AGS
alone. Nonetheless, the AGS may take into account
particular points such as overloading individual Divisions
or the bunching of reviews of one sort or another, or an
impending development which might affect the conduct of an
examination. The AGS will also consult the Audit Committee
of the Scottish Parliament about the shape of the coming
year's programme.
9. Examiners will discuss proposals for individual
examinations with Departments. The purpose of this
consultation is not to agree the proposal but to ensure
that the views of the Department are fully considered and
taken into account. It is essential, however, that any
disagreement on the proposal is recorded at this stage.
Departments should therefore examine the proposals
carefully in consultation with the relevant Finance Team
and should challenge any suggestion or implication that the
examiners are in danger of straying into policy areas which
are beyond their jurisdiction.
10. A full 3E examination involves an extensive in-depth
exercise on which the AGS can base his or her report. Facts
and figures emerging from the examination should as far as
possible be discussed and cleared progressively with the
Department as fieldwork proceeds. Departments should
examine carefully the records of meetings etc prepared by
the examiners and should not hesitate to correct any
mis-statements of fact or challenge what they see as
misinterpretation or mistaken emphasis. Finance Team
Leaders should be given the opportunity to attend formal
meetings with the examiners during this stage of the
examination.
Contact with Examiners
11. Examiners' approaches will be directed in the first
instance to the relevant Finance Team Leader.
Administrative divisions will be approached subsequently,
with Finance Teams giving divisions, normally the Head of
the Division, advance notice of likely approaches. Heads of
Division should decide on who should undertake discussions
with the examiners in the light of the sensitivity of the
subject in question and the information about the
examiners' purposes supplied to them by their Finance Team.
Individual staff should not agree to see the examiners
without the specific agreement of their Head of Division
who should, if appropriate, consult his or her Finance
Team. Any unannounced approach by the examiners unrelated
to certification work or an ongoing 3E examination must be
reported immediately to the relevant Finance Team.
12. 3E examinations may cover bodies which Departments
sponsor. This may involve work in both the Department and
the sponsored body, or in the sponsored body alone. Sponsor
Departments should ensure that the sponsored body notifies
the Department as soon as an approach by an examiner is
made, and should suggest to those bodies that arrangements
similar to those for Departments should operate for dealing
with examiners.
13. Where an examination covers both a Department and a
sponsored body, it is important that there is close liaison
between the Department and the body concerned and that, so
far as possible and consistent with their respective
interests, both parties speak to the examiners with one
voice.
Reports
14. Reports go through a consultation stage before
reaching the final published version. Towards the end of
the examination, the examiners will produce a draft final
report which will be sent to the Accountable Officer. (See
section on
Dealing
with Draft AGS Reports.)
15. The AGS is not obliged to report the results of
examinations to the Parliament but it should be assumed
that all such reports will be laid before the Parliament
and considered by the Audit Committee. (See section on
dealing with resulting
Audit
Committee reports.)
Baseline Studies
16. 3E examinations include studies carried out in 2
separate stages with the primary objective of promoting
improvement across a particular subject area. The first
stage, the baseline report, identifies current practice
across a particular subject area, draws conclusions, makes
recommendations and provides guidance on best practice. The
second stage, the follow-up report, revisits the subject
area after an appropriate interval and highlights those
constituent parts of the subject area which have failed to
maintain or to make progress towards achieving best
practice. Baseline studies should not lead to Audit
Committee hearings until after the second stage but the
committee may seek written comments on the baseline report.
Guidance and procedures on dealing with draft AGS reports
and full 3E examinations are equally applicable to both
stages.
Scoping Studies
17. 3E examinations also include scoping studies i.e.
preliminary examinations of particular areas of activity.
No conclusions are reached and no recommendations are made
other than whether or not a full 3E examination should be
undertaken. Scoping studies are published and laid before
the Parliament but should not be the subject of Audit
Committee hearings. However, the guidance and procedures on
dealing with draft AGS reports and full 3E examinations
are, where appropriate, equally applicable.
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Page Published/ Updated on: 17th June 2004