06 January 2006
Audit Scotland has published new guidance on the issues and risks faced by public bodies in the latest stage of its efforts to modernise the scrutiny process.
The watchdog's Priorities and Risk Framework (PRF) for local government and the health service is an audit tool that will be used alongside other initiatives to allow a better understanding of public bodies and the issues they face.
It will enable Audit Scotland to report early on strategic risks, effectively target more detailed work and support both local and overview reporting.
The PRF initiative coincides with Audit Scotland's successful test of its modernised audit approach in local government.
The new-style audit includes an annual report for councils, health boards and other public bodies that focuses on the priorities and risks and considers how well these are managed.
Hugh Hall, managing director of audit services, told Public Finance that the modernised audit process allowed a view to be taken on the different issues facing public sector organisations.
He added: 'We're not abandoning the financial statements audit, which will continue, but we are taking a wider view of the organisations and trying to understand their business and the priorities and risks they face. We're looking at this from a national perspective but it is essential that we are always sensitive to local priorities and risks.'
Hall described the PRF as having the potential to be a very powerful tool in terms of risk management.
The eight topics selected for the PRF, following a consultation with public bodies, are: the role and development of elected members; 'working together for communities and users'; efficient government; performance management; improvement and financial strategy; workforce management; strategic planning in social services; and a strategy for housing.
According to the PRF document for local government, councils are working in an environment of change and the period up to the 2007 elections, when a proportional representation electoral system is due to be introduced, will be no exception.
The document states: 'By using PRF in combination with other activity to identify risks which are unique to individual councils, auditors gain a better understanding of the business priorities and risks facing the organisations they audit. This in turn assists auditors in deciding where to target audit resources.'
A separate document produced for the health service looks at areas such as governance and management and strategy and planning.
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