Auditor General warns of £84.6M policing funding gap by 2018/19
Policing in Scotland could face a funding gap of almost £85 million by 2018/19, according to the Auditor General.
The warning came in the annual audit of the Scottish Police Authority's (SPA's) accounts for 2014/15.
The Audit Scotland report also says incomplete records and poor financial management delayed the audit of the SPA's accounts while "substantial corrections'' were needed before completion.
The body, set up to hold Police Scotland to account, oversaw expenditure of about £1.76 billion in 2014/15 while, together with the police force, is also responsible for fixed assets valued at more than £550 million.
The SPA is forecasting an overspend for 2015/16 of £22.3 million.
In the absence of a long-term strategy to demonstrate the financial sustainability of policing for the next decade, Audit Scotland has estimated the potential funding gap to 2020/21 using current information.
Based on a 1% real-terms budget increase every year from 2016/17 to 2020/21, it has estimated a cumulative funding gap of £84.6 million by 2018/19.
Caroline Gardner, Auditor General for Scotland, said: "Police Scotland is one of our largest and most important public bodies.
"I first reported on the need for a long-term financial strategy for the service in November 2013. What was once important has now become critical, given the scale of the challenges ahead.
"The Scottish Police Authority and Police Scotland must collectively provide stronger leadership in strategic and operational financial management.
"This is essential if they are to deliver effective modern policing for the public and ensure their long-term financial sustainability.''
It is the second consecutive year that "significant issues'' have arisen from the annual audit of the SPA, with the Auditor General modifying her opinion on its accounts for the second year in a row.
The report describes the 2014/15 audit as "challenging''.
Although the unaudited accounts were received on time, these were "incomplete, of poor quality and were subject to substantial changes'', therefore by the end of the audit the majority of numbers in the primary financial statements had changed.
"This is exceptional in our wider experience of auditing public sector accounts,'' the report states.
Audit Scotland found aspects of the accounting records and access to information and explanations in the area of property, plant and equipment were of "poor quality'' while it was not clear what £21 million of the £67.5 million police reform budget for 2014/15 had been spent on.
A previous report by the Auditor General recommended that, by the end of March 2014, the SPA and Police Scotland develop a long-term financial strategy.
The latest report notes the SPA still does not have a long-term strategy in place and progress towards developing one has been slow.
The SPA intends to approve a financial strategy covering the period to 2025/26 by the end of March 2016.
The Auditor General will report again on its progress in 2016.