The Scottish Government needs to be more transparent about the annual reporting of its accounts, including loans to private companies, says the Auditor General.
The 2017/18 consolidated accounts - which received an unqualified audit opinion - show that the overall budget was underspent by £339m, compared to £85m in 2016/17.
The resource budget was underspent by £287m and capital by £52 million, with the main underspends coming in the Education and Skills portfolio (£115m) and Rural Economy and Connectivity portfolio (£74m).
Caroline Gardner's report also notes the progress the government has made in improving its financial reporting by publishing its first medium-term financial strategy and Fiscal Framework Outturn Report.
But she says more improvements are needed to aid transparency.
A consolidated account covering the whole public sector needs to be published to support Parliamentary scrutiny and enable better decision making. The account should include key assets and liabilities such as capital borrowing and pensions.
Ms Gardner says the government also needs to develop a framework that clearly outlines its role in intervening financially in private companies.
During 2017/18, the Scottish Government provided loan facilities to two private companies - Ferguson Marine Engineering Ltd and Bi-Fab - to support their delivery of current contracts and future business prospects.
But the Auditor General says there is limited public information about the extent of the financial support to the firms. Her report also calls for:
- A more robust and transparent process for funding public bodies, including allocations to NHS boards and local authorities
- The performance report within the government's accounts to better link spending with outcomes
- Finalised policies for managing borrowing powers to improve capital budget management, avoid excess borrowing and limit interest costs.
Ms Gardner said:
"The Scottish Government has taken some important steps to improving its financial reporting, but there are a number of areas it can improve on to help support the Parliament and public in their scrutiny of public finances.
"It should aim to publish a consolidated account for the whole public sector before the end of 2018.
"And it also needs to be more transparent about its overall approach to providing loans to private companies and develop a clear framework to guide its decision-making around how it invests public money."