Document 1 (2013-2014) The Office of the Auditor General’s report on the annual financial audit and control for the budget year 2012 was presented to the Storting on 5 November 2013.
Of 217 audited agencies, eight have received remarks concerning significant mistakes in their accounts, and 28 have received significant remarks concerning specific dispositions.
- The general impression is still good, but this year, too, the audit has uncovered serious weaknesses in agencies that handle key tasks in our society and services of great importance to the users. Some agencies have now received remarks several years in a row, and in spite of the work that has been done to improve matters, there are still major weaknesses needing to be addressed, says Kosmo.
The OAG underlines that it is the ministries’ duty to follow up the agencies that report to them, and it has critical remarks to 14 out of 17 ministries concerning budget implementation and management of agencies.
- Several ministries have failed to make sure that previously uncovered deficiencies and weaknesses have been properly addressed. Although important functions in society have been delegated to subordinate agencies, the ministries still have overall responsibility, Kosmo emphasises.
- The state administration has a complex structure, and it is understandable that ministries and agencies concentrate on their core areas. However, this also creates a risk that issues in the borderland between sectors and disciplines are given a lower priority and achieve less, says Kosmo.
The 2012 audit shows, for example, that the division of responsibilities between the Ministry of Education and Research and the Ministry of Children, Equality and Social Inclusion is carried out in such a way that children in child welfare institutions have not received the education they are entitled to.
Another example is Norway’s International Climate and Forest Initiative, where a vague division of responsibilities within the Ministry of Foreign Affairs and between it and the Ministry of the Environment has contributed to important weaknesses in management and reporting.
A third example is the follow-up of the Altinn web solution, where significant challenges have been identified. These challenges concern the mandates of several ministries whose participation is required when decisions are made. A lack of coordination from the Ministry of Trade and Industry has also been identified.
- In spite of the efforts to increase information sharing in public administration, there is still too little communication between certain fields. This can prevent efficient use of the available information, and it can also lead to different treatment of information that affects citizens, Kosmo says.
Fragmented and short-term use of measures
A fragmented range of instruments and many ad hoc measures – new instruments and measures constantly being launched in response to new challenges or weaknesses, may be an obstruction to overall, long-term management, the OAG points out. One example is the complicated range of measures aimed to provide people with jobs. The OAG notes the many and different labour market measures that to some extent have overlapping purposes and target groups. It also states that the measures structure is confusing and makes it difficult both for users and for the local NAV office to gain an overview over the instruments and be able to use them.
Another example is the measures that have reduced the processing time for cases in the Norwegian System of Compensation to Patients, while the appeal cases pile up in the Patients’ Injury Compensation Board.
- The use of instruments should be aimed more towards overall, long-term solutions in order to ensure better use of resources, increased impact from the measures and thus higher goal achievement, says Kosmo.
Weaknesses in the implementation and follow-up of major projects and ICT projects
This year again, the OAG reports challenges and deficiencies in the implementation and follow-up of major projects. Most of them have received remarks in previous years, too:
- Road projects in the Public Road Administration, with considerable cost overruns and delays, as well as deficient documentation on planning and implementation
- Inadequate follow-up of deficiencies in information security in the police service
- Weaknesses in implementation of UTSYS, the joint registration and case processing system for use by the police in immigration administration
- The follow-up of Altinn, test regime weaknesses that impact on operation security and robustness, and on implementing services in more sectors
- The Armed Forces’ LOS program (a new joint management system for finance, personnel and logistics), which will be considerably delayed, have a much smaller scope or be significantly more expensive than planned; complete central material accounts have still not been established.
- This is about inadequate ability to implement and coordinate projects in major agencies with considerable expertise and resources. There is a risk that our goals in key social sectors will not be reached as intended, Kosmo states.
Difference in treatment
In some large agencies that have many levels and units divided up according to geography or discipline, it is a challenge to ensure that regulations are practised the same all over the country and across disciplines. This year’s audit has shown that this challenge has led to citizens receiving different treatment.
One example of this is that there are major differences between the units in the Directorate for Children, Youth and Family Affairs, as to how much they emphasise school as a socialisation and integration arena for children in child welfare institutions.
Another is the great variation between tax regions in whether they report it to the police when businesses and companies fail to submit a tax return.
- Practice might differ because local cultures and attitudes have developed. This might be self-reinforcing, and it needs to be prevented with clear internal guidelines for use of discretion and good internal control, Kosmo points out.
Challenges related to internationalisation
A world that is more closely interwoven, with greater movement of people, work and capital across national borders, is also of increasing importance to Norway’s public administration. The OAG is seriously concerned that considerable deficiencies and weaknesses have been uncovered in several areas.
The Population Register has significant deficiencies related to the D-number population (people without permanent residency in Norway). Information in the Population Register is used to determine each person’s rights and duties, such as tax and social security benefits, and it is therefore important that this register contains correct and updated information.
More movement across national borders also increases our export of social security benefits and the number of cases where foreigners earn social security rights in Norway. This year’s audit shows that NAV still has considerable weaknesses in its management of foreign cases.
The OAG also notes that information exchange agreements with tax havens are so far being used to a limited extent and with limited effect. There is also inadequate follow-up of automated control statements from foreign tax authorities concerning assets and income for people resident in Norway. The consequence is that those who have assets or income abroad, feel there is little risk of being found out.
- It must become a high priority to improve our follow-up of the increasing movement of people, work and capital across national borders, Kosmo argues.
Deficiencies in the prevention and uncovering of malpractice
In connection with the financial audit for 2012, the OAG has also surveyed the government administration’s work in preventing and uncovering malpractice. The auditors checked whether an assessment of the risk of malpractice had been carried out, whether information on ethical guidelines had been given, whether internal whistle-blowing routines and routines to ensure impartiality had been established, and whether the OAG had been informed of any internal malpractice.
The OAG considers it unfortunate that most of the ministries have not carried out a specific assessment of malpractice risk. However, it is good that a large proportion of the agencies have done so. The survey also shows that 22 per cent of the ministries and 59 per cent of the agencies have no routines for how to inform new employees of the impartiality requirements in the Public Administration Act, and that 50 per cent of the ministries and 58 per cent of the agencies have no routines for how to inform employees and contracted consultants about the impartiality requirements.
- The ministries must conduct a specific assessment of the malpractice risk and make sure the impartiality requirements in the Public Administration Act are made known and complied with, says Kosmo.
The OAG reporting in Document 1 has been changed from 2012 onwards, and will now primarily deal with remarks about the ministries’ management and the OAG’s recommended measures. The document also contains a report presenting the main findings from the audit, general remarks that have a major financial scope or are of interest to the public, and the OAG’s paramount recommendations.
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The deferral of public access to documents prepared by or for the Office of the Auditor General in connection with Document 1 (2013-2014), cf. the Act relating to the Office of the Auditor General section 18 second paragraph, is hereby set aside.