State auditor scolds ministries

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State Auditor Jørgen Kosmo was chiding several ministries, including the Finance Ministry, on Tuesday for what he and his team of inspectors called some “deficient documentation and internal control.” Kosmo said the lack of information made it difficult to audit various budget posts, and he seeks more transparency.

Jørgen Kosmo sees more need for improvement in budget documentation and transparency. PHOTO: Riksrevisjonen/Ilja Hendel

The criticism is contained in the annual report on accounting and control during the budget year 2010, released Tuesday by the Office of the Auditor General (Riksrevisjonen), which Kosmo, a former Defense Minister, heads.

“The general impression is that (the ministries) manage their public obligations in a proper manner, but the deficiencies highlighted in the report show that there’s room for further improvement,” said Kosmo, a veteran of the political party controlling the government, Labour.

Specifically, the report claimed that a lack of documentation makes it difficult to properly audit various budget posts in several ministries. “For example, there’s still purchasing being carried out where the purchasing process can’t be documented,” Kosmo said.

He also said that too many mistakes are being made in calculating pension payments and other welfare benefits paid out to Norwegians, another jab at the Labour Ministry and long-troubled state welfare agency NAV. Kosmo claimed his auditors also were unhappy that the state ministry in charge of renewal and administration, headed by cabinet minister Rigmor Aasrud, failed to have adequate security systems around its electronic information, while other auditing complaints ranged from lack of inspection data around railroad bridges to control of foreign aid to Afghanistan and delays in handling cases assigned to child protective services agency Barnevernet.

Norwegian Broadcasting (NRK) also reported that the Finance Ministry was scolded for allegedly withholding information that could give a clearer picture of how much Norway’s huge sovereign wealth fund, known as the oil fund, actually earns or loses. Kosmo thinks the information is necessary for his staff to fully evaluate the ministry’s control over the fund.

Yngve Slyngstad, chief executive of the fund who met with foreign correspondents in Oslo on Monday, claims the fund is highly transparent. Kosmo seems to disagree and thinks methods of reporting relevant information in, for example, foreign currencies should be changed. Gains or losses on stock portfolios as valued in Norwegian kroner aren’t revealed, even though many would likely be only paper gains or losses unless securities were actually sold .

“We’re not claiming there’s been any cheating, or cosmetic improvements to the numbers, but we disagree with the Finance Ministry over the basis of their reports,” Kosmos told NRK.no. He is demanding better insight, through currency conversions, into how the central bank (Norges Bank) manages the fund.

Finance Ministry officials reportedly responded to the auditors’ criticism by saying they hadn’t calculated all the currency conversions themselves, relying instead on the numbers provided by Norges Bank and, presumably the Norges Bank Investment Management (NBIM) division that Slyngstad heads. That’s not good enough, according to Kosmo.

The issue has also been taken up by the Progress Party in Parliament, and is considered important when calculating the value of the entire fund. That’s because the government is allowed to spend 4 percent of the value of the fund because that’s its expected annual return, and therefore the value of the fund in Norwegian currency is needed. For 2011, NRK reported, the budgeted amount was calculated to be NOK 123 billion.

Views and News from Norway/Nina Berglund

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