Annex 1: memorandum to accountable officers for parts of the Scottish Administration
Public Finance and Accountability (Scotland) Act 2000
1. Introduction
1.1 Section 14 of the Public Finance and Accountability (Scotland) Act 2000 (PFA Act) makes provision for my appointment as Principal Accountable Officer for the Scottish Administration and specifies my functions as such. Section 15(1) and (3) of the PFA Act provide for me to designate Accountable Officers for parts of the Scottish Administration and for other bodies the accounts of which are required by statute to be audited by or under the control of the Auditor General for Scotland.
1.2 Under section 15(6) of the PFA Act Accountable Officers designated by me are personally answerable to the Scottish Parliament for the exercise of their functions. Paragraphs 2 and 3 below describe my statutory responsibilities and my relationship with you. The remainder of this Memorandum determines the responsibilities which are common to all Accountable Officers that I designate for parts of the Scottish Administration.
1.3 References to parts of the Scottish Administration are to the parts for which I designate separate Accountable Officers. These will include the core Scottish Government (SG), SG Executive Agencies and the Crown Office and Procurator Fiscal Service as well as non-ministerial Agencies and Departments.
1.4 As and when appropriate references to Ministers in this Memorandum apply equally to the Lord Advocate and non-ministerial office-holders in the Scottish Administration.
2. Statutory responsibilities of the Principal Accountable Officer
2.1 Under section 14 of the PFA Act I am personally answerable to the Parliament for the exercise of the following functions:
2.1.1 signing the accounts of the expenditure and receipts of the Scottish Administration or any part of it, so far as it is not a function of any Accountable Officer designated by me under the provisions of section 15(1) of the PFA Act;
2.1.2 signing any account prepared in pursuance of section 19(2) of the PFA Act (the account of the Scottish Consolidated Fund);
2.1.2 signing any account prepared in pursuance of section 19(2) of the PFA Act (the account of the Scottish Consolidated Fund);
2.1.3 ensuring the propriety and regularity of the finances of the Scottish Administration;
2.1.4 ensuring that the resources of the Scottish Administration are used economically efficiently and effectively;
2.1.5 designating persons as Accountable Officers and determining their functions as such in accordance with the provisions of section 15 of the PFA Act;
2.1.6 ensuring the performance of those functions by Accountable Officers for parts of the Scottish Administration; and
2.1.7 the duty to obtain written authority from (as the case may be) the Ministers, the Lord Advocate or the non-ministerial office-holder in question before taking an action which I consider is inconsistent with the proper performance of the functions mentioned in paragraphs 2.1.1 to 2.1.6 above and send a copy of the authority to the Auditor General as soon as possible.
3. Relationship between the Principal Accountable Officer and Accountable Officers
3.1 I remain responsible for the assigned budgets and accounts and remain in general charge of the Scottish Administration and therefore am responsible for ensuring that there is a high standard of financial management as a whole. You will have immediate responsibility for ensuring that the requirements of paragraph 5 below are met in respect of the resources of the part of the Scottish Administration for which you are answerable subject to the following:
3.1.1 I am responsible for undertaking all Accountable Officer duties in respect of the administration costs for the core Scottish Government (SG), but not for the Crown Office and Procurator Fiscal Service, SG Executive Agencies or non-ministerial Agencies and Departments where the administration costs are authorised, and accounted for, along with their other expenditure.
3.1.2 I am responsible for ensuring the reliability and integrity of the core SG accounting system, but not for separate accounting systems operated by parts of the Scottish Administration. You remain responsible for these, as appropriate. You also remain responsible for inputs made to the core system by your designated part of the Scottish Administration.
3.1.3 If you are an Accountable Officer for an SG Executive Agency, you will not have specific responsibility for those matters reserved to the Portfolio Accountable Officer in the Agency framework document. However, you are expected to carry out your duties in a way which supports the Portfolio Accountable Officer.
3.1.4 I am responsible for ensuring that arrangements for internal audit for the core SG accord with the objectives, standards and practices set out in the Government Internal Audit Manual. You remain responsible for taking action on internal audit reports affecting your designated part of the Scottish Administration. If outside the core, you are directly responsible for ensuring internal audit arrangements conform to these requirements.
