Fawr, I welcome members of the Press and Public to the fifth meeting of the Public Audit Committee in 2016. I first of all ask all those present to ensure that the electronic items are switched to flight mode so that it does not affect the work of the committee. I have a number of apologies today. Apologies from Tabry Scott, Richard Simpson and Colin Beattie. I welcome Sandra White, who is substituting for Colin Beattie, and Mark Griffin, who is substituting for Richard Simpson. Sometimes this is Mark Griffin's first 10 that's at Public Audio Committee, and I invite him to declare any interest relevant to the work of the committee. Thanks, giving that no relevant interest to the clear. I move to agenda item number two, which is a decision to take items number six and seven in private that we take all consideration of our legacy paper in private future meetings. I will log in. ofs—AGS—report yn title, The 2014-15 Order of Scottish Police Authority. Rwy'n rhaid i chi i gael i'r panel of witnesses. First, Paul Johnson, who is the interim director general of learning and justice of the Scottish Government, John Foley, the chief executive, Andrew Faniggin, the chair of the Scottish Police Authority, and Philip Gormley, QPM, chief constable of Scotland. I understand that Mr Faniggin would like to make a short opening statement. Good morning, committee. Thank you very much for the opportunity to say a few words. I'm going to restrict my opening remarks to the three areas that the committee gave consideration to in its session last month with Audit Scotland. Firstly, financial controls. I've been a chartered accountant for almost 40 years and I've never before received such a serious audit report. It's important for me to say that I fully accept the recommendations of the auditor and these will be implemented. I do not expect such a report to be repeated and I will do everything necessary to ensure that it is not. I fully recognise the need for improvement and you will hear today how we plan to address that need. Amongst other actions, we've recently appointed an interim chief financial officer, Karen Kelly, to oversee the discharge of the recommendations made by Audit Scotland and other financial matters. The duration of this appointment will be for approximately three months. Karen is a former chair of the Chartered Institute of Public Finance and Accountancy in Scotland and she has more than 20 years of senior public sector finance experience the last decade with the City of Edinburgh Council at its head of financial services and corporate programmes. We've also recently appointed a well-known Scottish firm of accountants, Scotland Chief as our internal auditors. This appointment was made following a robust public sector procurement process and we look forward to positive engagement with them in providing assurance on our financial controls and processes. I'm also seeking to use current board vacancies to recruit two senior finance experts as new members as soon as possible. The next point is on the latest financial information and the forecast outturns for 2015-16. Our latest financial information, considered by the SPA earlier this week, shows improvement in the forecast position for the year-end, since that were last reported to the board in December. While that is encouraging, it is not yet fully balanced and the SPA expects Police Scotland to continue with the rigorous approach to minimising spend until the year-end. While acknowledging that there are overspends and underspends across the various funding streams, when considering those in the rounds, that equates to a financial forecast position, which is less than 1 per cent from a balanced year-end position. Clearly there's still further work to be done before the end of March so that we have the best possible position, which to start the next financial year and which to build the next phases of police reform and improvement. Finally, the development of a long-term financial strategy for policing by the end of March. The current financial and corporate strategies come to an end at 31 March 2016. Those strategies have already delivered considerable financial benefits to policing and, with the level of savings achieved to date, we are confident of achieving the saving target of £1.1 billion by 2026, as set out in the outline business case for police reform. We also now have clarity on the funding for 2016-17. Our financial strategy will be based on delivering a balanced budget next year. The strategy will also demonstrate our assumptions about how to sustain policing over the next three to five years and beyond that. Our plans will be robust and identify realisable savings and cost reductions in areas like workforce, estate, fleet, procurement and technology that are recurring in nature and which will therefore roll forward into future years. Such evidence will provide ourselves, Parliament and the public with confidence that policing has a realistic and tenable approach to delivering a sustainable police model moving forward. I believe that we can deliver those things by the end of March, including a joined-up plan of action that will set out how we can sustain policing through to 2026. I have seen nothing in my time so far to suggest that the goal of £1.1 billion of accumulated savings is unattainable. I will first open and clarify with you for the record that you are the accounting officer for the Scottish Police Authority. The accounting officer is John Foley, the chief executive of the Scottish Police Authority. John Foley would be the chief executive for that. Perhaps you could clarify, and it would be a fair statement for me to make, that we would have heard similar commitments from previous chief executives and accountable officers in the past, so what makes it any different from what we have heard before? Can you clarify for the record as well when you were appointed to your organisation the same for you as well, Mr Finlay? I was appointed to the Scottish Police Authority in September 2013. In relation to statements being made that we will achieve the £1.1 billion, we are absolutely confident that that will be the case. We have delivered substantial savings to date within policing. That is not the question that I have asked. I do not know that you have ever appeared before any of the committees before, Mr Foley. Yes, but not before the Public Audit Committee. Yes, and you would have given them previous commitments to meet the targets that were set by your organisation. What should we hear today that is any different from what has happened before? I will take it well for the internal auditors appointed before. That will not be the first time that you have appointed internal auditors, so what is so different from what has happened previously? Well, in terms of what has happened previously, we did achieve our financial targets in the first two years of policing and, in evidence to committees before, I have made those statements and they have been achieved. As the chair pointed out, we are still working to look to close the budget for this year. The work that we have done to date would suggest that, as we move towards 2026, the recurring nature of the savings achieved to date would mean that we have in the region of 85 per cent of the £1.1 billion in the bag as we sit here at the moment. That would mean that, moving forward, if we achieved, for example, £16 million worth of savings in the forthcoming financial year being 1617, that would give us approximately 100 per cent of the savings by 2026, and that is consistent with what I have previously reported to Parliament. Can we get back to the issue of the reporting of the expenditure and income for the organisation, and particularly in relation to the reform funding that is provided to you by the Scottish Government? The Auditor General has highlighted some concerns in connection with the fact that £21 million remains to be unaccounted for her. There are some issues concerning the reporting of that expenditure. Would you expect to write out a check to me for £21 million or to come back to you and tell you that I have spent it in some context that has not been clarified in my accounts? To answer the question, convener, there is not a lost £21 million within the accounts that has all been accounted for in the balance sheet. I believe that the point that the Auditor General was making is that in the body of the accounts, as reported, there was a figure of £21 million, which was identified as additional reform expenditure. By that, it was not expanded out, so there was no breakdown of the £21 million, but we have a breakdown of the £21 million, and that is consistent with the audited accounts. In relation to the reporting of it, do you recognise that the reporting of that could have been improved? Indeed, convener, I fully accept that that could have been improved within the annual report. I would like to give a commitment to the committee today that, from this year on, all reform expenditure will be broken down in more detail within the statutory accounts to enable the Auditor General to have more clarification of what the expenditure relates to. Why was it not included in the first place? The reason that it was not included in the first place is because it was believed at that point in time that that level of detail was sufficient. Clearly, the Auditor General took a different view on that. The Auditor General made that clear to me, certainly, and to the authority. We have accepted that position that the Auditor General put forward, and we will be addressing that moving forward. Are you satisfied with arrangements that were in place to record that expenditure? I am satisfied with the arrangements that were in place to record that expenditure. What I would say is that we need to improve the transparency of that information for the auditor and for the wider public. Could that have been improved before the information was provided in the accounts in the first place? Indeed, convener, it could have been improved. We