Call for extra scrutiny of 'increasingly complex' Scots budget
Scotland's auditor general has called for extra work to strengthen the transparency of public finances in light of Holyrood's new fiscal powers.
In her annual audit of Scotland's accounts, Caroline Gardner praised progress made by the government but identified areas for extra improvement.
With budgets "increasingly complex", Ms Gardner said transparency and scrutiny had "never been more important".
The Scottish government said the report showed it was managing resources well.
It has also established a "fundamental" review of the budget process to take account of Holyrood's new powers.
Having studied the government's balance sheets, Ms Gardner said she was "content they show a true and fair picture, follow accounting standards and that the income and expenditure for the year is lawful".
But she said management of the budget process was "becoming increasingly complex".
While the Scottish government has "established a strong base" to address the "substantial changes and uncertainty affecting public finances", Ms Gardner said there was "much still to do to ensure that the Scottish Parliament, and the public, have the information they need to fully understand and scrutinise the implementation of the new powers".
Ms Gardner also raised concerns about the CAP Futures programme, the IT system the Scottish government has been putting in place to administer payments to farmers from the Common Agricultural Policy.
The system, which has been beset with problems and over-run its budget by 74%, is not expected to "achieve value for money".
And Ms Gardner warned that a loan programme set up by the government as a stop-gap measure had "introduced risk" to the budget, including a risk of duplicate or over-payments and potential delays to other spending if the loans are not repaid on time.
The chief auditor also warned that Scotland looks set to lose out on £14m of European grant funding due to suspended support schemes.
The funds were suspended in 2015 due to a failure to adhere to European audit rules, and while the Scottish government worked to have the suspensions lifted, Ms Gardner said some deadlines had passed meaning £14m now could not be recovered.
The Scottish government's total expenditure budget for the 2015/16 financial year was £37.4bn.
The final accounts showed an underspend of £357m (or 1.1%) in the resource budget, and £35m (1.8%) in the capital budget, with an overspend by the health department offset by underspends in education and social justice.
Finance Secretary Derek Mackay said the underspends enabled the government to carry forward resources to the following financial years.
He said: "Under the current devolution settlement, the Scottish government is not permitted to overspend its budget. As a consequence, we have consistently adopted a position of controlling public expenditure to ensure we live within the budget caps that apply, but remain able to carry forward some spending power resources for a future year.
"This is a common and prudent strategy that has proved to be the right one over a number of years.
"This is the eleventh consecutive year Audit Scotland has given the consolidated accounts a clean, unqualified audit and once again demonstrates our firm grip on Scotland's public finances."
Mr Mackay said the budget process needed to "evolve" in light of fresh fiscal devolution from Westminster to Holyrood, "to take account of the complexities and opportunities associated with the new powers".
He said: "I have agreed a fundamental review of the budgetary process to ensure we develop a process that balances the time required for proportionate and effective parliamentary scrutiny with the need to ensure the information is based on the most up-to-date forecasts."
Responding to concerns raised about the CAP Futures programme, a Scottish government spokesman said the loans given to farmers would be recovered as payments were made.
He added: "We have been working hard to bear down on costs and have delivered £2m million of savings since January by implementing a number of value for money initiatives, such as, reductions in overtime working and contractor rates."