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While all colleagues have responsibilities for preventing, detecting and reporting fraud, we recognise that the primary responsibility for designing, operating and reviewing appropriate internal controls to prevent and detect fraud rests with management. Management confirms the effectiveness of these controls through the internal control checklists completed as part of the annual Certificate of Assurance process. This system of internal control is reviewed on an ongoing basis by the Internal Audit Partnership team and by our external auditors, Audit Scotland. The Internal Audit Partnership team gives due regard to the possibility of fraud and other irregularities when undertaking internal audit reviews as part of the Scottish Enterprise Internal Audit Plan and seeks to identify any control weaknesses that could facilitate fraud or irregularities.
Scottish Enterprise continues to participate in the biennial National Fraud Initiative (NFI). Led by Audit Scotland, this counter-fraud exercise collects and matches data between participating public bodies to identify possible fraudulent transactions. There were no material issues arising from the 2024–25 NFI exercise for Scottish Enterprise.
During 2025–26, we made improvements in our counter-fraud maturity. We developed an organisation-wide fraud risk assessment to understand our specific vulnerabilities to fraud. We also refreshed our induction training materials and updated our Counter Fraud Policy and Speak Up (Whistleblowing) Policy to ensure they are aligned with current best practice.
In line with Scottish Government guidance to public bodies, Scottish Enterprise is committed to human rights and requires human rights checks to be carried out before entering into business relationships for Scottish Enterprise funding. Scottish Enterprise reviewed its due diligence processes in 2025/26, which included the development of revised procedures. The review identified areas for enhancement, reflecting the increasingly complex geopolitical landscape in which Scottish Enterprise operates. Changes include an enhanced online screening and the introduction of targeted checks requiring a customer statement specifically addressing items and activities governed by the UK Strategic Exports Regime.
Following the First Minister's Parliamentary statement in September 2025, Scottish Enterprise paused the payment of new grants to, or investment in companies involved in the design, production, supply, and support of military equipment, technologies, and services whose products or services are provided to specific identified countries, where there is plausible evidence of genocide being committed by that country.