have taken that as an improvement action, although not specifically a recommendation, but we have decided that it should be treated in the same way as a recommendation, and it will be improved moving forward. I come back to you, Mr Flanagan, on some of the actions that you have set out. Can you confirm when you were appointed as the chair of the police board? Certainly. I was appointed in September of last year. Can you advise us why some of the actions that you have taken forward were not taken forward before? Do you advise us on some of the additional financial controls that have been brought forward? I think that something like the gap in internal audit was a procurement issue and a vetting issue in terms of getting the new team in place. What was the gap in internal audit? The previous internal auditors were PricewaterhouseCoopers, and their period of office came to an end in March. There had been an anticipation that they would continue, but the procurement process through Scotland Creek was a better option. Why would they be a better option? They were more cost-effective, and a team that was more responsive to what we were requiring. In what way would they be more responsive? In terms of having available people at the right level, that was really the issue. It was the quality of the people that they were offering. You can understand the position that you have presented as being a step forward, but what you have done is that it has been part of the procurement process. There would have been a new auditor appointed anyway. What you are advising is that this is a major step forward because you have appointed a new auditor, and the auditor would be more responsive. You are advising us that PricewaterhouseCoopers are not being responsive to the police authorities? I do not want to be particularly critical of Pricewaterhouse. I think that the issue was that the gap was— You are advising us that the new organisation, the new orders of taking over, are going to be more responsive, so you have already done that anyway. I think that the issue for us is that when the issue around fixed assets came up, we did not have an internal audit team that we could put in to investigate the issues. Therefore, I think that created a gap that allowed the problems with fixed assets not to be fully addressed. I think that if the auditors had been in place at that point, we would have been quicker to respond to the issues. Therefore, the delays in the audit, which the Auditor General reported on, could have been avoided. By another auditor, another forum being in place rather than the one that was in place previously? Yes, because at that point we had no internal audit capacity at that point. So there was no internal audit that took place previously at all? No, the internal audit finished at the end of March, and the period in which the fixed asset problem began to be identified was through the summer of the year when we did not have a Scotland grief in place. Can I go back from bringing Mary Scanlon to confirm when you missed the folly then? Would it be correct that the Scottish Police Authority did not have in place an internal audit process? Is that correct? No, we had in place an internal audit process, convener, and we did have some internal audit capacity that was internal to the police authority, people who were employees and not members of staff of PricewaterhouseCoopers or Scotland grief. However, those people were not sufficiently qualified to undertake that work, so if we would have had Scotland grief in place earlier, I am sure that we would have. Do you not take some… Can you confirm for the record what your annual salary is? Yes, my annual salary, convener, is £110,000. It comes with significant responsibility, the role that you have as a accountable officer. Do you not take some responsibility for the fact that you did not ensure that the expertise, particularly in relation to internal audit, was not in place to prevent some of the challenges that your organisation faced? Do you not have highlighted that as being a significant area that could have wanted additional expenditure, particularly considering some of the challenges that your organisation faced really since it was created? To answer that, convener, the issue is that we have considerable internal resources both within Police Scotland, primarily in Police Scotland in relation to finance and some resource capacity, financial capacity within the police authority. Those are qualified accountants, senior accountants to deal with these matters, so it is not purely down to internal audit. Clearly, I have a responsibility as an accountable officer to ensure that appropriate resources and assets are in place. That would be the expectation in relation to the fixed asset reconciliations is that we would have had appropriate resources in place across the organisations. The internal audit aspect of it is a verification issue in relation to the work that other people have done. The procurement process took a little bit longer than we had expected. We started the process in good time, but it took longer. However, yes, I then have responsibility for the procurement process as well. Can you just finally summarise this? Possibly the organisation could have seen some losses as a result of that internal audit process not being in place. If you had the internal audit capacity, perhaps some additional savings and costs associated with organisations could have been reduced as a result of those internal audits being in place? No, convener, that is not the case because the issue that presented itself related to fixed assets is not an area where you can achieve savings in relation to that. There was no impact at all on additional savings potentially being achieved as a result of that situation. It was a situational reconciliation. It was the implementation of a new fixed asset register that was being put in place within Police Scotland to tighten up the financial controls. That was the principal point of it, but it had no impact on savings. So good financial management ensuring that you know where all your assets are located and everything else does not have an impact on how your organisation is organised and does not save money? Yes, good financial management, convener, of course overall does ensure that. However, that problem was specific to fixed assets. The issue that presented itself was that we had effectively 10 legacy systems that were required to bring into one, so there was no single fixed asset register across policing. That was work that was planned to be undertaken within the 14-15 calendar year, albeit that the work carries over beyond 31 March, which was the expectation. The issue that arose is that the work to take those 10 legacy systems into one took longer than expected and overran, so the attempt was to introduce and tighten up the financial controls took a little bit longer than we had anticipated. First of all, I am looking at changing faces to the ones that we have had here before, giving evidence. Paul Johnson, how long have you been interim director general of learning and justice? I also ask you how many people have had that job since the merger of our police authorities in April 2013. Certainly, good morning. I have been interim director general for learning and justice since June 2015, and my predecessor had held that role since prior to the merger of Police Scotland. There should be some continuity and some oversight. We cannot totally blame those guys. You had the oversight and the direction for the merger and the savings. My first question for whoever wants to answer it. The last time we had Vic Emery, Sir Stephen and others here, we were given the same promises, Mr Flanagan. I am delighted to see that you are a chartered accountant and I hope that I retire in a month's time, so I will not be here to follow up on that. To be honest, we were given all the promises that we had this morning three years ago, so you can understand that there is more than a wee bit of frustration and more than a wee bit of anger when I look at the report that we have got in front of us today. Three years ago, two months after you took up your post, Mr Foley, the auditor general highly recommended that you have a financial strategy. Nearly three years later, you are still promising a financial strategy. Why has it taken nearly three years? Well, I cannot account for my predecessor. Personally, as a chartered accountant, I take these kind of matters extremely seriously. It is not just about the role I hold, but the professional standards that I have to behave by. I would say that I have looked at the situation and found that some of it, in terms of what the auditor reported on, is unacceptable. I fully accept what they say, and it is my duty to fix those issues, and I seriously intend to do that. In terms of the accounting records, I think that we are in a much better position than we were several months ago. The auditor eventually gave a clean audit opinion in terms of our balance sheet and the fixed assets. I am satisfied that the new system that Mr Foley referred to is now up and running effectively, and those accounting record issues should no longer be an issue for the current financial year. In terms of the financial position of the organisation, I think that using the auditor's figures at the end of 2014-15, £122 million of recurring savings had already been recorded and achieved. If those savings are continued through the balance of the period to 2026—I see no reason why they cannot be maintained—we would have achieved over £900 million of the £1.1 billion of savings that is expected of us. If I look through what we still need to achieve, it would be a further £16 million of recurring savings each year for the remaining year. To be fair, we have covered a wee bit of that ground, but I am keen that it is very important that we look at the figures that we have in front of us today. In a letter from the Auditor General to you, Mr Flanagan, on 15 December, she highlights more than