Chapter Five: Annual Accounts
Statement of System of Internal Financial Control
As Accountable Officer, I have responsibility for maintaining a sound system of internal control that supports the achievement of the organisation's policies, aims and objectives, set by Scottish Ministers, whilst safeguarding the public funds and assets for which I am personally responsible, in accordance with the responsibilities assigned to me.
The system of internal control is designed to manage rather than eliminate the risk of failure to achieve the organisation's policies, aims and objectives; it can therefore only provide reasonable and not absolute assurance of effectiveness.
The system of internal control is based on an ongoing process designed to identify the principal risks to the achievement of the organisation's policies, aims and objectives, to evaluate the nature and extent of those risks and to manage them efficiently, effectively and economically. This process has been in place for the year ended 31 March 2003 and up to the date of approval of the annual report and accounts and accords with guidance from Scottish Ministers.
As Accountable Officer, I also have responsibility for reviewing the effectiveness of the system of internal control:
- The original risk management policy has been revised to reflect the way in which risks can best be managed in the organisation and that has been adopted by the Management Board.
- Members of the Management Board have all been made responsible for identifying and managing risks that relate to their areas of control.
- The strategic risks have been reviewed by senior management in conjunction with revision of the Corporate Plan and feedback from the ongoing monitoring of corporate projects.
- Activity on corporate projects together with the risk relating to those projects are being reported to the Management Board on a regular basis.
- Operational risks have been identified and treatment plans prepared for the higher risks and these are now being reported to the Management Board on a regular basis.
- Business planning guidance for 2003-4 incorporated new guidance on risk management and this will be further revised in the next year's process; this will extend the process to individual courts and will lead to the development of their own risk registers and treatment plans. scottish court service: annual report and accounts 2002-2003
- Internal Audit is delivered by Scottish Government Audit Unit (SEAU) and Pricewaterhouse Coopers. They submit regular reports that include the Head of Internal Audit's independent opinion on the adequacy and effectiveness of the organisation's system of internal control together with recommendations for improvement. Audit work is directed at the key controls and programmes and will be further developed to focus on high risk areas as identified in the risk management process. Action plans to address identified weaknesses are prepared and agreed, with implementation monitored by the Audit Committee. Board members are appraised with the results of internal audit reports as they are published.
- The Audit Committee has representation of non-SCS members - internal and external auditors attend all meetings. It is also attended by an operational director who reports back to the rest of the operational directors as appropriate.
My review of the effectiveness of the system of internal control is informed by the work of the internal auditors and the executive managers within the organisation who have responsibility for the development and maintenance of the internal control framework, and comments made by the external auditors in their management letters and other reports.
John Ewing
Chief Executive
28 August 2003
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