Internal Audit contract information: FOI release

Information requested

Information in relation to your Internal Audit contract:

1. Who is your current internal audit provider?

2. When did the internal audit contract commence?

3. When does/did the initial period of the contract end?

4. Is there an extension period for the contract and if so, when does this end?

5. Please provide a copy of the internal audit contract (redacted if required)?

6. What is the annual fee for the internal audit contract exclusive of VAT? How much have you been invoiced for the 2025-26 financial year exclusive of VAT?

7. What is the day rate for the internal audit contract exclusive of VAT?

8. When will the contract be issued into open public procurement?

9. Please provide a copy of the contractual KPIs in place for the contract?

Response

The internal audit services for the Scottish Government is provided by an in-house internal audit team in the Directorate for Internal Audit and Assurance (DIAA). The team also provides an internal audit shared service to 26 public bodies. You can find out more about the Directorate here: Internal Audit and Assurance Directorate - gov.scot

DIAA has a co-source partnership contract in place with a private firm. The information in the response below relates to our use of that contract. You can find further information here on Public Contracts Scotland View Notice - Public Contracts Scotland.

While our aim is to provide information whenever possible, in this instance we are unable to provide some of the information you have requested because exemptions apply. The reasons why that exemptions applied are explained below in response to each question you have asked as appropriate.

1. Who is your current internal audit provider?
The Internal Audit provider is an in house team supported by a co-source partner. EY are currently appointed in this capacity.

2. When did the internal audit contract commence?
The contract was let on 01/09/2024.

3. When does/did the initial period of the contract end?
The initial contract ends 31/08/2027.

4. Is there an extension period for the contract and if so, when does this end?
There is an option to extend for a further 12 months up to 31/08/2028.

5. Please provide a copy of the internal audit contract (redacted if required)?
A copy of the contract has been attached with information redacted, the relevant exemption has been noted on the document. The following exemptions have been applied:

Where applicable, an exemption under Section 38(1)(b)(personal information) of FOISA applies to some of the information you have requested because it is the personal data of a third party. While our aim is to provide information whenever possible, in this instance a small amount of information, i.e. names of junior Scottish Government officials and employees of other organisations, have been redacted from the report. This exemption applies because disclosing it would contravene the data protection principles in Article 5(1) of the General Data Protection Regulation and section 34(1) of the Data Protection Act 2018. This exemption is not subject to the ‘public interest test’, so we are not required to consider if the public interest in disclosing the information outweighs the public interest in applying the exemption. Accordingly, some information within the attached documents has been redacted.

Where applicable, an exemption under section 33(1)(b) disclosure would (or would be likely to) prejudice substantially the commercial interests of any person or organisation. This has been applied due to the contract containing things such as pricing structure, service scope and methodology, staffing levels, resourcing models and contractual terms negotiated between parties. Competitors could see how the current supplier prices and delivers services, then undercut them in future bids. This weakens the supplier in the market and also weakens the authority’s position in future procurements.

This exemption is subject to the 'public interest test'. Therefore, taking account of all the circumstances of this case, we have considered if the public interest in disclosing the information outweighs the public interest in applying the exemption. We have found that, on balance, the public interest lies in favour of upholding the exemption. We recognise that there is some public interest in release because transparency about spending public money is important. However, this is outweighed by the public interest in full disclosure which could damage competition by directly revealing how a supplier competes and future value for money as this information could be used by competitors in future negotiations to their detriment.

6. What is the annual fee for the internal audit contract exclusive of VAT? How much have you been invoiced for the 2025-26 financial year exclusive of VAT?
There is no annual fee for the in house service. The use of the co-source requires charges to be incurred as services are required. Invoiced costs for 2025-26 totalled £754,117.23 (ex VAT).

7. What is the day rate for the internal audit contract exclusive of VAT?
Not released under section 33(1)(b) disclosure would (or would be likely to) prejudice substantially the commercial interests of any person or organisation.

This has been applied as the specific day rates contained in the contract are commercially sensitive and release would reveals the current supplier’s pricing model. This could allow any competitors to undercut costs and undermines future negotiations. Pricing is explicitly recognised as commercially sensitive because it affects competitiveness

This exemption is subject to the 'public interest test'. Therefore, taking account of all the circumstances of this case, we have considered if the public interest in disclosing the information outweighs the public interest in applying the exemption. We have found that, on balance, the public interest lies in favour of upholding the exemption. We recognise that there is some public interest in release because transparency about spending public money is important. However, this is outweighed by the public interest in full disclosure which could damage competition by directly revealing how a supplier competes and future value for money as this information could be used by competitors in future negotiations to their detriment.

8. When will the contract be issued into open public procurement?
I am unable to confirm at this time. Internal Audit will consider its future audit service support requirements ahead of the current contract coming to an end.

9. Please provide a copy of the contractual KPIs in place for the contract?
These are contained within a schedule 14 of the contract.

About FOI

The Scottish Government is committed to publishing all information released in response to Freedom of Information requests. View all FOI responses at https://www.gov.scot/foi-responses.

FOI 202600517755 - Information released - Contract

File type

PDF

File size

1.1 MB