once that good governance exists with simple lines of accountability and effective working relationships between key individuals, and that those characteristics have not always been in evidence. We have heard on this committee and also on the Justice Committee and in the chamber of this Parliament that your predecessor and Mr Gormley spent their time getting lawyers to work out their job descriptions and to argue what their responsibilities and accountabilities are. This is a letter of the 15 December, where the Auditor General is still highlighting—perhaps Mr Gormley might not have been in office at that time. Can you confirm how long it is? Is it two months or three months? I started on 5 January, so I am into my fifth week. I hope that things will change on 5 January, but I would quite like to hear from you, Mr Flanagan, as the chair of the Scottish Police Authority and from Mr Gormley, that you will no longer be arguing over your job description and the point that the Auditor General is raising about clear lines of accountability and good working relationships and good partnerships moving forward are in place. I think that those things are essential. I fully agree with the Auditor General in those regards. Yes, there were difficulties in the exception of the SPA and Police Scotland about where the demarcation lines of responsibility fell. I think that most of that has been sorted out. I have been asked by the Government to do a governance review to build on the experience of the first three years and to make some recommendations. That report is due to the Cabinet Secretary by mid-March. I am pleased with the progress that we have made. As part of the recruitment process, Mr Gormley and I had a number of discussions about how the relationships should work between us and the respective organisations. I am satisfied that we will have good relationships going forward. I agree with that. My approach will be to work collaboratively and in a complementary manner to the Police Authority. In my experience, that is the only way in which we are going to generate light rather than the heat. I have no view about the past. I am actively engaged in the governance review on the independence reference group, as are a couple of my senior colleagues from the executive team. My approach will be to work in an entirely collaborative manner with the authority, recognising that we have different responsibilities. I have no interest in exchanging formal letters with the chairman. I think that the relationship needs to be predicated on trust and transparency. That is fine. It is important to get that on the record. It is what we would expect in any profession. Reading through the annual accounts 2014-15 annual audit of the Police Authority, I think that, despite the comments that you are making going forward, Mr Flanagan is one of the older members of the committee. As I said, I have heard it all before. When I read last night, a number of misstatements and presentational adjustments were identified. You are reported only on the misstatements greater than 90,000, and it is just as well, because we would probably be here all week. The misstatements are an error, and the presentational adjustment is putting the numbers in the wrong place. That is pretty fundamental, is it not? That accounted for an increase in net expenditure of £2.5 million and a decrease in net liability of £13 million. Hundreds of lines in the financial ledger were changed. I have never seen anything like that. I know that you are making great promises, but quite a few of you were in place when all that happened. This is public money, and you cannot even put your numbers in the right box, and you cannot even get your numbers correct. That is pretty damning, is it not? I think that it is not unusual in any organisation for the auditor to pick up misstatements and for those to be corrected. I did not, for the size of the auditor. Hundreds of lines in the ledger? Hundreds? Is that normal? Part of that remains a struggle in terms of the move from eight legacy forces and eight accounting functions into one. You have had three years. I agree that three years we should have perhaps made more progress, and I do believe that we can strengthen the financial function within Police Scotland. However, I do not think that the overall positioning in terms of there being some misstatements is unusual in terms of an organisation of this size, and the numbers themselves are within the context of materiality in terms of a £1 billion organisation. I am an economist, not an accountant, but it seems pretty unusual to me, so I will just ask briefly the further questions. In 2014-15, an overspend of £5.9 million was reported to the board, but it was not an overspend, it was actually an underspend. If you are going to achieve the savings that you want, surely you need to be a bit more rigorous. Given that conveners signalling me on, can I just say also in these accounts the register of interests? Now, I would have hoped that Police Scotland would set an example to all of us. We have got to obviously fill in our register of interests. Seven out of 12 members had incomplete sections, five out of 12 did not agree with the information held by the SPA, and there was no formal register of interests in 2014-15. That is surely pretty fundamental in terms of governance. That is my second question, and my third one, while I am here, I was shocked at the national fraud initiative. It seems to me that Audit Scotland had to remind you that that was a task, because it is probably for you, Mr Gawrnway, but of the process in the national fraud initiative, 3,743 records were identified for investigation and 261 recommended, as of 22 September, nothing had been done. In fact, what I am looking at here is the audit, the figures, the mismatch, etc., is affecting policing in Scotland. We have been very proud of the national fraud initiative. We have had a report on this committee about the national fraud initiative, but I think that if many people out there think that you are languishing about following it up, it is not sending out the right signal. Three questions. I agree that the register of interests should be a matter of basic housekeeping, and therefore it should have been done. There is no excuse for that. You will ensure that it will be done. Yes, it will be done. There is no question. Okay. Mr Gawrnway, the national fraud initiative, that is pretty poor, isn't it? I am not cited in the detail, so I will go away and have a proper hard look at that in terms of what that means for us operationally and organisationally. I do believe that Audit Scotland is following it up. How does an underspend become an overspend? How can you ensure that that does not happen in the future? Page 14 of the accounts. Yes, and some of these points just to provide more clarification. In relation to the declaration of interests, that has now been addressed. We set up a separate governance unit in the authority to ensure that items such as this are covered off. As we sit here at the moment, that is something that is in place. Is it a bit embarrassing that the Auditor General has to tell you how to fill in your declaration of interests? Is that not a wee bit embarrassing? Well, yes, it is. That is one of the reasons why we have revised our internal governance structures, as I said, to put that in place. That has been dealt with. In relation to the national fraud initiative, that, too, is being addressed. That is a point well made also. I believe that meetings took place last month in relation to that, and that will be something that is addressed moving forward, the capacity to do. That is nine months after it was out. After 3,743 records were identified, nine months later you are having a meeting. Well, additional capacity has now been put in place to address that moving forward as well, so that will be addressed. Just a couple of quick questions. I am just going to touch upon a couple of the points from the report. Page 2 highlights under the financial management and sustainability issue of the cash overspend on page 3 under outlook. It states that there has been prolonged interruption in the delivery of internal audit services. Page 7, paragraph 8, the draft accounts are incomplete and have been subject to substantial revision. On paragraph 10, there was a failure of a senior member of management to take ownership of the fixed assets transition. On page 21, paragraph 37, there are tensions in such arrangement. That is regarding the time that it was taken to allocate and appoint staff to the two finance functions. Clearly, the situation that has taken place over the course of the last year has been quite appalling in terms of the internal controls. We have already heard a fair amount this morning from yourselves in terms of fully accepting that there have been problems and that that will not happen again. What assurance and guarantees will you provide to the committee that, in 12 months' time, whoever is sitting at this table questioning yourselves when you come back in after a further audit Scotland report, we are not going to be going through the same process again? If I take the points, the auditor also said that, with the exception of fixed assets, a number of improvements to internal control had already been achieved and the only concern was related to fixed assets. As Mr Defoli has explained, we were in the process of bringing together eight fixed asset registers into one. That did not go well in terms of what happened. It was exacerbated by trying to put through a revaluation of fixed assets at the same time as trying to complete the annual accounts. That made it difficult for staff and the auditor to get a proper reconciliation of the fixed assets. We are confident that that was achieved completely to the auditor's satisfaction and that allowed the auditor to sign off the accounts for last year. Therefore, we see that as a solid foundation in terms of moving forward. Accounting for fixed assets should be one of the simpler aspects