Water Industry Commission for Scotland - independent review: governance arrangements

3. Approach

The approach to this review included considering the scope and findings of the following:

• Section 22 Report;
• WICS’ internal review of financial transactions – the output of which was published in correspondence dated 10 June 2024 from the Interim Chief Executive of WICS to the Convener of PAC;
• Grant Thornton (WICS’ Internal Auditor) reviews of Governance and Financial Management Arrangements – June 2024, which were published in correspondence dated 31 July 2024 from the WICS Interim Chief Executive to the Convener of PAC; and
• The targeted review undertaken by Scottish Government Internal Audit which focused on Scottish Government sponsorship oversight and governance with WICS in the period following publication of the Section 22 Report.

Further, the Review Team engaged with EY who were charged with reporting on two additional scope areas focused on assessing the approach to the internal review carried out by WICS of its financial transactions for 2022-23 and the first three quarters of 2023-24; and a review of financial transactions prior to the 2022-23 financial year – obtaining a full transaction listing from WICS for 2021-22 and two other years.

While this review did not place direct reliance or take assurance from the output of the above pieces of work, the Review Team took cognisance of the scope and findings to ensure work was appropriately targeted and sought to reduce or avoid potential duplication.

In conducting this review, the Review Team carried out desk-based research, analysed responses to an anonymous survey issued by the Review Team to all WICS staff, interviews and engagement with key WICS and Scottish Government officials, and WICS Non-Executive members. The Review Team also considered the official reports from the PAC evidence sessions on 8 February and 21 March 2024. The fieldwork for the review was undertaken in the period 24 July to 13 September 2024.

In considering the role of those charged with governance, including the Chair of the Board, the Board and its Committees, the Review Team considered the roles and responsibilities of these individuals and groups as set out in the WICS Governance Framework and Framework Document. The Review Team also considered the requirements of the SPFM, which sets out roles and responsibilities of Accountable Officers (in this case the Chief Executive of WICS as Accountable Officer and DG Net Zero as Portfolio Accountable Officer) and those with sponsor responsibilities. Further, Scottish Government ‘On Board – A Guide for Members of Statutory Boards’ provides information on the role of the Board, its Committees and the Chair of the Board. Board members also have appointment letters which set out their roles and responsibilities.