Annex 2: memorandum to accountable officers for other public bodies (sponsored bodies)
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 Accountable Officers are personally answerable to the Scottish Parliament in accordance with section 15 of the PFA Act. In this Memorandum, reference to the Parliament and Ministers should be interpreted as the Scottish Parliament and the Scottish Ministers. References to the Board are to the statutory Board, or other ruling entity, of the body.
1.3 This Memorandum determines the responsibilities that are common to all Accountable Officers that I may designate under section 15(3) of the PFA Act.
2. General responsibilities of Accountable Officers
2.1 The essence of your role as Accountable Officer is, subject to section 5 below, a personal responsibility for the propriety and regularity of the public finances for the body for which you are answerable and ensuring that the resources of the body are used economically, efficiently and effectively (i.e. value for money and feasibility).
2.2 It is incumbent on you to combine your duties as an Accountable Officer with your duty to serve the body to whom you are responsible and from whom you derive your authority. The body is in turn responsible to the Parliament in respect of its actions and conduct.
2.3 You may be called to give evidence before the Public Audit Committee. You will be expected to deal with questions arising from the accounts of the body 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 the body has used its resources in discharging its functions (more commonly referred to as Performance reports). More detailed guidance is provided in paragraph 6 below and in the Scottish Public Finance Manual in the chapter relating to the Committee and the Auditor General.
2.4 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 special skills and services (scientific, economic, statistical, accountancy, inspection and review etc). You should ensure that the body’s staff are conscientious in their approach to costs, whether or not borne directly on the body’s budget.
3. Specific responsibilities of Accountable Officers
3.1 As Accountable Officer you must, in relation to the body for which you are designated:
3.1.1 ensure that appropriate financial systems are in place and applied and that procedures and controls are reviewed from time to time to ensure their continuing relevance and reliability, especially at times of major changes;
3.1.2 sign the annual accounts - and the associated governance statement - for the body, and in doing so accept personal responsibility for their proper presentation as prescribed in legislation and/or in the relevant Accounts Direction issued by the Scottish Ministers;
3.1.3 ensure that proper financial procedures are followed and that accounting records are maintained in the form prescribed for published accounts;
3.1.4 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;
3.1.5 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;
3.1.6 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 by undertaking an AO assessment, and where appropriate brought to the attention of the body;
3.1.7 ensure that delegation of responsibility is accompanied by clear lines of control and accountability together with reporting arrangements;
3.1.8 ensure that procurement activity is conducted in accordance with the requirements in the Procurement section of the Scottish Public Finance Manual;
3.1.9 ensure that effective management systems appropriate for the achievement of the body’s objectives, including financial monitoring and control systems, have been put in place;
3.1.10 ensure that risks, whether to achievement of business objectives, regularity, propriety, value for money and feasibility, are identified, that their significance is assessed and that systems appropriate to the risks are in place in all relevant areas to manage them;
3.1.11 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 objective
3.1.12 ensure that 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 and value for money;
3.1.13 ensure that 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.
4. Regularity and propriety
4.1 You must ensure that the body achieves high standards of regularity and propriety in the consumption of resources. Regularity involves compliance with relevant legislation, relevant guidance issued by the Scottish Ministers - in particular the Scottish Public Finance Manual - and the framework document defining the key roles and responsibilities which underpin the relationship between the body and the Scottish Government. Propriety involves respecting the Parliament’s intentions and conventions and adhering to values and behaviours appropriate to the public sector as set out in the AO standards..
4.2 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.
5. Advice to the body
5.1 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 to ensure financial regularity and propriety and the economic, efficient, and effective use of resources (i.e. value for money and feasibility) you should set out in writing the objection to the proposal and the reasons for this objection. If the board 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 and feasibility, therefore the undertaking of an Accountable Officer Assessment is essential in ensuring that you have properly considered the Accountable Officer standards of regularity, propriety, value for money and feasibility. Guidance on this is available via either the SG intranet or the governance hub. In the case of a body sponsored by the Scottish Government the sponsor unit should be made aware of any such request in order that, where considered appropriate, it can inform the relevant Portfolio Accountable Officer and Cabinet Secretary / Minister.
5.2 Having received such an authority (following assessment by the board, you must comply with it. The PFA Act then requires copies of any written authorities to be sent to the Auditor General for Scotland and as per the SPFM copied to the Clerk of the Public Audit Committee, it should also be published on your organisation’s website as soon as possible no later than one month from issue and disclosed in your respective annual accounts for the relevant financial years.
5.3 If because of the extreme urgency of the situation there is no time to submit advice in writing to the body in either of the eventualities referred to in paragraph 5.2 before the body takes a decision, you must ensure that, if the body overrules the advice, both your advice and the body’s instructions are recorded in writing immediately afterwards in line with rules set on authorities sought in advance.
5.4 If you are also a member of the Management Board of the body, you should ensure that your responsibilities as Accountable Officer do not conflict with those as a Board member. For example, if the body proposes action which as Accountable Officer you could not endorse, and would therefore advise against, you should, as a Board member, vote against such action, or ensure that your opposition as a Board member as well as Accountable Officer is clearly recorded if no formal vote is taken. It will not be sufficient to protect your position as a Board member merely by abstaining from a decision which cannot be supported.
6. Appearance before the Public Audit Committee
6.1 Under section 23 of the PFA Act the Auditor General may initiate examinations into the economy, efficiency and effectiveness with which relevant bodies have used their resources in discharging their functions (also know as Performance reports). You may expect to be called upon to appear before the Public Audit Committee to give evidence on reports arising from any such examinations involving your body. 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.
6.2 You will be expected to furnish the Committee with explanations of any indications of weakness in the matters covered by paragraphs 3 above, to which their attention has been drawn by the Auditor General or about which they may wish to question you.
6.3 In practice, you will have delegated authority widely, but cannot on that account deny responsibility. Nor, by convention, should you decline to answer questions where the events took place before your designation.
6.4 You must make sure that any written evidence or evidence given when called as a witness before the Public Audit 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.
6.5 In a case where you were overruled by the body on a matter of propriety or regularity, your advice would be disclosed to the Committee. In a case where you were overruled by the body on the economic, efficient and effective use of resources (i.e. value for money and feasibility) you should be ready to discuss the costs, benefits and risks of options considered and explain the reasoning for the decision taken. You may also be called upon to satisfy the Committee that all relevant financial considerations were brought to the body’s attention before the decision was taken.
7. Absence of Accountable Officer
7.1 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 in the body who can act on your behalf if required, they do not require separate designation as an AO to undertake this temporary role however unless you plan an absence of more than four weeks.
7.2 If it becomes clear to the body that you are so incapacitated that you will not be able to discharge these responsibilities over a period of four weeks or more, I (the Principal AO) should be notified via the SG Governance and Accountability Branch as soon as possible so that I can appoint a substitute Accountable Officer, pending your return, the relevant Portfolio Accountable Officer will also be informed. The same applies if, exceptionally, you plan an absence of more than four weeks during which you cannot be contacted.
7.3 Where you are unable by reason of incapacity or absence to sign the accounts in time for them to be submitted to the Auditor General the body may submit unsigned copies pending your return.
Page updated: February 2025