Greater transparency and value for money is needed on Government loans to private companies, auditors have said following a review of accounts for the last year.
Audit Scotland also found the response to coronavirus has caused a £669 million overspend in the Scottish Government’s 2019/20 budget.
However, the Scottish budget has received an extra £8 billion in consequentials from Westminster as a result of Covid-19, most of which will fall in the 2020/21 financial year.
Audit Scotland said Government loans of £3.5 million to Prestwick Airport and £9 million to Burntisland Fabrications (BiFab) were subsequently valued at nil at the end of the 2020/19 financial year “to reflect the likelihood of repayment”.
The audit of the Government’s accounts said there should be a clear outline of ministers’ plans for future investment in private companies.
Stephen Boyle, auditor general for Scotland, said: “Covid-19 is understandably having a significant effect on the Scottish Government’s finances.
“It’s now more important than ever that the next financial strategy has clear links between spending plans and what that money is expected to achieve, as Scotland contends with the pandemic’s ongoing impact.
“The Scottish Government also needs to clearly outline its plans for future investment in private companies to increase transparency and value for money.”
Responding to the report, a Scottish Government spokeswoman said: “The overspend was due to the provision for vital business support grants we made available from April 2020 and Audit Scotland confirm in their report that we are not in breach of the Budget Act.
“Like other governments around the world, we have listened to businesses and tailored our support during this economic crisis to support jobs and the economy of Scotland.
“The Scottish Government is committed to sound and transparent management of the country’s finances to deliver the best outcomes for the people of Scotland and to stimulate a sustainable recovery from the coronavirus pandemic.
“The Scottish Public Finance Manual sets out the considerations and decision-making process undertaken by ministers when considering investing public funds in a business.
“The Scottish Government’s accounts are also laid before Parliament and published annually.”