Chris Brown of Scott-Moncrieff says the phase 1 report from internal auditors is due to be completed by 24 February which will look at what led to the problems causing the delay, specifically to do with the environmental matrix.

Tory MSP Bill Bowman asks how many of the people involved in the "human error" mentioned in the KPMG report are still working on the project.

We are not aware of any disciplinary action being taken, or indeed any grounds to take action, replies Ms Gardner.

Tory MSP Liam Kerr wants to know about the role of the Scottish Futures Trust in this project.

They developed the non-profit funding model, replies Ms Gardner, as well as guidance and support documentation for the bodies carrying out these big projects.

They are not responsible for the project, she adds.

Mr Kerr says in 2019 a certificate of practical completion was issued, but significant work was still needed. Why was the certificate issued, he asks.

It's an important question and not one we can answer, says Ms Gardner.

The new children's hospital in Edinburgh won't be fully operational for at least another year, Health Secretary Jeane Freeman revealed in September.

The Sick Kids facility was due to open in July 2019, but last-minute inspections found safety concerns over its ventilation systems.

Now a new report has found at least £16m worth of work is needed.

NHS Lothian is paying about £1.4m in monthly repayments to the private consortium which built the facility.

Read more.

Mr Sarwar says one of the concerns about the ventilation system is around how late it was discovered.

The auditor general says this is right at the heart of the circumstances she is pulling together.

It was a third party tester which found the issues she adds.

There is no evidence that a change to the environmental matrix between 2012 and 2015 was escalated to the board, she tells the committee.

The contractor was asked to correct issues relating the frequency of air change as recommended by guidelines but they were unable to, hence the dispute she states.

Labour MSP Anas Sarwar asks about the level of government oversight, and about learning lessons from QEUH.

Leigh Johnston from Audit Scotland says the government received minutes from meetings and there were lots of opportunities for discussions on risks.

Caroline Gardner says with hindsight it seems an obvious opportunity to have learned from the QEUH construction, but looking at the dates it was less obvious at the time.

Mr Sarwar asks if government oversight was adequate and Ms Gardner says there is a lot of engagement.

It is not clear enough what the roles and responsibilities of each party are, she says.

The man in charge of NHS Lothian said he was left "dumbfounded" at the missed opportunities to spot the problems in Edinburgh's new children's hospital.

Tim Davison said the last-minute delay to the opening of the new Sick Kids site came as a "huge shock" and said he considered quitting.

But the NHS Lothian chief executive said a collective failure of "many senior and expert staff" was to blame.

It will be next autumn before the new facility will open.

Read more.

There is a contingency of £2m for further remedial action - is that enough, asks Mr Beattie.

There is no indication that it is not, replies Ms Gardner.

Will NHS Lothian have to cover future costs, he asks.

The Scottish government has indicated it will, replies the auditor general, saying the increased costs could be around £27m.

We don't yet know in enough detail what the differences were between NHS Lothian and the contractor, the auditor general tells the committee.

Mr Beattie asks why the contractual issues were "over and above" what is generally expected of such projects.

Ms Gardner says it is not clear why, and Chris Brown adds the health board is reviewing this issue now.

Is the contractor meeting any of the shortfall in funding to fix the issues, Mr Beattie asks.

The auditor general says this is not yet known, but the board has asked internal auditors to consider this and the public inquiry will also seek to better understand contractual implications.

It is a big question to which we don't yet have an answer, she adds.

But she does point out the QEUH is pursuing legal action over its construction and it was the same contractor used at the Edinburgh hospital.

The SNP's Colin Beattie starts the questioning, wanting more details on the contractual disputes.

Chris Brown from Scott-Moncrieff says there were issues around drainage and ventilation.

He says the contractor claimed to have built the hospital to the specifications and the health board paid £11m to the contractor after a legal challenge.

Were the specifications right or wrong, asks Mr Beattie.

It's very complex, says Mr Brown.

