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Document 3:8 (2024-2025) / Published Government lease agreements

Mistakes are made and it is unclear what government agencies are allowed to agree to when entering into lease agreements. Over time, a grey area has emerged. Nine per cent of the leases investigated by the National Audit Office of Norway include terms that resemble loan terms.

Brief background

  • Government agencies can rent premises and necessary office equipment for normal operations, but the Constitution prohibits taking out loans without the consent of the Storting.
  • The case involving the Norwegian National Security Authority (NSM) demonstrated that there is a risk of government agencies making mistakes when entering into large leases.
  • In 2023, the state spent NOK 17.3 billion on renting premises. Most of the money – NOK 11.9 billion – was spent on renting premises on the market.
  • We took a closer look at 174 leases from 88 different government agencies. The total contract value for the agreements is NOK 45.2 billion.
  • We have not looked at premises rented by the Norwegian Armed Forces, which are managed by the Norwegian Defence Estates Agency in accordance with a separate set of rules.

Overall assessment

The National Audit Office of Norway finds it objectionable that

  • several government agencies have entered into agreements for the lease of premises that do not comply with the current legislation
  • the ministries’ governance and control have not been sufficient to make sure that subordinate agencies follow the procedures established to ensure compliance with the legislation
  • the Norwegian Media Authority has entered into a loan agreement in violation of the legislation

Conclusions

Recommendations

The National Audit Office of Norway recommends that

  • the ministries ensure that subordinate agencies enter into agreements on the lease of premises in line with the current legislation
  • the Ministry of Finance clarifies which expenses can be covered by rent
  • requirements are laid down for future lease liabilities to be set out in the financial statements.
Kategorier: Public administration