Public Audit Committee probes deeper on WICS

The Scottish Parliament Public Audit Committee (PAC) published letters last week in which it requested further information from the Water Industry Commission for Scotland (WICS), the Scottish Government (SG) and the Auditor General for Scotland (AGS) on WICS’ use of public funds and other related matters.

The interest stems from the AGS report on the regulator’s annual report and accounts for 2022-23, which heavily criticised governance and financial management issues. The latest letters follow correspondence from all interested parties with the PAC, the publication of a Freedom of Information request by WICS, and a series of meetings, the latest of which took place on 13 June.

In its letters to the Scottish Government and WICS, the PAC sought further information on matters including:

• WICS’ policy since 2017 of requiring senior staff to hold an MBA (with training courses costing between £20,000 and £88,000) – including: is this common practice for public bodies? Was the policy questioned? How was course procurement managed? Should WICS have sought SG approval?

• The departure of WICS’ former chief executive Alan Sutherland – including: the process followed, SG input, payment authorisation and the legal advice taken.

• Various items of expenditure, including meals exceeding the £50 per head limit (some of which were attended by a SG official), and gifts for a delegation from Barbados in October 2023.

• WICS’ internal audit of financial transactions, considered by its Audit and Risk Committee on 11 June.

• Clarification on the scope and timetable for the planned external review of WICS.

• WICS’ remote working since Covid – the savings achieved and whether this “may have contributed to WICS’s lack of compliance with proper procedures and enabled a culture of inappropriate expenditure and a lack of proper approval processes”. (The PAC noted WICS is now moving towards a hybrid working model as part of its organisational change programme to address the cultural issues that have arisen in the organisation).

In its letter to the AGS, the PAC said: “The Committee is concerned that WICS has not been sufficiently focussed on ensuring value for money is achieved in the use of public funds over several years. While the Committee is clear that the responsibility for ensuring the proper management and control of public money lies with the public body, in this case WICS, it seeks to understand what, if anything, past external audits could have done differently to help identify these issues sooner.”

It added: “The Committee also asks if there are any lessons that can be learned from the 2022/23 audit of WICS that could be applied to the planning of future audits, while recognising the need for audits to be proportionate and tailored to the individual public body.”

All responses were requested by 31 July. A spokesperson for WICS said: “We are preparing a response to the committee’s requests and will continue to cooperate fully with its work.”