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Insufficient information about pensions in accounts

​The Office of the Auditor General's supervision of the management of state companies for 2014 shows that many companies have major differences between the actual pension obligations and the liabilities that emerge from the companies' accounts. "Several companies and ministries do not have good enough information about how pensions affect the companies' finances," says Auditor General Per-Kristian Foss.

Published 11/17/2015 1:00 PM

Document 3:2 (2015–2016) The Office of the Auditor General’s supervision of the management of state-owned companies for 2014 was submitted to the Storting on 17 November 2015.

In its report, the Office of the Auditor General (OAG) also cites:

  • Only 6 of 19 health trusts have set information security requirements for medical equipment 
  • Current funding may have slowed the focus on outpatient (day) surgery
  • The use of private medical and psychological specialists is not consistently contributing to a more geographically equitable provision of outpatient specialist health services
  • NSB's alternative transport services are not sufficiently efficient
  • The Ministry of Agriculture and Food can improve its ownership
  • The Ministry of Culture makes little use of the opportunity corporate governance provides for adjusting the management according to the distinctive nature and risk of the companies

Major differences between the recognised and actual pension liabilities

There are major differences between the recognised and actual pension liabilities in many of the companies, particularly in the regional health authorities and cultural institutions. These differences are of great importance for the presentation of the companies' financial position. The actual pension liabilities and pension costs have a major impact on the capital structure and financial result of many companies.

"Good knowledge of how pensions affect the companies' financial position is important both for the companies themselves and owner ministries to follow up operations," says Auditor General Per-Kristian Foss.

Few information security requirements for medical equipment

Medical equipment can contain sensitive personal information. Few health trusts stipulate information security requirements for the equipment. The health trusts have a limited overview of the risks related to information security, and there are unclear lines of responsibility within and among the health trusts and the regional ICT entities.

"When only 6 of 19 health trusts make requirements of suppliers, it is important that the Ministry of Health and Care Services ensures that the health trusts comply with regulations concerning information security and treatment of health information. The regional health authorities must ensure better coordination, so that uniform requirements are made of suppliers," says Foss.

The health trusts' outpatient surgery activities have increased very little after performance-based funding was restructured in 2010

In 2010, performance-based funding was restructured so that the health trusts receive less money to perform surgery on patients on an outpatient basis than if the patient is treated on an inpatient basis. After the restructuring, outpatient surgery has increased very little, although 16 of 19 health trusts believe they have the ability to increase the share of day surgery. There are also substantial differences in the amount of outpatient surgery performed by the various health trusts. Several health trusts believe that the financial restructuring in 2010 has hampered efforts to increase day surgery. Both the health trusts and the Ministry believe that day surgery, when medically justifiable, can provide better quality patient care and be more cost effective.

"The Ministry of Health and Care Services should consider measures that increasingly encourage more outpatient surgery," says the Auditor General.

The regional health authorities do not utilise the private medical and psychological specialists service sufficiently to achieve equitable services

While access to contracted specialists is helping to reduce geographical differences, consumption of outpatient specialist health services is still higher in more populated rather than less populated municipalities. Within mental health services, access to contracted specialists is doing little to reduce geographical differences. In some regions, access appears to reinforce geographical differences. The supervision also shows that the regional health authorities follow up contracted specialists to varying degrees to ensure that they have sufficient activity and good quality health services.

"The regional health authorities should ensure that the contracted specialists' authorisations contribute to a more geographically equitable provision of services. We see that the new framework agreements which will take effect in 2016 may make it easier for the regional health authorities to follow up on our recommendations," says Per-Kristian Foss.

NSB's alternative transport services are not efficient enough for passengers

In most cases, alternative transport takes longer than ordinary scheduled train services. Passengers often do not receive sufficient information, either during planned or unplanned deviations. This includes information at the station area and the mobile application. Nor do passengers receive information about how much extra travel time the deviation will involve, despite the fact that NSB's empirical data should make it possible to estimate this.

"The Ministry of Transport and Communications should ensure that NSB, the Norwegian National Rail Administration and other transport operators strengthen coordination in the event of cancellations and major delays to ensure that passengers receive an efficient transport service," says Foss.

The Ministry of Agriculture and Food's ownership can be improved.

As an owner, the state should set clear expectations for the companies' results. The Ministry of Agriculture and Food has not set clear expectations for the business results of Statskog, Staur gård and Kimen Såvarelaboratoriet.

"More specific goals and indicators for this part of the companies' operations may contribute to more coherent governance," says Auditor General Foss.

The Ministry of Culture makes little use of the opportunity corporate governance provides for adjusting the management according to the distinctive nature and risk of the companies

In their production management, the performing arts companies have done little to define objectives and management parameters for cost effectiveness. Nor are financial analyses incorporated to any extent. While the companies' reporting to the Ministry of Culture is extensive, it does not provide a sufficient basis for assessing and following up whether the companies have cost-effective operations. The Ministry of Culture makes little use of the opportunity corporate governance provides for adjusting the management according to the distinctive nature and risk of the companies. The Ministry of Culture should continue to develop its corporate governance of performing arts companies. Several of this year's checks show that it is important to balance the requirements for efficiency with the societal considerations of the individual company in a sound manner.

"Clearer and more specific goals and indicators can support a clearer division of responsibilities between owner and board, and help the owner to follow up companies in accordance with the arm's length principle," says the Auditor General.

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