Diolch, Dirprwy Lywydd. Thank you for the opportunity to speak today about the Public Accounts Committee inquiry arising from the Natural Resources Wales annual report and accounts 2015-16.

As Members will be aware, the Public Accounts Committee has a crucial role in ensuring the efficient expenditure of public money. As part of this role we routinely scrutinise the annual reports and accounts of publicly funded organisations, as well as considering issues of value for money, and organisations’ governance and audit arrangements. We had been due to consider Natural Resources Wales’s annual report and accounts for 2015-16 in autumn 2016. However, our consideration was delayed until the Auditor General for Wales was in a position to qualify the regularity opinion of the accounts, which occurred in March 2017.

The auditor general qualified his regularity opinion on Natural Resources Wales’s financial statements in respect of its award of timber sales contracts to a sawmill operator in May 2014. Qualification of this nature is an unusual and rare occurrence, and a matter we believe should be brought to the attention of this Assembly. We found the auditor general’s findings to be most concerning in that he deemed NRW’s transactions relating to a timber sales contract to be irregular and, in his view, contentious and repercussive. Of further concern to us was that the auditor general found there to be uncertainty on whether NRW had complied with principles of public law and state-aid rules.