The Office of the Auditor General of Norway Topic: Prevention and detection of irregularities including corruption Presentation by Dag Nenningsland, Assistant Director General 28.10.2009
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The Office of the Auditor General (OAG) •
Supervisory body of the Norwegian Parliament - established in 1816
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Act of 7 May 2004 relating to the OAG
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The OAG has approximately 500 employees
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The OAG has an independent status vis-àvis government administration
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The OAG reports the results of its auditing and monitoring activities to the Norwegian Parliament. 3
The OAG’s paramount purpose Through auditing, monitoring and guidance ensure that:
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revenues are paid as intended assets are administered in a sound financial manner, and in keeping with the Parliament’s decisions and intentions
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Reporting to the Parliament Document no. 1 • Financial audits and Corporate Control Document no. 3 series • Performance audits Document no. 2 • The OAG’s annual report 6
The Parliament’s Standing Committee on Scrutiny and Constitutional Affairs:
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Act relating to the OAG Act and Instructions relating to the OAG
• § 9: The OAG’s duties etc.: • ”The OAG shall through auditing contribute to the prevention and detection of irregularities and errors.”
Auditing standards in the OAG
Guidelines for financial auditing
Guidelines for performance auditing
Guidelines for corporate control
General Guidelines and Framework for auditing
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Audit standards of the OAG • No. 6: � When planning and performing audit procedures and assessing and reporting the results of these, auditors shall assess the risk that there may be irregularities�
Act and Instructions relating to the OAG
Auditing standards in the OAG
Guidelines for financial auditing
Guidelines for performance auditing
Guidelines for corporate control
General Guidelines and Framework for auditing
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The OAGs supplementary guidelines Act and Instructions relating to the OAG
• Prevention and detection of irregularities is relevant for all types of audit • In 2007 the OAG introduced Supplementary guidelines on prevention and detection of irregularities
Auditing standards in the OAG
Guidelines for financial auditing
Guidelines for performance auditing
Guidelines for corporate control
General Guidelines and Framework for auditing
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Corruption in public sector • Norway is regarded as being one of the countries in the world with the least corruption in society and business life • Recently the number of new corruption cases investigated by the police has increased 2004: 2, 2005:21, 2006:22, 2007:34 • Most of the corruption cases in the public sector have taken place in municipalities • The majority of the corruption cases have been discovered by chance or by media, not by auditors • Many public entities do not make risk assessment on irregularities including corruption
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4 serious corruption cases in the public sector 2004-2006 •
One case in a state entity and three cases in municipalities
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Two of the cases came to light via media, one by information from the tax authorities to the police and one through a money laundering report to the police
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In two of the cases the convicted persons were newly recruited directors, in the other two cases the convicted persons had been in the public entity for a long period
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In two of the cases the convicted persons had persued corruption for many years, with a network of private companies and associates 13
4 serious corruption cases in the public sector 2004-2006 •
Three of the cases involved men in management positions and internal or external associates
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All the main persons manipulated public procurement contracts
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The proceeds of the crimes included money, equipment, goods and travels. Two of the convicted persons gained illegal profit of millions of Euros
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In each of the cases the public entities’ internal control had serious weaknesses 14
Initiatives by the OAG against irregularities •
Introduced supplementary guidelines on prevention and detection of irregularities (2007)
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Internal competence building through training and practice, and recruitment of specialists (2007)
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Established an internal group of specialists on prevention and detection of irregularities (2008)
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Instructions from the chief executive officer of the OAG to consider the risk of irregularities for all audited entities 15
Initiatives by the OAG against irregularities •
Established an electronic channel for citizens for submitting information on irregularities (2008)
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Established internal ethical guidelines (2008)
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Established a system and procedures for whistleblowing (2008)
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Established cooperation with law enforcement and other relevant public offices (2008)
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Corporation with public supervisory authorities •
According to the Act relating to the OAG § 15, The OAG can make a report to the police if an audit reveals circumstances indicating a criminal offence.
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The OAG can also cooperate whenever relevant with other public supervisory authorities.
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The OAG cooperates with the The Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime (Økokrim)
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The OAG has also established contact with the tax authorities and The Norwegian Labour and Welfare Administration 17
Riksrevisjonens homepage for further information • riksrevisjonen.no
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