3.2 In order that I may fulfil my overall responsibilities as Principal Accountable Officer I require you to ensure that:
3.2.1 I am made aware of all advice tendered to Ministers which concerns expenditure or has implications for the organisation, management and staffing of the Scottish Administration;
3.2.2 I am made aware of any request that you make to Ministers for a written authority - see paragraph 8 below - in order that I am in a position to advise the First Minister and Deputy First Minister;
3.2.3 staff within the part of the Scottish Administration for which you have been designated Accountable Officer adhere to all relevant financial guidance including, in particular, that in the Scottish Public Finance Manual; and
3.2.4 except where there is specific agreement to the contrary, Finance Directorate are consulted on all approaches to Ministers with financial and resource implications, and that any comments made by them are faithfully recorded in these submissions.
3.3 If you are required to appear before the Public Audit Committee your position is different from that of mine, as I carry full responsibility for the organisation and management of the Scottish Administration as a whole. You may answer questions from the Committee about the discharge of your own responsibilities. If questioning is likely to be directed to issues relating to the organisation or management of the Scottish Administration as a whole or other matters determined by myself, the Committee could be expected to accede to a suggestion that they call me to give evidence together with yourself.
4. General responsibilities of Accountable Officers
4.1 The essence of your role as Accountable Officer is, subject to section 8 below, a personal responsibility for the propriety and regularity of the public finances for the part of the Scottish Administration for which you are answerable and ensuring that the resources for that part of the Scottish Administration are used economically, efficiently and effectively.
4.2 It is incumbent on you to combine your duties as an Accountable Officer with your duty to serve Ministers to whom you are responsible and from whom you derive your authority. Ministers are in turn responsible to the Parliament in respect of relevant policy decisions.
4.3 You may be called to give evidence before the Public Audit Committee. You will be expected to deal with questions arising from any accounts for which your designated part of the Scottish Administration is directly responsible or, more commonly, from reports made to the Parliament by the Auditor General for Scotland on examinations into the economy, efficiency and effectiveness with which your designated part of the Scottish Administration has used its resources in discharging its functions. More detailed guidance is provided at paragraph 9 below and in the Scottish Public Finance Manual.
4.4 You must make sure that arrangements for delegation promote good management and that you are supported by the necessary staff with an appropriate balance of skills. The latter requires careful selection and development of staff and the sufficient provision of, or access to, specialist skills and services (scientific, economic, statistical, accountancy, inspection and review etc). You should ensure that staff are conscientious in their approach to costs, whether or not borne directly on the budget for your designated part of the Scottish Administration.
5. Specific responsibilities of Accountable Officers
5.1 As an Accountable Officer you must, in relation to the part of the Scottish Administration for which you are designated:
5.1.1 sign the accounts - and the associated Statements on Internal Control - for which you are directly responsible, and in doing so accept personal responsibility for their proper presentation as prescribed in legislation or in the relevant Accounts Direction issued by the Scottish Ministers;
5.1.2 ensure that proper financial procedures are followed and that accounting records are maintained in a form suited to the requirements of management as well as in the form prescribed for published accounts;
5.1.3 ensure that the public funds for which you are responsible are properly managed and safeguarded, including independent and effective checks of any cash balances in the hands of an official;
5.1.4 ensure that assets for which you are responsible such as land, buildings or other property, including stores and equipment, are controlled and safeguarded with similar care, and with checks as appropriate;
5.1.5 ensure that, in the consideration of policy proposals relating to the resources for which you have responsibilities as Accountable Officer, all relevant financial considerations, including any issues of propriety, regularity or value for money, are taken into account, and where appropriate brought to the attention of Ministers;
5.1.6 ensure that delegation of responsibility is accompanied by clear lines of control and accountability together with reporting arrangements;
5.1.7 ensure that procurement activity is conducted in accordance with the requirements of the Procurement section of the Scottish Public Finance Manual;
5.1.8 ensure that effective management systems appropriate for the achievement of objectives, including financial monitoring and control systems, have been put in place;
5.1.9 ensure that risks, whether to achievement of business objectives, regularity, propriety or value for money, are identified, that their significance is assessed and that systems appropriate to the risks are place in all relevant areas to manage them;
5.1.10 ensure that arrangements have been made to secure Best Value as set out in the Scottish Public Finance Manual;
5.1.11 ensure that managers at all levels have a clear view of their objectives, and the means to assess and measure outputs, outcomes and performance in relation to those objectives;
5.1.12 ensure managers at all levels are assigned well defined responsibilities for making the best use of resources (both those consumed by their own commands and any made available to third parties) including a critical scrutiny of outputs, outcomes, value for money, and compliance with any conditions of grant; and
5.1.13 ensure managers at all levels have the information (particularly about costs), training and access to the expert advice which they need to exercise their responsibilities effectively.