Caroline Gardner says in 2014 total costs were estimated at £230m for the hospital.

The opening of the hospital was delayed due to a serious of technical disputes, she explains, with additional payments agreed.

Ms Gardner highlights a certificate of completion was made in February 2019, but issues relating to construction were made clear in June.

These were a result of "confusion and human error" in interpreting guidance, she says.

The additional work to ensure compliance, plus the cost of keeping the current site open while this happens, is currently estimated to be £16m, the auditor general adds.

She says her report highlights the following issues in order to ensure they are not repeated elsewhere:

• clarity and application of guidelines and management of these
• contractual implications
• roles and accountability of those involved
• effectiveness of oversight and scrutiny

A spending watchdog has said the "checks and balances" failed on a project to build a children's hospital.

Edinburgh's new children's hospital did not open in July as planned after issues with the ventilation were uncovered.

A new Audit Scotland report said a string of questions about what went wrong remained unanswered.

The Scottish government has called a public inquiry to examine safety and wellbeing issues at the new facility.

Read more.

The committee is hearing from:

• Auditor General Caroline Gardner
• Leigh Johnston from Audit Scotland
• Chris Brown from Scott-Moncrieff

Convener Jenny Marra asks to what extent Mr Kenny was shocked or surprised by this audit.

Mr Kenny says he cannot think of a report which raised such serious issues in his time at Deloitte.

That ends this part of the committee.

Is the improvement plan adequate, asks Colin Beattie.

It is, replies Mr Kenny, but they will need external help.

The SNP MSP asks if anyone has stepped down or offered to step down as a result of the report.

There have been a few changes, but this could be down to natural turnover, and not related to the report, reply Ms Watt and Mr Kenny.

Is the board looking for more skilled members, says Mr Beattie.

The committee should follow this up, replies My Kenny

SNP MSP Alex Neil asks whether it is still the case that all board meetings are held in private.

Karlyn Watt confirms this, but adds meeting papers and minutes are now publicly available.

This is really unacceptable and should be changed immediately, replies Mr Neil.

Convener Jenny Marra asks if any explanation has been given as to why meetings are held in private.

Ms Watt says it seems to be a historical thing, while Mr Kenny says the board expressed surprise when this was raised as an issue.

Labour MSP Rhoda Grant wonders if there is training in place for board members.

She explains some people may be passionate about Gaelic and the aims of the organisation, but may not have experience of being on a board.

Michael Oliphant of Audit Scotland says the public bodies unit with the Scottish government provides training to board members across the public sector.

It is down to individuals themselves to make their training requirements known, he adds.

Conservative MSP Bill Bowman asks if the audit committee within the organisation is fit for purpose.

Many do not have finance skills, replies Mr Kenny, saying skill gaps need to be addressed.

Are they all local to Inverness, asks Mr Bowman.

Ms Watt says some travel in.

There's a policy for all employees of Bòrd na Gàidhlig to speak Gaelic. Is that legal, asks Mr Beattie.

We understand why that policy is in place, replies the auditor general, but we have not looked at the legality of it.

Tory MSP Liam Kerr wonders if this limits the talent pool.

Ms Gardner says it will tighten the pool from which staff can be recruited and it is about trade-offs.

Mr Kenny adds he has suggested that speaking Gaelic should only be a pre-requisite for certain roles.

Mr Beattie asks: are senior managers "enthusiastic amateurs" out of their depth or "just incompetent"?

I'm not sure there is a one word answer to that question, replies Ms Gardner.

She says there have be difficulties in recruiting to posts in the management team.

There are definite concerns about the skills of the management team, adds Mr Kenny.

He says there is scope for the board to hold management to account much more.

I've never seen a more damning report from you, SNP MSP Colin Beattie tells the auditor general.

Do public bodies generally get enough oversight, he adds.

Caroline Gardner says most public bodies do not come to the attention of MSPs because they are run well.

She says the Scottish government needs to make its sponsorship of bodies more consistent.