The Office of the Auditor General’s investigation into the Customs and Excise Department's compliance work, Document No. 3:7 (2003–2004), was submitted to the Storting (Norway's parliament) on 12 February 2004. The objective of the investigation was to assess the effectiveness and efficiency of the Customs and Excise Department's compliance work in light of the requirement that their resources should be geared to areas of greatest risk to the revenue and of serious breaches of the regulations the Department administers. In this connection, the investigation mapped and assessed the audit coverage, the results achieved and variations in auditing activities.
On a national level, there is considerable variation in how often a business liable to duties and taxes can expect to be audited. This variation is partly linked to the general staffing situation and access to competence in different parts of the country. The Department's management of the resources for compliance work was found to be insufficient, with the result that the allocation of the resources is not sufficiently tailored to the amount of work or risk of loss of revenue and economic crime. The investigation also revealed that the risk analyses that the Department performed to select businesses for audit scarcely function as a satisfactory implement to ensure an effective selection. This is partly because the analyses are too varied in both quality and design.
The Customs and Excise Department collects a considerable amount of revenue for the Treasury and obtains additional revenue of several hundred million Norwegian Kroner (NOK) annually through its audits. The Office of the Auditor General therefore deems it important that the Customs and Excise Department strengthens this important control function. This applies in particular to the largest customs region, which with time has had the lowest relative audit coverage, but in total obtained the largest additional revenue from audited businesses.
The Ministry of Finance agrees that it is necessary to improve the effectiveness of the Customs and Excise Department's compliance work, for example through better resource allocation. The Ministry points out that the reorganisation of the Customs and Excise Department, which includes merging ten customs districts into six customs regions as of 1 January 2004, will help ensure that the Department's compliance work becomes more efficient and effective.
This report is available in Norwegian on the Office of the Auditor General of Norway's website – www.riksrevisjonen.no – or can be ordered from the University bookshop Akademika, tel. +47 22 11 67 70.