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WORLD CLASS FINANCIAL PROCEDURES FOR SCOTLAND'S PARLIAMENT: McLEISH

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The financial systems used by Scotland's parliament for planning budgets, accounting and auditing public bodies wil...
The financial systems used by Scotland's parliament for planning budgets, accounting and auditing public bodies will be world class and represent a revolution in the way Scotland handles public money, devolution minister Henry McLeish has promised.

Speaking after the tenth meeting of the all party consultative steering group, which considered the final report of the expert Financial Issues Advisory Group (FIAG), Mr McLeish said:

'The FIAG report, which was endorsed by the consultative steering group today, sets out a range of proposals that will revolutionise the way public money is handled in Scotland.

'The proposals are robust, tough and disciplined and incorporate new and innovative features as well as drawing on best practice as used at Westminster and other parliaments around the world.

'The proposals include a pioneering new method for agreeing the budget - which will begin preparation a year in advance and involve consultation with special interest groups; a system of 'Accountable Officers' answerable to committees; and the formation of a powerful new body, Audit Scotland, to audit public sector bodies.

'This will be a quantum leap forward in the way Scotland's money is handled and it is vital that procedures operate to the highest possible standards.

'This is a parliament for the people and it is essential that the people's money is taken seriously by the parliament.'

The FIAG report is wide ranging and sets out in detail proposed arrangements for the management of financial affairs at the parliament. They include:

- using plain, accessible language in all financial documents where possible.

- establishing parliamentary committees to co-ordinate financial management functions including subject committees, a finance committee and an audit committee.

- establishing a three stage procedure for introducing the annual budget that will involve (i) considering priorities a year ahead of implementation including consulting special interest groups (ii) publishing a preliminary draft budget for comment and debate by MSPs later in the year and (iii) publishing a detailed budget that takes account of earlier comments for full debate in the January before implementation;

- allowing flexibility for changes in budgetary allocations throughout the year but requiring the parliament to approve transfers between departmental budgets;

- establishing a system of senior officials of the Scottish Executive to be known as 'Accountable Officers' (similar to Westminster) answerable to committees for the actions of their staff;

- the appointment of an independent auditor general for Scotland (AGS) to commission financial and value for money audit for much of the public sector in Scotland;

- establishing a powerful new body, Audit Scotland, (merging the auditing staff of the Accounts Commission and National Audit Office in Scotland) to carry out audits of public sector bodies on behalf of the AGS and the Accounts Commission;

- recommending that audit reports on the NHS are made to the Parliament and that audit reports on local authorities continue to be dealt with by the Accounts Commission;

- establishing a Public Audit Commission which would not direct the AGS but consider general questions of accountability and audit.

Setting up appropriate financial arrangements will be one of the key tasks facing the Scottish parliament when it is elected in May next year and FIAG recommend that the appointment of the Auditor General for Scotland and the establishment of Audit Scotland should receive early and urgent attention.

NOTE

1. The Financial Issues Advisory Group was set up by the secretary of state for Scotland in February 1998 with the task of proposing rules, procedures, standing orders and legislation for the handling of financial issues by the Scottish parliament.

2. The objective of FIAG is to ensure that the Scottish parliament's finances are managed in a way that is open, accessible and accountable to the people of Scotland.

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