Top officials at Norway’s state welfare agency NAV, which administers all pension and sick leave payments along with other welfare benefits, admitted they may have wasted as much as NOK 340 million (USD 50m) on failed efforts to streamline and improve the agency’s various and dated computer systems. NAV’s bosses accepted criticism at a parliamentary hearing on Friday, but couldn’t explain what went wrong.
Between NOK 110 million-170 million has been lost on a system that broke down, NAV confirmed, and its supplier refused to accept responsibility. NAV’s labour union claims it issued warnings over the large amounts being spent on a failed plan to modernize NAV’s computer systems, without being heard. Martin Kolberg, the veteran Labour Party politician who ran the hearing before the Parliament’s disciplinary committee, was dissatisfied and confused when the hearing was all over.
“We’re not getting the answers about how this could happen,” Kolberg told state broadcaster NRK. The lack of control over NAV’s systems development and spending on the modernization plan was revealed in a harsh report from the state auditor general (Riksrevisjonen), which led to the hearing being held.
NAV’s chief executive, Joakim Lystad, former Labour Minister Anniken Huitfeldt of the Labour Party and her successor, current Labour Minister Robert Eriksson of the Conservative Party were among those called in to testify. Lystad admitted NAV didn’t have the competence to administer the modernization plan, and ended up trying to cut its losses before they became even greater.
NAV’s former IT director, Nina Aulie, has claimed she was pressured into resigning at the end of October, in part because of a critical report compiled by consulting firm McKinsey that suggested the modernization program was plagued by “too many cooks” and a lot of sloppiness. NAV also was accused of using too many consultants, with its IKT department consisting of 493 full-time employees and 445 consultants.
Labour Minister Eriksson, who took over after the ill-fated modernization program was halted, said he now thinks NAV is on the right track. Lystad insisted modernization is continuing, with much better results. “We’re working intensely and are goal-oriented to improve our systems,” he said. “The goals are remain firm.” Parliament remains critical, and concerned.