in terms of moving forward now that that reconciliation is complete, because there is not that many transactions in any given year in terms of additions or disposals. I am quite confident that, in terms of accounting records, we have made significant progress even in the past few months. In terms of the ownership and responsibility at a senior level, that was one of the reasons that I concluded that we needed to have a single point of leadership in the interim period. That was why we decided to appoint a chief financial officer. We already see some benefits, even though she has only started very recently, in terms of making sure that the co-ordination between the two organisations is in a much better position. On page 24 of the report, there is an exhibit at the top left-hand corner. Two of the boxes I found genuinely very interesting. The first of them was the United States Arrangements for the Prevention and Detection of Fraud and Corruption Require Strengthening. It then goes on to talk about the next box that has been prolonged interruption in the delivery of internal audit services. We have already touched on the internal audit earlier on this morning, but in terms of the fraud and corruption require strengthening, I am keen to learn about what you plan to do about this particular area so that this situation does not arise again next year. In some ways, that goes back to the previous point in relation to the national fraud initiative. We have taken steps to increase capacity across both organisations to deal with that, and that will assist with addressing that particular issue. On page 29 of paragraph 80, it follows on from that point. How many additional people are you bringing in to deal with this particular situation regarding the national fraud initiative? The capacity that we have increased will not be in the form of additional people. It is increasing the quality of individuals over the people that were there before. As an organisation, we are moving through a period of clearly reform where individuals have left the organisation on a voluntary basis. Occasionally—and it is only very occasionally—we need to appoint new people to strengthen in particular roles, and an appointment was made towards the end of last year, which will assist with that process. Is it really just about any additional training being offered to existing staff as well to assist them? In terms of additional training requirements, it is not something that existing staff are picking up. It is an additional resource. It is a system that is fairly basic. It is not something that requires a great deal of training. My final question regarding community planning partnerships is page 33, paragraph 97, where it states that many CPPs are still not clear about what they are expected to achieve and there is confusion over whether the focus on community planning should be more on local needs or delivering national priorities. Now, it could be argued that that particular paragraph and the issue of the CPPs should be discussed in more detail at the local government and regeneration committee as compared to here, but obviously the police Scotland do have an important part to play in community planning partnerships. I have a huge level of involvement there. In terms of your own opinions and views, is that an accurate statement? Do you think that Police Scotland should have a further input into CPPs at local level? Or do you think that the general direction of CPPs is unclear, as the other general highlights? That is an issue that has come up through my governance review in terms of the work stream on local community involvement. A lot of local authority responses to the consultation document have focused on the issue of the local scrutiny boards and that being the primary focus of Police Scotland's engagement at a local level. A basic thrust of many of the contributors to the review has been that we must take a much wider view, including community planning partnerships, in terms of that engagement that is too narrow a focus through the scrutiny boards themselves. I would expect to come forward with recommendations on that issue in terms of my review when it is published in March. Are there any particular themes up to now that you are able to inform the committee that half came out of the information that you have received? Yes, I think that there is clearly some variability in terms of engagement in terms of Police Scotland with local scrutiny boards in terms of past experience over the past two to three years. There is a need for a more responsive approach from Police Scotland in terms of the kind of national services that they provide through their specialised crime, which is organised on a national level, but in reality is delivering services at a local level. Too much of the focus is through the local divisional commander from local policing, so there is one issue for us in terms of engagement with those specialised services into the local community. The second thing is that where there are differences of opinion between the local scrutiny board and Police Scotland, there is no method of resolution or escalation of those issues. We need to more formalise those approaches and to involve the SPA as in when necessary if there is no agreement between the two organisations. I support all of that. In the early conversations that I had, not within the Government's group to be fair, but with two or three chief executives of local authorities in the last three or four weeks, I think that there is work to be done in terms of us as an organisation Police Scotland explaining the impact and the rationale for national decisions on local both directly with local authorities, but also making sure that internally we are connecting up and enabling our divisional commanders to influence national decisions as effective as we need to. Good morning, gentlemen. I would like to start, if I may, by just looking at what was funnily described as two finance functions. I think that we are probably both old enough to have put numbers in columns in ledgers and things in our time in pencil. I cannot help the feeling that the SPA, which is what, two per cent of turnover or something would of those days have been one single column in the cash book and another one in the capital ledger, so I am struggling to see in the context why they really are too separate financial, I know structurally they have to be, but surely they really are, the SPA is surely a very, very small subset and you might need two finance directors in name. Why on earth do you need a third one to sort that out? The SPA finance function consists of two people and therefore, yes, you are absolutely right, it is a very small function and it is therefore review analysis and assurance. Personally, my own view coming in is that there should really only be one finance function, everything that the SPA needs can be provided from a single function. My issue is not so much with that structural separation, my issue is that we need better and improved information flows so that the board of the SPA can make proper assessment of the financial position of the organisation and it is that that needs clarification rather than a structural issue around finance organisations. Okay, we are obviously in roughly the same place. Can I then, and I would like to spend a bit of time, if I may, thinking about the structure of the board and the governance of what is going on. From the perspective of everybody around the table, if I may, the Auditor General makes some comments about the Audit and Risk Committee. I am sure that those structural points will not have eluded you. Can I start with Mr Johnson? What does the organisation of the police look like as far as the Government is concerned? Where are your lines of communication? Where are your points of information? Where is your influence that is not necessarily controlled? What we have put in place is an overarching structure for governance and accountability in relation to policing. There is a detailed document that can be shared if you would find it helpful to see it, which sets out quite clearly respective roles and responsibilities. Those that sit with the Scottish ministers, which includes the financing of the service, the setting of overarching strategic priorities, and those that sit with the police authority, which in particular includes the governance and accountability of the police, and the detailed responsibilities that sit with Police Scotland. We have the structures in place, and we play a very active role in working with both the police authority and Police Scotland to ensure that those structures are working in practice. When you are looking at a situation that we have, which is a small projected overspend, so let's recognise that it is relatively small but nonetheless significant sums of money, what are you, as the director of this, doing to and with them to try and change that? A range of things are taking place at present. Personally, the chair and I meet regularly in order to take stock of the progress that is being made in relation to both SPA and Police Scotland. Members of my team have very regular engagements with finance leads within SPA and Police Scotland to work through the detail of the numbers. We will seek to support and advise SPA and Police Scotland as they work through a range of options for the delivery of financial savings. We also have an oversight function in relation to reform funding. There is a decision-making function there that the Government exercises, and we will seek to ensure that reform funding is used in a way that most effectively secures long-term savings from police reform. Can I come to the SPA and ask you about the committee structure? If I can pick up on what Mary Scanlon has just been saying, she was here three years ago, I wasn't in the seat three years ago, all the things that the Auditor General has been reporting happened on somebody's watch, and the watchers included these committees of the board who don't seem to have achieved