Document 3:4 (2014–2015) The Office of the Auditor General's investigation of internal controls in the procurement area in the Norwegian Public Roads Administration was submitted to the Storting (Norwegian Parliament) on 17 December 2014.
Procurement is a very important part of the operations of the Norwegian Public Roads Administration.
In 2013, the agency's procurement totalled around 80 per cent of its turnover, approx. NOK 40 billion. It is a decentralised organisation where a large number of its 7000 employees have procurement authority. - It is important for the Norwegian Public Roads Administration to have effective risk management and internal controls concerning procurement to ensure that the agency reaches its goals, says Foss.
The OAG has ascertained that the agency has established a quality assurance system and several guidelines, routines and manuals that cover the reporting, uncovering and handling of questionable matters. - However, this has not been adequately implemented in practice, and there are a number of breaches of applicable regulations, says Foss.
The OAG has concluded that neither the agency itself nor the Ministry of Transport and Communications has ensured sufficient management, control and follow-up. Risk assessments have also only rarely been conducted to ensure regulatory compliance and prevent misconduct.
- The Ministry has issued general signals indicating that the agency must establish risk management and internal controls, but should have done a much better job of following up the quality of these internal controls on procurement, says Auditor General Foss.
The investigation also shows that the agency's employees do not have the necessary confidence in its reporting system, and that questionable matters are not reported due to uncertainty surrounding how this would be handled by the agency's management.
The OAG recommends that the Ministry of Transport and Communications, in cooperation with the Norwegian Public Roads Administration, strengthen internal controls, reinforce familiarity with procurement regulations on the part of all those involved in procurement, improve the reporting system and assess the advantages and disadvantages of somewhat more centralised procurement activities.
The Minister of Transportation points out that the OAG's recommendations are important, and that the Ministry will follow up findings in its supervision dialogue with the Directorate of Public Roads, both through agency management meetings and in written correspondence with the agency.