Document 3:2 (2016–2017) The Office of the Auditor General’s audit of the management of state companies for 2015 was presented to the Storting on 8 November 2016. The report contains five investigations and six follow-up cases. Key findings in the five investigations:
- The local reporting culture in units and position groups within the health enterprises determines whether incidents are reported and followed up
- Monopoly company Sykehuspartner (Hospitalpartner) HF is not sufficiently transparent and does not adequately monitor the cost-effectiveness of the services provided by the health authorities
- The Ministry of Trade, Industry and Fisheries, the Ministry of Petroleum and Energy and the Ministry of Transport and Communications make use of the owner dialogue concerning corporate and social responsibility to challenge the companies to varying degrees
- Statnett (system operator in the Norwegian energy system) should be more transparent as regards the socio-economic aspects and costs of development projects
- The results posted by Posten’s (Nordic mail and logistics group) logistics operation have shown a weak trend.
Culture impacts on which incidents are reported
Good patient safety requires the health authorities to learn from incidents and actively prevent incidents from recurring in the future. A key element of this is to have internal non-conformity systems where health personnel can report incidents, including near-misses. The Office of the Auditor General’s investigation covered 19 health authorities, and shows that there is a need to improve the reporting culture.
“The culture and management within each department is of vital importance as regards which incidents are reported,” said Auditor General Per-Kristian Foss.
The audit indicates that a high user threshold in the electronic non-conformity system, time pressure and varying definitions of what constitutes an incident, represent barriers to a consistent reporting practice at hospitals.
“A narrow definition of what is deemed to constitute an incident imposes limitations on the employees, with the result that fewer incidents are reported,” said Foss.
The scope of reports is also influenced by whether managers and employees explain the incident through ‘human failure’ or ‘system failure’. Incidents are often explained through claims that individuals have made an error or omission, which can lead to a culture where employees consider the non-conformity system as an ‘informer system’.
There is insufficient transparency and control over the cost-effectiveness of ICT services provided by monopoly supplier Sykehuspartner HF
Sykehuspartner HF is an exclusive provider of ICT services to the South-Eastern Norway Regional Health Authority. The supplier operation is financed by service revenues where prices are determined without competition. The services that are provided must be cost-effective and of good quality. Sykehuspartner HF is not sufficiently transparent and does not adequately monitor the cost-effectiveness of services. The audit shows that Sykehuspartner does not have systematic information concerning the costs associated with the various services, and that the South-Eastern Norway Regional Health Authority does not adequately monitor the cost-effectiveness and quality of the ICT services provided by Sykehuspartner.
“A lack of transparency concerning costs make it difficult for the health enterprises to assess whether the services they receive are cost-effective,” claims Foss.
Variable owner monitoring of the companies’ corporate and social responsibility
The Office of the Auditor General has investigated how the Ministry of Trade, Industry and Fisheries, the Ministry of Petroleum and Energy and the Ministry of Transport and Communications monitor the work of the various companies relating to corporate and social responsibility through owner dialogue, as described in Report No. 27 to the Storting (2013– 2014). The audit indicates that the ministries are aware of the companies' work relating to corporate and social responsibility. The ministries largely base their monitoring of corporate and social responsibility as owners on the companies’ own risk assessments and reporting, and the dialogue with the companies has been closer since the ministries were made aware of incidents.
“The owner ministries should have more of an independent view of the risks that each company faces, and they should challenge the companies through owner dialogue to prevent and detect incidents at an earlier stage. In addition, more sharing of experience and dissemination of good practice between the ministries would help to improve owner monitoring of corporate and social responsibility,” said the Auditor General.
Statnett should be more transparent as regards the socio-economic aspects and costs of development projects
Statnett is currently investing more than ever before and is planning to spend up to NOK 70 billion over the next ten years. It is therefore in the public interest for Statnett to adopt socio-economically profitable and cost-effective solutions. The socio-economic analyses of many investments could be improved. The audit also shows that insufficient information is being made available to the general public concerning socio-economic aspects and costs of development projects. As owner, the ministry has not set targets for the cost-effectiveness of the enterprise, and monitoring of the company has largely been left to the sector authority and the board.
“In the opinion of the Office of the Auditor General, transparency and the achievement of goals are particularly important for verifiability and trust in a company in a monopoly situation. We believe that the Ministry of Petroleum and Energy and Statnett can improve in this area,” said Foss.
The results posted by Posten’s logistics operation have shown a weak trend
The Office of the Auditor General’s investigation shows that Posten Norge AS is not achieving the return target set by the Ministry of Transport and Communication. This is largely because the company has not met the owner's expectations concerning improved profitability in the logistics operation. The Office of the Auditor General believes that the Ministry of Transport and Communications has too passive an approach towards Posten’s weak trend in results, particularly given that the logistics operation represents a steadily increasing part of Posten's operation.
Follow-up of previously reported cases
The Office of the Auditor General has followed up six cases which have previously been reported to the Storting. Five of these cases have been closed. The case concerning the management of companies where universities and university colleges manage the owner interests will be followed up further.