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But what is the Government’s response to it? We did not get a response from Kevin Stewart, so we are asking you this morning.

I go back to the substantive point that a disclaimer has been issued. Again on 29 June, when the Auditor General appeared before the committee, he emphasised that the issuing of a disclaimer is “a serious matter”.

Mr Paterson, you issued a note to accompany the papers today in which you spoke of a “demanding timeframe”—that was your expression. When I look back at the evidence that we took last year, I see that Sarah Jane Hannah confirmed that, even back in the 2012-13 audit—although she was not working in the organisation at that point—Audit Scotland had flagged up the possibility that there might be a requirement to have a fixed asset register. When I look back to November 2019, I see that Scottish Canals looked for a year’s delay at that point, but we are now nearly four years on and the work is still not completed.

Will you comment on that? Why are you still seeking an understanding of the “demanding timeframe” that you face, when it appears to me that you have faced it for quite some time?

I think that we were told that it was a special adviser.

I will move on to another area in which there has been public interest, and that is who, in the end, was responsible for signing off the contract. Mr Wilcock alluded to the 200-odd documents that the Government has released, which included email exchanges in which John Swinney’s officials spoke about banana skins, for example. There seemed to be, and still appears to be, some confusion over who, in the end, signed the contract off. Was it Derek Mackay, Keith Brown or John Swinney? Has the Government drawn any lessons from that observation of the committee?

Yes, but it is not even clear, Ms Irvine, whether Mr Mackay was on holiday and therefore Mr Brown signed the authorisation, for example. All that I am saying is that there continues to be a degree of confusion about that process and where the authorisation lay.

I will bring in Mr Beattie, who has some questions that develop the theme of Transport Scotland’s role.

One of the areas where we suggested that there could be a revision is the public recording of decisions. In this case, the CMAL board was overridden by a shareholder authorisation that has an equivalence with a written authority. I wonder whether you could respond—in writing, not right now—with the Government’s position on the public recording of instances of shareholder authorisation being required.

Thank you. We have run over our time slightly. I suspect that we could go on much longer, minister, but the committee has another evidence session this morning.

I thank all of you—Fiona Hyslop, Colin Cook, Alison Irvine and Chris Wilcock—for your time and input this morning. There might be things that we want to follow up with you in writing, but I thank you for your openness in answering the questions that we have been putting to you.

I suspend the meeting to allow for a change of witnesses.

Welcome back to the second session of this morning’s evidence taking by the Public Audit Committee, which will consider the section 22 report by the Auditor General for Scotland on the audit of Scottish Canals.

I welcome our witnesses, who include representatives from Transport Scotland—that is, the Government—and Scottish Canals. From Scottish Canals, we have John Paterson, chief executive; Maureen Campbell, chair of the board; Sarah Jane Hannah, director of finance and business services; and Richard Millar, chief operating officer. From Transport Scotland, we have Alison Irvine, interim chief executive—good morning, Alison; Kerry Twyman, director of finance and corporate services; and Gary Cox, interim director, aviation, maritime, freight and canals.

We have some questions to put to you about the report but, before we do that, I invite Mr Paterson to make a short opening statement.

You mentioned the former First Minister’s evidence to us. She told us that

“no formal decisions were taken by Cabinet on these matters.”

Was the decision to nationalise the yard, for example, not a Cabinet-level decision?

I will quote back to you what the Auditor General’s report says. Paragraph 15 includes expressions such as

“could not be supported by evidence”,

“lack of data”, “potential errors”, “There were errors”, “a lack of documentation”, “several errors” and so on. The report contains quite a catalogue of criticisms of your methodology, all of which has led to a decision not to issue approval of your accounts. As I mentioned earlier, that was described by the Auditor General as “a serious matter”.

From my point of view, I do not want us to be here again in a year’s time, and I am sure that you do not want that, either, but it feels as though we are hearing the same arguments that we heard a year ago. I think that we need persuading that things are moving forward.

Graham Simpson wants to come in.