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Many reasons why state entities fail to comply with the Procurement Regulations

Many state entities lack procurement expertise and knowledge of the regulations. Few ministries evaluate their procurement practices, and the management of subordinate entities fails to adequately follow up this area. ‘Inadequate compliance with the regulations weakens confidence in the government administration,’ says Auditor General Jørgen Kosmo.
Published 2/16/2011 12:52 PM

Document 3:6 (2010–2011) The Office of the Auditor General’s investigation into reasons why state entities fail to comply with the Public Procurement Regulations was submitted to the Storting on 15 February 2011.
State entities frequently breach the Public Procurement Regulations. The Office of the Auditor General’s investigation shows that this is due, among other things, to poor procurement expertise, insufficient understanding and support among management, inadequate internal control and inexpedient organisation of procurement work. Over a three-year period, the Office of the Auditor General identified a total of 1,196 breaches of the regulations in 616 separate cases. Lack of competition was found in more than half of them. ‘The managements of these entities must ensure that procurement is based on competition, and that this is documented,’ says Mr Kosmo.

There is reason to believe that the ministries do not have adequate information about procurements in subordinate agencies, among other things because they have not carried out evaluations of the procurement practice of these entities or stipulated requirements for following up procurement practice. The investigation shows that the responsible ministries must follow up subordinate agencies more closely with a view to preventing new breaches of the regulations. Procurement is an area with a high risk of irregularities. This makes it particularly important to have internal control in place that can ensure that the requirements set out in the regulations are met. ‘Sixteen of 27 entities that were asked stated that some purchases were not subject to competition because the supplier was already known to them. This is a serious breach of the regulations that does not serve to further equal treatment or competition,’ Mr Kosmo points out.

For several years, the Office of the Auditor General has reported failures to comply with the Procurement Regulations to the Storting. While the individual agencies and ministries have a responsibility for good procurement practice, the Ministry of Government Administration, Reform and Church Affairs must work more on measures that can help to prevent breaches of the regulations and give higher priority to the work of producing a more reliable data basis for public procurements. ‘The Board of Auditors General would also like to point out that low amount thresholds combined with the extensive requirements that apply to the implementation of public procurements may have contributed to the failure to comply with the regulations,' concludes Jørgen Kosmo.

The document can be downloaded via the link on the right. Public institutions can order the document from Government Administration Services, tel. (+47) 22 24 20 00, e-mail publikasjonsbestilling@dss.dep.no. Others can order the document from Fagbokforlaget, tel. (+47) 55 38 66 00, e-mail offpub@fagbokforlaget.no.


The deferral of public access to documents prepared by or for the Office of the Auditor General in connection with Doc. no 3:6 (2010-2011), cf. the Act relating to the Office of the Auditor General section 18 second paragraph, is hereby set aside.

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