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Document no. 1 (2001-2002) - Annotations concerning the Central Government Financial Statements for 2000 and cases submitted for information

Document no. 1 (2001–2002) Annotations concerning the Central Government Financial Statements for 2000 and cases submitted for information was submitted to the Norwegian parliament, the Storting, today.
Published 11/9/2001 12:00 PM

Document no. 1 (2001–2002) deals with a total of 48 matters: 34 annotations and 14 cases submitted for information. The Office of the Auditor General could not approve the accounts for 2000 of the National Hospital (University of Oslo), the Directorate of Labour (Aetat), the Norwegian Directorate of Immigration, the Norwegian Agricultural Authority, the Norwegian Grain Corporation and the Sami upper secondary schools in Karasjok and Kautokeino. No matters were raised under the Ministry of Trade and Industry and the Ministry of Fisheries.

Significant deficiencies were detected in the financial management in several agencies. Tests performed in the audit area “procurements” revealed many instances of non-compliance with regulations concerning government procurements – both the national regulations and the EEA rules. The Office of the Auditor General’s inspection of the calculation of taxes revealed several cases where tax payers have been ordered to pay too much or too little tax. For example, several cases were found where the data reported in to form the basis of calculation was not captured by the system. The audit also revealed a number of violations of the Taxation Act’s rules on legal competence. The audit of the National Insurance Service’s accounts revealed several deficiencies in the rendering of accounts and the internal control system for IT systems. This has a major impact on individuals’ rights and the National Insurance Service’s financial statements. In terms of collection of subscriptions, several matters were raised related to overdue payments and/or poor routines for collection of subscriptions and inadequate implementation of debt recovery measures. In connection with the audit of various grant schemes, the Office of the Auditor General detected inadequate follow-up on the part of the ministries and deficiencies relating to the ministries’ definition of objectives and performance review criteria.

The Ministry of Labour and Government Administration

The Office of the Auditor General reviewed the Directorate of Public Construction and Property’s use of administrative consultancy services. The principal rule for public-sector procurements is that purchases should be based on competitive tendering. The Office of the Auditor General’s audit revealed that the Directorate of Public Construction and Property generally used negotiated purchasing. Documentation of the assessments on which the choice of method of procurement was based was inconsistent. In several cases, the auditors found violations of applicable regulations and weaknesses and deficiencies in routines and the internal control system. The Office of the Auditor General regards these matters as very serious and warranting criticism.

The audit of the Directorate of Labour (Aetat)’s financial statements revealed a number of deficiencies, resulting in uncertainty regarding the reliability and completeness of the agency’s accounts. The Office of the Auditor General was therefore not able to approve the accounts for 2000.

Aetat has also entered into a series of contracts with external consultants that are in breach of the Regulations concerning Government Procurements. Aetat did not adhere to the principle of competition in its purchase of these services, and the transfer of skills and expertise from the consultants to the agency was not given sufficient priority.

In the Directorate of Labour Inspection too, matters were raised pertaining to material flaws and weaknesses in the procedures for procurement.

The Ministry of Children and Family Affairs, the Ministry of Petroleum and Energy, etc.

The Office of the Auditor General performed a test to assess implementation of the requirement to keep records regarding procurements and tenders and to obtain a tax certificate for all purchases of goods and services in the Ministry of Children and Family Affairs, the Ministry of Defence, the Ministry of the Environment, the Ministry of Cultural Affairs, the Ministry of Petroleum and Energy, the Ministry of Transport and Communications and in several of these Ministries’ subordinate agencies. This test revealed variations in practices and insufficiencies in the use of registration and records of tenders; in some of the Ministries and in many of the subordinate agencies, no such records were kept. This makes it difficult to ascertain whether the requirements regarding public-sector procurements have been observed, including the principle of purchase based on competitive tendering. In most of the Ministries and subordinate agencies tested, a tax certificate had not been obtained from the supplier concerned. Non-compliance with the obligations in respect of taxation and duties may distort competition.

The Ministry of Finance

Analyses of the tax assessment of staff at local tax offices and others revealed a number of violations of the Taxation Act’s rules on legal competence. Several cases were found where employees processed their own tax return and/or that of their spouse, partner or children and changed assessment data. However, no irregularities were detected.

The Customs and Excise Administration has not established a system for collection of the annual tax on motor vehicles. Outstanding payments on this duty have accumulated to approx. NOK 507 million.

Tests performed on the calculation of taxes and national insurance contributions revealed several cases where tax payers have been asked to pay too much tax or have been taxed too little. This is in part due to the fact that data used to calculate taxes that are submitted late are not captured in the system.

Weaknesses and instances of non-compliance were detected in the accounting and collection of the Svalbard tax and collection of taxes through the overseas assistance scheme.

