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Public Audit Committee [Draft]
Meeting date: 4 June 2025
Richard Leonard
However, one of the changes in posts is related to the findings of the audit and the issues that are discussed in your report: the departure of the project director—the director of strategic partnerships and regional economy. At one point, she had oversight of the project and then, at another point, she formed a company with the external consultant in which she became a co-shareholder and co-director with that external consultant, while still being an employee of the college. Does that not suggest to you a conflict of interest?
Public Audit Committee [Draft]
Meeting date: 4 June 2025
Richard Leonard
Good morning, and welcome to the 18th meeting in 2025 of the Public Audit Committee. We have apologies from the deputy convener, Jamie Greene.
Under agenda item 1, does the committee agree to take agenda items 3, 4 and 5 in private?
Members indicated agreement.
Public Audit Committee [Draft]
Meeting date: 4 June 2025
Richard Leonard
Before I bring in Graham Simpson, I want to turn to something else. We are not the police; we are the Public Audit Committee, but we can reflect on some of the evidence that was presented to an employment tribunal in an unfair dismissal claim by the former project director, which was convened in June 2024.
In paragraph 29 of your report, you say—you also said it in your opening statement—that it was
“clear there was a mismanagement of funds”.
You say that that is why the police chose not to proceed. However, the evidence that was captured in the employment tribunal’s extended reasons referred to an internal audit. As it was an audit, it very much has provenance, and it is right for the committee, and you as the Auditor General, to address the points that it raised.
The internal audit, which reported on 31 May 2023, raised two quite striking points, which, in my view, go beyond the mismanagement of funds, because it concluded that there were
“false representations by words, or writing or conduct”.
It also said that
“the intention to deceive was established.”
The audit said that there was “no financial loss”, so there was, technically speaking, no fraud, but an “intention to deceive” and “false representations” are extremely damning conclusions to reach in an internal audit report, are they not?
Public Audit Committee [Draft]
Meeting date: 4 June 2025
Richard Leonard
Paragraph 30 of the section 22 report makes the point that the external consultant appeared to be “managing the project director”. You would expect it to be the other way round and that the project director at the college would manage and direct the consultant. That is quite extraordinary, is it not?
Public Audit Committee [Draft]
Meeting date: 4 June 2025
Richard Leonard
There are big questions about transparency, and why there are so many big questions about it is what underlies the committee’s concern.
At the end of the report, you take us into the terrain of accounts directions from the Scottish Funding Council on something that the committee has previously taken evidence on—the job evaluation process for non-teaching grades, although I think that you mentioned middle management as well as other jobs in the college sector. The committee’s question is why that is included in the report.
Public Audit Committee [Draft]
Meeting date: 4 June 2025
Richard Leonard
The job evaluation exercise has not yet been concluded so, although I recognise what you say about the technical issues around accounting and how the accounts of Forth Valley College—and of individual colleges across the sector, I presume—are produced, we are still waiting for the outcome of the exercise and what that means in financial terms, albeit that I think that the Scottish Government has given an undertaking that it will fund any additional costs that arise from the process.
Public Audit Committee [Draft]
Meeting date: 4 June 2025
Richard Leonard
Thank you very much indeed. You have undertaken to supply further information for the committee’s due consideration, so we look forward to receiving what you are able to release to us—that will be helpful. The committee will need to consider our next steps. There are some unanswered questions that even you have not been able to answer, so we will need to consider how best we can address them. For the time being, Auditor General, I thank you for leading the evidence giving this morning. I also thank Mark MacPherson, Derek Hoy and Michael Speight for their contributions.
11:09 Meeting continued in private until 11:49.Public Audit Committee [Draft]
Meeting date: 4 June 2025
Richard Leonard
That was in April 2023, I think.
Public Audit Committee [Draft]
Meeting date: 4 June 2025
Richard Leonard
I think that the creation of a private company in which the project director became a director and shareholder dates to April 2023.
Public Audit Committee [Draft]
Meeting date: 4 June 2025
Richard Leonard
Agenda item 2 is consideration of “The 2022/23 audit of Forth Valley College”, which is a section 22 report. I am pleased to welcome our four witnesses, who join us in the room. We are joined by the Auditor General, Stephen Boyle—good morning; Mark MacPherson, audit director at Audit Scotland; Derek Hoy, senior manager at Audit Scotland; and Michael Speight from Forvis Mazars, who is the auditor who carried out the initial audit work.
We have some questions to put to you on the report, Auditor General, but before we get to those, I invite you to make a short opening statement.