very much in getting some of this corrected. I'm wondering if you could explain to me how that's supposed to work, please. The committee structure is relatively conventional, so we have an Audit and Risk Committee, and we have a Finance and Investment Committee, with what I would see as relatively conventional responsibilities. I think that there are issues that, as I touched on in my opening remarks, we have not had the depth of financial experience on those committees or on the board as a whole that I would have expected for an organisation of this size. Some of that is because previous members—there was the chair of the Audit and Risk Committee, for example—had a long-term health condition and had to step down and was only replaced in April of last year. However, I would still go to the point that, apart from myself, when I was only appointed in September, I would only have one person who has an accounting qualification on the board. For an organisation of our size, I don't find that sufficient in terms of populating both a Finance and Investment Committee and an Audit and Risk Committee. Can I absolutely agree with you? Can I ask how it was that we got to that position? I think that—I'll be sorry, it was before your time. It was before my time. Structurally, how do we get to a point where the board—we've got 12 board members or whatever it is—and only two people understand how to deal with the numbers? That doesn't sound like good governance at any level. Originally, the composition of the board stressed skills from the local authority police boards and the experience of that to help to manage the transition. That was probably reasonable at the time. In terms of looking at it now—again, this is something that I am considering as part of the governance review—I am looking at the committee structures and doing it from an entirely fresh, skills-based approach in terms of what we need around the table. I am recognising that that gap exists and moving to address it as quickly as possible. I just want to ask—sorry, the new chief constable for giving me the short end. Mr Gormie, I appreciate that you are very new to this, but what does this look like to you because you have seen the structures of one sort or another elsewhere, of course, in your career? The structures look familiar. I don't want to rush to judgment because this is a different context, but the way that committees are structured—the responsibilities, the accountabilities that they have looked to me are rational and familiar. As to the quality of the composition of those, that is clearly a matter for the chairman, and he describes some of that. From the police service of Scotland's point of view, the structures look sensible, and I think that we can properly support them. I think that the issue going forward is that we need to make sure that we are collaborating and being complementary to those. Some of the history of this appears that that may have been there for improvement. If you and your colleagues—of course, you cannot conceivably be everywhere doing everything, so I recognise that you have a staff team, as you would need—do your colleagues have confidence in the team with whom they have to operate for what is effectively their financial and rational? I think that there are relationships that are building very quickly, as my experience in the past five weeks. The governance review, I think, is the route through that. There is very active engagement between us in Police Scotland and the Police Authority to make sure that there is some co-creation here. We are ensuring that our own governance reviews are proceeding in a way in which we end up with a three-pin plug and a three-pin socket. Those needs are stated to connect properly. I am optimistic. Thank you, convener, and good morning to you. Congratulations on your appointment, chief constable. I think that a number of the things that I was looking to ask have already been brought forward. There are a couple of things. Obviously, just to be on the record, I am sure that life would be an awful lot easier if you did not have to be the one organisation in the UK that had to be VAT. On 26 million quid would come in quite handy, I should suspect. However, one of the things that has been bothering me really since I have read the various reports, and it is in terms of the pension liabilities that comes through on page 11 on the document that we have got here. The overall pension liability increase is 20 per cent. Obviously, you have a reasonable idea of what your pension liabilities are going to be over the coming years, but was that known and how is it identified? Quite frankly, how do we get around it? How did we get into this position? I do not think that the police pension fund is in any other situation than most public sector pension funds that are impacted significantly by reducing discount rates, which is pushing up the liability, and by increasing longevity in terms of life expectancy. That is impacting on all pension funds around the public sector. We are not, as Police Scotland, entirely in control of this situation because it is done on a national UK level. However, there have been steps taken to try to reduce pension obligations by extending the amount of years that people have to serve in terms of moving it from previously 30 years—I believe that it is up to 35 years now—that the service has to be before you get full pension rights. That has a mitigating effect, but compared to issues such as the discount rate and longevity, it is not offsetting entirely the increases that we are seeing. I will take that a little bit further. I understand that you are not dealing with the management of this in whatever, but it is something that I have brought up with the Auditor General in the past, and it is the linkage between the UK and the Scottish schemes, the way that this is set up for officers in whatever. I am a bit unclear about how that works. Obviously, in terms of manpower south of the border, if there was a case of a linkage between the two sets of pensions, if you have a situation where, as I understand it, south of the border there is a decreasing amount of officers in service, that would obviously come through in terms of the overall pot, although I understand the SPPA here in Scotland. I am just a bit unclear as to the management of that. How does that actually work? If there is a linkage with the UK, that could have been a fairly serious consequence to anything that is managed here, would it not? I think that you are right to indicate that pensions liabilities are significant. Indeed, as you are aware, the Scottish Government has prioritised the maintenance of very high police officer numbers. Indeed, there have been very significant reductions in England and Wales, the figures that I have indicated that had a similar approach being adopted in Scotland. As in England and Wales, there would be around 2,900 fewer officers in Scotland. Of course, that has an knock-on impact on pension liability, but I should also make it clear that those liabilities are paid from Scottish funds separately to the funds that are allocated to the Scottish Police Authority year on year. If you look at the draft budget documentation, in addition to the SPPA's funds, which have been protected for the next financial year, but in addition to that, there is a separate figure of, I think, somewhere in the region of £350 million for the payment of police and fire pensions. I am just to be absolutely clear, because I am not qualified in any shape or form in pensions and stuff like that. Historically, and with the changes that have happened, there is no danger to the pay. This is just what is happening in Scotland that is affecting this. What happens with the decreasing amount of money being put into the general pot that is not going to have an effect on Scottish pensions? I would want to be clear that there is no risk to the payment of pensions in Scotland of our police officers and our Scottish fire and rescue service officers. The arrangements for the payment of those pensions are for the Scottish Government, not for the UK Government. While there have been schemes—indeed, there are schemes—that operate across the UK, the responsibility for payment is a matter for the Scottish ministers. Separate provision is made to ensure that that payment is made in full. The administration of that is a matter now for the SPPA. I am trying to get the fact that, overall, is there a risk that the Scottish Government ends up having to pay more because of what is happening elsewhere? I do not think that there is a risk that the Scottish Government is paying more because of what is happening elsewhere. I think that there is a significant liability, partly in light of very significant officer numbers, but those costs are being fully met. Thank you very much. Good morning, gentlemen. I wanted to take you back to the financial management and sustainability part of the Auditor General's report, page 19, in paragraph 32. I would like a bit of clarification or explanation to do with the high level of cash and cash equivalents held. In the report, it mentions that the SPA held 93 million pounds, which is a high balance of cash and cash equivalents. At the year end 2013-14, 83 million pounds was held. Could you clarify for me exactly what that means? The cash held. It is obviously different from the previous one that you were talking about, where you accepted the Auditor General's recommendations to do with assets. For someone who is not familiar with this, what does it mean by cash held? Essentially, that refers to the amount of physical cash that the authority would be holding in bank accounts at that particular point in time. The Auditor General said that it is exceptionally high and that there really no need for this amount of cash to be held. Can you explain why I see in the recommendation of the management's response that you mentioned it to your undertaking of fortnightly cash flow reviews? Do you accept that that is exceptionally high? It