WICS chief quits after auditor criticises expenditure and financial controls

Alan Sutherland has quit his long-standing role as chief executive of Scottish water regulator, the Water Industry Commission for Scotland .

Sutherland's departure, just before Christmas, followed sharp criticism of financial management arrangements at the Commission from the Auditor General for Scotland, following its review of the regulator’s annual report and accounts for 2022-23 and the report of the independent auditor of these accounts.

The criticism included allegations of:

• poor governance over the approval of expenditure – notably, a number of items required prior approval by WICS’ Scottish government sponsor team in Water Policy Division, but WICS did not seek this in advance – retrospective approval was sought and received instead;

• weaknesses in the financial control arrangements for the approval of expense claims – including claims not supported by itemised receipts, exceeding the approved subsistence rates, and reimbursement of the purchase of alcohol; and

• public funds being used to settle personal tax costs – this related to gifts and payments to staff which should have been treated as taxable benefits, but were not, leaving WICS to pay the associated tax and national insurance.

WICS has accepted the Auditor General’s report and the issues it highlighted, and said it is now focussing on an action plan to remedy the problems.

The succession process is likely to involve an interim appointment until a permanent chief executive can be found. Sutherland has been a major figure in Scottish water regulation for over two decades, and it is unclear as yet how his departure will affect the commission’s future.