The Ministry of Defence

An analysis of the introduction of a new accounting system and new rules for the administration of provisions performed on 15 units in the Norwegian Armed Forces revealed considerable faults in the internal control routines concerning consumption and stocks. The Office of the Auditor General also made some critical remarks to the Norwegian Armed Forces’ financial statements for 2000.

The Norwegian Armed Forces’ processing of value-added tax is not satisfactory. This applies to the question of registration in the business tax register, and management of value-added tax in connection with sales and refunds of duty on exported materiel. Some of these issues have been raised by the Office of the Auditor General previously, but there is still no real improvement in the way that the Norwegian Armed Forces manages these matters.

The Office of the Auditor General is critical to a number of the administrative aspects of the establishment of the KFOR peace-keeping forces in Macedonia and Kosovo. This is in respect of the planning and execution of the establishment, insufficient documentation of the costs of establishment and the question of whether some of the costs ought actually to have been charged to the special allocation that the Storting made available for this purpose.

The Office of the Auditor General has also pointed out weaknesses in various parts of the Norwegian Defence Research Establishment’s financial management.

The Ministry of Justice and the Police

The Office of the Auditor General’s follow-up of a previous annotation regarding administration of materiel in the Norwegian Civil Defence revealed that, since the last inspection, there are still many weaknesses and deficiencies in respect of supervision, structure, records and updating.

Several matters were raised concerning the introduction of a new financial management system in the courts and the financial statements and closing of the accounts for 2000.

The Ministry of Education, Research and Church Affairs

The purchase of services from the Research Council of Norway was not carried out in accordance with the Regulations concerning Government Procurements. The Storting is also being informed about certain matters concerning the administration of grants by the Research Council of Norway.

The Office of the Auditor General could not approve the accounts for the Sami upper secondary schools in Karasjok and Kautokeino.

The Ministry of Local Government and Regional Development

The Office of the Auditor General raised the issue of the Ministry’s inadequate monitoring and follow-up of grant funds allocated to the Programme of Action for development of eastern inner Oslo.

A review of the scheme “Encouraging business development” demonstrated weaknesses in the Ministry’s work to define concrete goals, performance review criteria and performance requirements, and the Ministry’s own follow-up and monitoring of the scheme.

A review of the benefit scheme “Repatriation of refugees” revealed inadequate repayment of repatriation support in the event of the person returning to Norway, as is prescribed in the regulation governing the scheme.

The audit of the Norwegian Directorate of Immigration’s financial statements revealed a number of aspects of its financial management that were not satisfactory. The Office of the Auditor General could not approve the accounts for 2000.

The Ministry of Cultural Affairs

The National Gallery has not compiled the expected inventory of the items in the Collection of Prints and Drawings.

The Office of the Auditor General pointed out that the Norwegian Council for Cultural Affairs paid NOK 1.45 million to the foundation Miljøhospitalet, in conflict with the Appropriations Regulations, for services that had not been delivered when payment was made.

A case regarding the grant scheme for production of Norwegian feature films has been submitted to the Storting, for information.

The Ministry of Agriculture

The Office of the Auditor General made several material comments regarding the financial statements of the Norwegian Grain Corporation and the Norwegian Agricultural Authority, and was therefore not able to approve their accounts for 2000.

In addition, the Office of the Auditor General noted that the Ministry of Agriculture, represented by the Norwegian Grain Corporation, has entered into an agreement concerning the purchase of IT services that does not comply with the provisions in the Public Procurement Act and the regulation on allocation of contracts for government purchase of services.

The Ministry of the Environment

A case concerning compensation for injuries to wild animals of prey is being submitted to the Storting, for information.

The Ministry of Transport and Communications

The Office of the Auditor General found that the Norwegian Air Traffic and Airport Management’s routines for updating its database of properties are insufficient, and there is no complete list of the agency’s properties.

The Ministry of Transport and Communications’ routines have entailed that the reporting to the capital accounts for 2000 was unsatisfactory.

The Ministry of Health and Social Affairs

The Office of the Auditor General detected significant deficiencies in the internal control routines of the National Hospital (University of Oslo) and could not approve the accounts for 2000.

This year, the Office of the Auditor General also pointed out several weaknesses in the National Insurance Service’s rendering of accounts, including detected weaknesses in the internal control system for IT systems, material errors in the payment of pensions determined by the recipient’s income, and weaknesses in the calculation and payment of sick pay and remuneration to doctors.

The Ministry of Foreign Affairs

The Office of the Auditor General found that in a long-term perspective, the administration of Norwegian foreign aid has been improved in many areas, but there are still a number of weaknesses and deficiencies. Issues that were raised include international accords and compliance with accords, unclear review clauses in accords, unclear procedures in connection with the formulation of concluding acts and inadequate evaluation of the total aid granted to some partner countries.

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