is a high figure. It is not to any great detriment or any detriment at all to the authority. What we are doing now is we have made moves to try and improve what we would describe as the cash flow management as we move through a year. Effectively, when the forces came together, the legacy forces, we inherited large cash reserves, so the move would be to try and reduce that amount of cash held. It does not have a major impact at all on the organisation, but I would accept the point that the Auditor makes. It is an accounting issue. The Auditor General mentions that it is provided to match the recipients' cash needs. Does it have a knock-on effect on any way of borrowing, as far as I can see, if you are wishing to borrow against it, if you had this as a cash equivalent? I do not think that there is any impact on borrowing whatsoever. Certainly, from a Government perspective, we accept the comments made by the Auditor General and we are expecting the Scottish Police Authority to work through all the issues of which this is one, but I do not understand it to have any particular negative impact on our overall accounts. It is more of a timing issue in terms of its fixed point in time when you take a snapshot of what you have in the bank and then a week later, a month later, that figure will be different and it could be significantly different. The issue is that as we move towards a financial year-end position, we are trying to rationalise the amount of cash reserves that we hold at the 31st of March, so it is a timing issue. It is just that the Auditor General's recommendations and comments mention that holding the amount of cash in advance puts unnecessary strain on the public sector borrowing requirement. That is part of the Auditor General's recommendations. I am a bit confused when you say that it does not have any impact at all. Is that the norm that you would hold the amount of cash equivalence in a bank, such as £93 million? It is worth noting that a very high proportion of the SPA and Police Scotland's cost basis are parol, something like 90 per cent of our costs are staff-related. Therefore, there is immediate payment needs in terms of, for example, national insurance or PAYE that has to be passed over to HMRC very shortly after the end of a month. Therefore, compared to some other organisations, it may look very high. There is always a need for us to make sure that that is minimised. That is what the Auditor General is saying, that we perhaps have been too generous in the amount of cash allowance that we have got. Clearly, at some point, when it is consolidated into Government borrowing requirements, it may have an impact. However, the cash management of the Government as a whole would be a matter for the Scottish Government. It would be encouraging us to trim down the amount that we need to hold in reserve. However, as I said, the very short-term nature of the payments that we are making will contribute to that being quite a high figure in any event. You mentioned in your comments that it could have an effect on borrowing, and you have been encouraged not to hold as much cash in reserve. Can you clarify that? Earlier on, you said that it did not have any effect. Can you clarify what you are saying? The Auditor General obviously said that it puts a necessary strain on the public sector borrowing requirement, and you just said that it could have an effect, and the Scottish Government would be encouraging you not to have as much cash in reserve. However, you do not seem to accept the action plan in the comments that you have just made. That might be an issue more about where the money is sitting. If it sits with us rather than sitting with the Scottish Government, that does not change the borrowing requirement per se. The money is still there. The question is whether or not, if we can say to the Scottish Government that we need to hold less, at some point along the chain, could they actually manage to squeeze a few million pounds out of the borrowing requirement? Possibly, yes. Equally, we do not want to be in a situation where we cannot meet our responsibilities in terms of paying payroll or paying HMRC, so there is a balance to be struck. The balance would either be positively on either your side or the Government side. You mentioned the fact about maybe squeezing a few million. What did you mean by that? It said in the auditor's report that it had gone up from 10 million the prior year, and therefore maybe that is where we could look to see if we could squeeze that down back to the levels previously. Clearly, as we have been reducing our cost base and squeezing out particularly payroll costs, maybe there is some opportunity there to reduce the amount of cash that we hold. If you reduce the amount of cash from 10 million to 4 million, that 6 million would be back into the Government. It would sit with Government and they would have to put that together with all the other cash positions that they have from their own spending and decide whether or not that ultimately reduces the net borrowing requirement that they have. It does have an absolute direct effect on the net borrowing requirement regardless whether it is your net borrowing or the Government's. If you trim that down, the Government would have more moneys within its coffers than sitting in a bank account topping up to 93 million pounds. It would have more money available, whether or not it could use that money to reduce the borrowing requirement would be a matter for them to look across the horizon of their spending needs. There is a timing issue about when payments are made to the police authority. My suggestion would be that we continue to work on that issue and could certainly provide a written update to the committee on it. I would want to be very clear about what our guidance is on how much cash should be held by the police authority at any particular period in time. I do not have that figure in front of me, but I am happy to follow that up in writing if that would assist. Over the issue of transparency of reform funding that the committee touched on earlier, Mr Johnson, the Government provided £67.5 million for reform. The Auditor General's report flagged up that it was not clear what £21 million of that budget was spent on. That is a third of the budget that the Scottish Government provided for reform funding. Did you share the concerns of the Auditor General? Let me say a little bit about how the reform funding is managed in the first instance. It is funding that is held initially by the Scottish Government. We receive detailed bids supported by business cases from the Scottish Police Authority, who work with Police Scotland. They make a case to us for the most effective use of that reform funding. We consider that internally. We also disperse funding on a case-by-case basis. As you see from the accounts, much of that funding goes to pay things like early severance. As Mr Keir has mentioned, a significant amount of it goes to pay VAT. You will be conscious that that is an issue that Scottish ministers continue to engage with UK ministers on. It is the case that the £21 million was referred to in global terms in the accounts, and a more detailed breakdown was not provided in the 14-15 accounts. I agree absolutely that, moving forward, that more detailed breakdown should be provided. However, I would want to assure the committee that it is available, that those in my team who are dealing with reform funding can absolutely see the use that has been made of all that reform funding. I can go through some of the various ways in which it was used in 14-15. If that would be helpful, or again if it would be helpful to follow that up in writing, I can absolutely do that. However, I would want to assure the committee that from a Government point of view, we are very clear about how the reform funding has been spent. I have a supplementary question to Sandra White. I do not know whether it is Mr Johnson who wants to answer it or not, but I wonder if I can seek a bit of clarity. I find it quite confusing that there is a funded local government pension scheme that is run by eight separate local authorities. There are two separate unfunded schemes, the police pension scheme and the new police pension scheme. If that was not okay, I have glanced over it, but further down in paragraph 44 of the Audit Scotland audit, it is stated that we would have expected this project to have featured in the risk registers. How complex is it to have one funded and two unfunded schemes and to look at a background of serious financial constraints to local authorities? How complex is it and is there a risk going forward with the scheme? Can you explain to me if the eight local authorities are still running the funded scheme? I am struggling to get my head round the operation of it. I am not hugely familiar with the detail, but what I think is the issue is that police staff and support staff would have been in the pension schemes of the local authorities to which their police body was originally allocated. Those arrangements would continue in place rather than creating a new pension fund for Police Scotland support staff. It is probably simpler because it avoids the trying to transfer liabilities from existing pension funds into new ones. Serving police officers were they never in the local government funded scheme? No, they were in their own scheme. Police officers would be in the UK national schemes and those are unfunded schemes. The fact that there are two will reflect the change in the length of service arrangements. It is easier, often in terms of major changes to pension conditions, to establish a new scheme looking forward and to preserve the benefits in the old scheme for those members. The new police pension scheme is the Scottish one. The changes to the pensions in terms of extending the length of service apply to all UK police officers. It was not just a Scottish change. I am sure that you appreciate that it must be quite complex having three separate pension schemes given