6. Sponsored bodies
6.1 In all cases where your designated part of the Scottish Administration sponsors a body there must be a clear understanding of the respective responsibilities of you as the sponsoring directorate’s Accountable Officer and the senior full-time official (the Chief Executive or equivalent) of the sponsored body concerned. In particular you must be satisfied that:
6.1.1 the financial and other management controls applied by the sponsoring directorate are appropriate and sufficient to safeguard public funds and, more generally that those being applied by the sponsored body conform with the requirements both of propriety and of good financial management;
6.1.2 there is an adequate statement of the relationship between the Scottish Ministers / Government and the sponsored body in a framework document - and that this document is regularly reviewed; and
6.1.3 compliance with the framework document is effectively monitored by the sponsoring directorate.
6.2 I shall, subject to your advice, designate formally the senior full-time official of the sponsored body as Accountable Officer. However, I may only appoint Accountable Officers on a statutory basis for bodies the accounts of which are required by statute to be audited by or under the control of the Auditor General for Scotland. In some other cases the need for public accountability may make it appropriate to apply similar provisions to bodies on a non-statutory basis e.g. where the accounts of the body are laid before the Parliament or where significant public funds are under its stewardship. Designation, either statutory or non-statutory, should be notified to the senior full-time official by you following clearance by me.
6.3 The statutory designation as Accountable Officer will automatically carry with it a duty on the person concerned for taking formal action, analogous to the procedures set out in paragraph 8, if the body is contemplating a course which would infringe the requirements of financial propriety and regularity, or on the economic, efficient and effective use of resources. You should ensure that you are informed without undue delay of cases where the Accountable Officer of a sponsored body seeks formal authority from the body to pursue a course of action which the Accountable Officer of the body has advised against on the above grounds.
7. Regularity and propriety
7.1 You must ensure that the part of the Scottish Administration for which you are designated Accountable Officer achieves high standards of regularity and propriety in the consumption of resources. Regularity involves compliance with relevant legislation (including the annual Budget Act) and relevant guidance issued by the Scottish Ministers - in particular the Scottish Public Finance Manual. Propriety involves respecting the Parliament’s intentions and conventions and adhering to values and behaviours appropriate to the public sector.
7.2 You have a particular responsibility for ensuring compliance with parliamentary requirements in the control of expenditure. A fundamental requirement is that funds should be applied only to the extent and for the purposes authorised by the Parliament in Budget Acts (or otherwise authorised by section 65 of the Scotland Act 1998). The Parliament's attention must be drawn to losses or special payments, by appropriate notation of the relevant account. In the case of expenditure approved under the Budget Act any payments made must be within the scope and amount specified in that Act.
7.3 You are responsible for ensuring that specific sanction for expenditure has been obtained from Financial Management Directorate in all cases where it is required. It is required for any expenditure not covered by standing delegated authorities e.g. losses and special payments in excess of specific delegated authorities; novel, contentious or repercussive expenditure. In cases not covered by the Budget Act, e.g. in connection with a service not contemplated when the Budget Bill was presented, you must ensure that Financial Management Directorate is informed in order that appropriate advice can be given, and, if necessary, the parliamentary procedures followed. You are also responsible for the collection and bringing to account in due form of all receipts of any kind connected with the budget and accounts for which you are responsible.
7.4 In your stewardship of public funds all actions must be able to stand the test of parliamentary scrutiny, public judgements on propriety and professional codes of conduct. You must not misuse your official position to further your private interests and care should be taken to avoid actual, potential, or perceived conflicts of interest.
8. Advice to ministers
8.1 In accordance with section 15(8) of the PFA Act you have particular responsibility to ensure that, where you consider that any action that you are required to take is inconsistent with the proper performance of your duties as Accountable Officer, you obtain written authority from Ministers before taking the action. Cabinet procedures for dealing with requests for such authority require any written authorities from Ministers to be assessed separately by the Cabinet Secretary for Finance, Economy and Fair Work, and cleared by the First Minister, and the Deputy First Minister. The PFA Act requires copies of any written authorities to be sent to the Auditor General for Scotland as soon as possible.
