Auditor slams Scottish Government’s accounting

Caroline Gardner, Auditor General for Scotland

The Auditor General for Scotland on Thursday criticized the financial reporting of the Scottish Government, saying it “has taken a step backwards at a time when the uncertainty surrounding EU withdrawal will pose unprecedented challenges for the management of public finances.”

Auditor General Caroline Gardner’s report said the 2018-19 audit of the Scottish Government’s consolidated accounts show that its overall budget of £36.915 billion was underspent by £778 million.

The report also said the Scottish Government has substantially reduced the value of £140 million worth of loans and guarantees to private companies.

“Loans totalling £45 million to Ferguson Marine Engineering Limited (FMEL) were reduced in value to nil at the end of the financial year due to the shipyard’s financial difficulties,” said the report.

It said the government also reduced an equity stake of £37.4 million in engineering firm Bi-Fab to £2 million to reflect expected losses, reduced a £39.9 million loan to Prestwick Airport to £6.9 million, and a £21.4 million fee for providing financial guarantees to Lochaber Aluminium Smelter to nil “to reflect new accounting standards.”

The report noted that improvements have been made to the government’s governance arrangements in the last year.

“However, a commitment to publishing a consolidated account covering the whole of Scotland’s public sector has not been fulfilled,” added the report.

“And the government’s second medium-term financial strategy lacks indicative spending plans and priorities.”

Caroline Gardner, Auditor General for Scotland, said: “The Scottish Government’s financial reporting has taken a step backwards at a time when the uncertainty surrounding EU withdrawal will pose unprecedented challenges for the management of public finances.

“Parliament needs better information to be able to better scrutinise ministers’ financial decision-making and to ensure value for money is achieved from a limited budget pot.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.