that we are looking at better collaboration and working together. It is just when the Auditor General says that she would expect this to be on a risk register. Yes, and I would agree with the point about it being on the risk register. That is an omission. However, again, because the pension schemes are managed by, in effect, other parties, one could have a debate as to whether the risk is sitting with ourselves in terms of pension liability or whether it sits with central government. That is potentially why it was not being flagged on our risk register, but my own preference would be to have it signalled even if we are managing it through a relationship with other parties. Do you feel that having three pension schemes is a workable solution and brings security to members of staff going forward? I think that it is better for the members of staff that they are in the original pension schemes that they were in. I think that that preserves their benefits in the long term, in a much more effective way. Trying to unpick those arrangements simply for administrative ease, I do not think that that would be the right course of action. Just ask a question of yourself, Mr Follie. As you have confirmed that you are the accountable officer and you have been since 2013, so looking at the annual audit report that is carried out, I take it that you are personally responsible for ensuring that the action points in the document are implemented. Indeed, convener, that is my personal responsibility and I would like to assure the committee that the actions have been taken on board. We have an audit action plan, which is in place, and all those actions will be delivered and reported back through the authority and back to Audit Scotland. You have been responsible for the previous three audit reports since 2013, is that correct? Since 2013-14, yes. If I referred you to paragraph 9, page 15, of the current report, 2014-15, it says here that members' expenses, and it says that we recommend that 2012-13, that the members' expenses policy and procedures be reviewed and updated. Despite being agreed by the management, that has not been done in 2013-14-15. You are personally responsible for ensuring that that is updated, why it was not updated. It was not updated to the standard that I would expect to be updated. It was updated, we do have now. Can you tell me about the fact that members' expenses are headed here? Maybe for the benefit of the record, can you confirm that that is referring to board members? Yes, that is referring to board members. It says here that members work above the recommended 10 days per month, as per the Scottish guidance, some claiming 20 days per month. That was going on for three years. You are personally responsible for ensuring that the recommendation that was set out by Audit Scotland was carried forward. Again today, what kind of assurances can we receive from you? You advise us that this will be carried through. This appears to me to be a very basic requirement of you to ensure that this guidance is updated, but members continue to claim 20 days per month? The procedures have been updated, convener, in relation to how members' expenses are claimed, and they are rigorously applied now. I am not asking about that, but you need to be fair to respond to the question that I have raised. The question that I have raised is that you are personally responsible for ensuring that this recommendation that was set out by Audit Scotland said that you should update the guidance so that members were clear what the requirements were placed on the board members. Some board members claimed 20 days when the guidance was 10 days. That sounds pretty basic to me, so why did you not ensure that it was implemented? That is a straightforward question. At that particular point in time, the issue over the member who claimed 20 days was at the discretion of the then-chair, Vic Emory, and that was for a specific piece of work that was associated with the Commonwealth Games. You were asked here, but the Auditor General set out that there is a requirement that was used. You said that you would update the policy, so did you not update it to ensure that it met the Scottish Government's guidelines? That was your responsibility, not the chair of the organisation. You are the accountable officer. The policy was not updated to the exact standards that it should have been, and I accept responsibility for that. What would the cost to the organisation have been? What is the cost per day of a board member's claim? The cost to the organisation would be £300 per day, so we are talking about 10 days, and it is £3,000 per month. Were members claiming above that amount by £3,000 because you did not have in place the recognised guidance? No, the guidelines were there and they were not being applied. Why did you not ensure that they were applied? You are the accountable officer, not the board chairman, not the finance director, not the chief constable. You are personally responsible for the change. You have just advised me on that from the very outset of our questions here. You have confirmed that you are the accountable officer, and you have been the accountable officer for ensuring that the very basic recommendations carried through. You take full responsibility for that, do you not? Yes, I do. Absolutely, convener. Do you think that you should be concerned that you have not met a very basic requirement of you considering the significant responsibilities that are placed on you? If you cannot get this very basic recommendation from Audit Scotland correct, what confidence can the Audit Committee have in you, given what is the annual expenditure of Police Scotland? It is £1 billion, convener. £1 billion? You are responsible for £1 billion. You have a very basic recommendation place before you hear of ensuring that the expenses of the board meet the Scottish Government's guidelines that have not been met. Do you think that we should have any confidence in you that you are spending £1 billion and you cannot get this very basic recommendation correct? Do you understand the position that has been presented to you? Yes, I do, convener. The answer is yes. I do believe that the committee should have confidence in me. As I said at the outset, we have had significant financial challenges to meet over the past three years. We have met those challenges in the first two years of the Police Authority and Police Scotland, and we are looking to meet those challenges as we move into this year. The point that you make is accepted that that policy should have been tightened up. You said that it was not, and I take responsibility for that. Can we just go back here? You said that one board member—I used to say that we found that many board members worked above the recommended 10 days per month. How many board members worked above the recommended amount? I do not have that information to hand, convener, but I am perfectly willing to provide that. Was there a review not carried out that perhaps the fund should be recovered, given that it was above the Scottish Government guidelines, Mr Johnson? As Mr Foley has said, the process involved the chair approving the claims made by Police Authority board members. Do you find that accepted? Sorry, the process itself has been followed in that the chair had discretion as to whether or not to approve those claims. There has been no suggestion made to me that any members were claiming for work that they had not done. I want to make a distinction between two things. One is whether the board members were putting in legitimate claims for work that they had done in furtherance of their responsibilities. The answer to that is yes. The second is whether the Government was satisfied with the overall level of claims that were being made. The answer to that is that no, we were not. The claims were paid on the basis that they related to work that had been incurred and approved by the chair. That was the chair's responsibility to either approve or decline payment. However, in relation to the overall issue of the number of days worked by board members, that has been subject to a clear guidance from the Scottish Government, which has now brought down the number of days and has tightened the approval process. Why don't we go back to this again? Take it that the Scottish Government would have been aware of the recommendation and document from Audit Scotland, which was first highlighted in 2012-13. Is that correct? We recommended in 2012-13 that members' expenses policy procedures should be reviewed and updated. That is correct, is it not? The Scottish Government would have been made aware of that. Would you not have expected the Scottish Government to say, we are not allowing those payments to be taken forward because it is in our guidelines that it should be a maximum of 10 days per month? What role did the Scottish Government's civil servants play in ensuring that that was carried out properly? The Government's civil servants have been working closely with the police authority throughout this period on the issue of members' expenses. I would want to highlight that it was a recommended 10 days per month limit. At points, the case has been made around the very heavy workload and the onerous responsibilities that police authority members have, particularly in that transitional period following reform, where there was a heightened number of meetings and amount of work that were expected to be made. We accepted that there were cases where the number of days would be more than the normal threshold. That has been the subject of on-going work, and now it has been subject to a new instruction from ministers around the maximum numbers and the process for making claims. Furthermore, there is no evidence that those individuals charged with approving the claims check them for the consistency and provide corrective pre-vac where necessary. I wonder what kind of interrogations have been carried out by the Scottish Government, Mr Johnson, to make sure that significant public