8.2 You have particular responsibility to ensure that appropriate advice is tendered to Ministers on all matters of financial regularity and propriety and on the economic, efficient and effective use of resources. If you consider that Ministers are contemplating a course of action which you consider would infringe the requirements of financial regularity or propriety or that you could not defend as representing value for money within a framework of Best Value you should, in consultation with Financial Management Directorate, set out in writing the objection to the proposal and the reasons for this objection. If Ministers decide to proceed, you should seek a written authority to take the action in question making clear whether the authority is being sought on the grounds of regularity, propriety or / and value for money. Having received such an authority (following assessment by the Cabinet Secretary for Finance, Economy and Fair Work, and clearance by the First Minister and the Deputy First Minister), you must comply with it, but should then, without undue delay, pass copies of the request for the authority and the authority itself to the Auditor General and the Clerk to the Public Audit Committee.
8.3 A value for money written authority need only be sought in relation to the implementation of policy. Accountable Officers are not answerable to the Parliament in respect of policy decisions. Policy is the responsibility of Ministers. Your responsibility in this respect is to ensure that all relevant financial considerations are brought to the attention of Ministers before the policy decision is taken. In circumstances where a ministerial written authority overruling your advice on value for money has been given you must ensure that the principles of economy, efficiency and effectiveness are adhered to as fully as is compatible with the ministerial authority.
8.4 If, because of the extreme urgency of the situation, there is no time to submit advice in writing to Ministers in either of the eventualities referred to in paragraph 8.2 above before a decision is taken, you must ensure that, if Ministers overrule the advice, both your advice and the Ministers’ authority are recorded in writing immediately afterwards.
9. Appearance before the Public Audit Committee
9.1 Under section 23 of the PFA Act the Auditor General may initiate examinations into the economy, efficiency and effectiveness with which any part of the Scottish Administration (or certain other bodies) have used their resources in discharging their functions. You may expect to be called upon to appear before the Public Audit Committee to give evidence on the reports arising from these examinations. You will also be expected to answer the questions of the Committee concerning resources and accounts for which you are Accountable Officer and on related activities. You may be supported by other officials who may, if necessary, join in giving evidence or the Committee may agree to hear evidence from other officials in your absence.
9.2 You will be expected to furnish the Committee with explanations of any indications of weakness in the matters covered by paragraphs 5 above, to which their attention has been drawn by the Auditor General or about which they may wish to question you.
9.3 In practice, you will have delegated authority widely, but cannot on that account disclaim responsibility. Nor, by convention, should you decline to answer questions where the events took place before your designation.
9.4 You must make sure that any written evidence or evidence given when called as a witness before the Committee is accurate. You should also ensure that you are adequately and accurately briefed on matters that are likely to arise at the hearing. You may ask the Committee for leave to supply information not within your immediate knowledge by means of a later note. Should it be discovered subsequently that the evidence provided to the Committee has contained errors, you should let this be made known to the Committee at the earliest possible moment.
9.5 In general, the rules and conventions governing appearances of officials before Parliamentary Committees apply, including the general convention that civil servants do not disclose the advice given to Ministers. Nevertheless, in a case where you were overruled by Ministers on a matter of propriety or regularity, your advice would be disclosed to the Committee. In a case where you were overruled by Ministers on the economic, efficient and effective use of resources the Auditor General will have made clear in the report to the Committee that you were overruled. You should, however, avoid disclosure of the precise terms of the advice given to Ministers or disassociation from the ministerial decision. Subject where appropriate to the agreement of Ministers you should be ready to discuss the costs, benefits and risks of options considered. You may also be called on to satisfy the Committee that all relevant financial considerations were brought to the attention of Ministers before the decision was taken. It will then be for the Committee to pursue the matter further with Ministers if they so wish.
10. Absence of Accountable Officer
10.1 You should ensure that you are generally available for consultation and that in any temporary period of unavailability due to illness or other cause, or during the normal period of annual leave, there will be a senior officer who can act on your behalf if required.
10.2 If it becomes clear that you are so incapacitated that you will not be able to discharge these responsibilities over a period of four weeks or more, I should be notified so that I can appoint an Accountable Officer, pending your return. The same applies if, exceptionally, you plan an absence of more than four weeks during which you cannot be contacted.
10.3 Where you are unable by reason of incapacity or absence to sign the accounts for which you are directly responsible in time to submit them to the Auditor General unsigned copies may be submitted pending your return.
Principal Accountable Officer for the Scottish Administration
Page updated: March 2019