funds that have been paid to ensure that those organisations are managed properly have been carried out? I can certainly give an assurance that officials within the directorate have been looking at claims, have been playing a scrutiny and challenge role with the police authority and that that has led to new processes. If we are just asking the conclusion that perhaps the committee could be provided with the necessary information concerning the number of claims that were made and the claims of which those individuals who received them as well. Given the significant public funds that they would have expected around those figures, would they have been expended in providing that information to the committee and for the public record? Yes, we can certainly take that away and provide the information that the committee... Pardon? Is the information in the public domain at the moment? I am not immediately sure how much of it is in the public domain, but we can certainly provide the committee with the information that you are seeking. That is the final question from David Torrance. Thank you, Gwynard. Can I ask about the Scottish Police authorities? That liability of £26.7 million, and can I ask a panel and the new chief constable in the previous experience, does any other police authorities in the UK pay that? No, they don't. Thank you. It's my time this morning and I've now moved to the next item. Can I just do it for a brief suspension before we move to the next item? I want to do that on the record. I have a further response from the Scottish Government to the committee report entitled The report on Scotland's Colleges 2015. Members will be wished to be aware that the AGS report on Scotland's Colleges 2016 will be published this summer. Are members content to note that response or do they have any comments? Mary Scanlon? I think that it's probably my fault that I didn't make myself clear at the time, but I find it rather than getting a snapshot of figures for one year for student support, I would actually find it more helpful if you don't mind to ask for the trends of those figures, because I'd like to hear so much that the figures are going up or going down. It would be helpful for this committee if we could get bursary childcare and discretionary payments over the past five years. If the committee is going to ask for further figures, it would be helpful to ask for details of the in-year payments and the top-ups to the budget. There are students that come to the end of the financial year that the budget spent, but they are not sure if they are going to get the bursary for the past few months of the college term. It would be worthwhile to ask the Government why it is that, year after year after year, they make up the top-up payments rather than giving clarity to the students at the start of the term. Bearing in mind also the time that we have left in this session, I would recommend that we put this on to the legacy paper for the next committee so that they could pick this up after the election. In other questions and points, we can take on both the requests that have been made and the clerks will prepare our addition to the legacy paper to ensure that it is in place. We will write to the Scottish Funding Council requesting further information, both Mary Scanlon and Mark Griffin referred to. We can now move to agenda item number five, which is settlement agreements. It is a report from the Scottish Government following a year of operation of the new arrangements. We are invited to agree to highlight or work in this area in the legacy paper and agree that the Scottish Government should continue to report annually with future reports addressed to Parliament and lodged with SPICE. Do members have any comments? Your colleagues, Ken Macintosh, who was quite vociferous in his calls for more openness, and I think that to be fair, convener, we are getting more openness, but I would certainly welcome although it will not be here future reports to be addressed to the Parliament and to SPICE. Colleagues, as previously agreed, we now move to the next agenda item, which we agreed previously to hold in private.


I'm thinking about you, thinking about you Because of some delay, but we are here now Why are you doing this? Just in case, because there are a lot of people Just in case, because there are a lot of people I know Sea! It tastes like an egg It's delicious It tastes the same as the one in Washington, New York I was so tired But it's time to check out Because I'm actually heading to Iguazu Falls Today we're shooting something around 6 Because we have to connect with Korea And they're exactly 12 hours away So it'll be 6pm in Korea And then we're gonna head to the airport Where we'll fly to Brazil So we're gonna be able to visit two countries on this trip Even if it's just for a day I heard in Argentina, they start having dinner at 8pm 8pm? That's like 2 hours before I wanna sleep Okay, I packed way too lightly I underestimated how cold it was going to be So I was suffering yesterday, but I also wore the warmest outfit that I had yesterday So I'm kind of screwed Yeah, but I'm excited for Iguazu Falls It's one of the world's three most magnificent waterfalls I don't know if they exactly call that, but top three waterfalls I've been to Niagara Falls Done getting ready So they said, prepare to get soaking wet when we go to the waterfall So I put on this kind of water resistant dress on Let's start heading downstairs That is with dulce de leche Oh, this is dulce de leche? Yes, and this is dulce de leche That's good Alright We're on our way to eat Chinese food for dinner Because we all wanted something warm and soupy So here we are at the Oriental Falls I hope it's good I guess I wanted to introduce them, but they're too shy They said not today Tomorrow when they look prettier Day 2 in Brazil Day 3 in South America It is 7.30 right now Stairs to have breakfast He always collects magnets when he goes to different countries So he's super excited 254 layers So like 67,000 Korean won I mean, the quality is amazing And I look cool Now we're at the Argentina side of the Ifasso Falls The air is so fresh and clean here We're walking the lower trail Cirque Cuito Inferio I feel like I'm parking on a mission right now I'm this close to the waterfall right now It's insane Right here is the end of the waterfall Is where the waterfall goes down And I'm this close to it It is surreal It literally does not feel real But it is, because it's also very scary Barely four decades ago The waters of this river ran clear Since then with forest to clear And since most of the watersheds Each time that it rains Water washes away the unprotected soil Which turns the river red Across this again And it's shaky Hola Paula Hola Hi everyone Hello to me Paula Also, she gave us churros Churros con churros Con dulce de leche I like you when you say churros Yeah I'm eating churros with Ashley We're gonna be your pet Que rico Muchas gracias por tu hospitalidad Hasta mañana Tú también Ok ok Best boyfriend So we finished shooting For today We went to Paula's house And then we went to Universidad de Salvador To interview Social science professor On the Hallyu wave I'm hungry Hello I think it's gonna be good Thank you for your hard work Thank you Have a good day Thank you Is this it? Yes For the moment Please give us a bite Thank you Thank you Thank you Thank you It's really good It's my first time And now I can't take it out I can't take it out I can't take it out I can't take it out I have a hard time taking it out I'm so tired It's really good It's been a few years It's been a few years So it's been a while If you bake it Please give us a bit of salt Yes I can eat it It's really soft Let's take a photo The second to last day Of my trip in Bar Buenos Aires And I woke up kind of early today So I'm going to the gym Also, all the elevators in Buenos Aires Start with Zero floor It's 8.24 right now So I'm gonna head downstairs for breakfast I have no idea if you're supposed to eat it like this The white thing is like Milk jam? I don't know It's not sweet Or sour Or salty Everyone was grabbing this So I decided to try it myself too It looks like yanggeng It tastes just like yanggeng I don't like chestnut flavor I'm here at the dance practice hall Where Baola is practicing with her group members Her group is called Explode And they do K-pop dance covers But they also sing They also make covers in Spanish So they're practicing to bad girl right now And only Paola knows that I'm coming But I'm going to surprise her Three other members In Spanish Obviously I'm not going to be able to film My interaction with them too much Or the surprise But no marshmallow in the middle It's the caramel in the middle It's very sweet It's so good It's so good Let's take Milanesa You have to pay for it Time for Gelato Dessert I'm from Maraguay Thank you I don't like it It's red tea But I have to wake up It's my last night here in Argentina I'm so tired But I also don't want to go to sleep Because it means that my trip is coming to an end I wish I could stay a bit longer I did come here on a work trip So I knew that I wasn't going to be able to explore too much But now that I'm here And I saw how beautiful this city is I just want to stay three more days So I can explore It just means that I have to come back But today at the event I met so many K-pop fans And Argentinians who love Korean culture They're just so grateful That they have so much interest in Korea And felt very humbled as well I have one more day tomorrow I have one more day tomorrow And I'll be meeting more K-pop fans I'm super stoked about that Alright, I'm gonna knock out I'll see you guys tomorrow Good night So sunny and nice today I have on the outfit that I wore two days ago Because we got to shoot like a continuation We're done with filming Our last meal in Buenos Aires Is pizza This place is called Pizzeria Guerrilla It's so long There's even a flower? Wait wait wait Wait wait I'll show you guys Thank you Eduardo Thank you See you later