Photo: Ilja Hendel

Office of the Auditor General of Norway annual report for 2019 – Document 2 (2019–2020) Auditing to benefit the society of tomorrow

Contents 1 Message from the Auditor General ...... 3 2 A little about us ...... 4 2.1 Role and duties ...... 4 2.2 How we work ...... 4 2.2.1 Financial audits and control of central government accounts ...... 4 2.2.2 Performance audits and compliance audits ...... 5 2.2.3 Annual corporate controls ...... 5 2.3 Organisation and leadership ...... 6 2.4 Employees and geographical distribution ...... 7 3 This year’s activities and results ...... 8 3.1 Results within the strategic goals...... 8 3.1.1 Goal 1: The Office of the Auditor General will be society’s foremost provider of current and relevant public auditing ...... 8 3.1.2 Goal 2: The Office of the Auditor General will carry out audits and high-quality controls ...... 9 3.1.3 Goal 3: The Office of the Auditor General will be an efficient organisation ...... 9 3.2 Audit-related activities and results ...... 10 3.2.1 Financial audits and control of central government accounts ...... 10 3.2.2 Performance audits, compliance audits and corporate controls ...... 11 3.3 International involvement ...... 16 3.3.1 Development and collaboration on public auditing ...... 16 3.3.2 Professional support for Supreme Audit Institutions in developing countries ...... 16 3.3.3 Auditing of international organisations ...... 17 3.4 Support functions and administration ...... 17 4 Management and control of the organisation ...... 18 4.1 The Office of the Auditor General’s quality assurance system ...... 18 4.2 Periodic planning and follow-up ...... 18 4.2.1 Strategic plan ...... 18 4.2.2 Annual performance plan ...... 18 4.2.3 Development work – Modernisation programme ...... 18 4.3 Operational management ...... 20 4.4 Expertise, working environment and equality ...... 20 4.5 Sustainability ...... 22 5 Future outlook ...... 23 6 Budget and accounting 2019 ...... 24 6.1 Managerial salaries ...... 24 6.2 Underspend...... 24 Appendix 1: Management commentary to annual accounts for 2019

Appendix 2: Annual accounts 2019

Appendix 3: Auditor’s report

Appendix 4: Briefing on the INTOSAI Development Initiative (IDI)

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1 Message from the Auditor General

The Office of the Auditor General of Norway is the Storting’s biggest and oldest regulatory body. Our task is to check how well the Government and central government are doing their jobs. We do this through audits, controls and investigations of the ministries, more than 200 other state organisations and state-ownership interests in around 110 companies, and the ministries’ governance of these.

Our overarching vision is for the Office of the Auditor General to benefit the society of tomorrow. We will

 deliver a solid description of facts which the Storting can use to supervise the government  help to improve central government  provide the general public with access to how public money is administered

2019 was an exciting year in the Office of the Auditor General. We audited the State Accounts and the accounts of a total of 232 organisations for 2018. We also provided the Storting with 29 individual investigations. The subjects we examine vary widely. What they all have in common is that they are important to society, and include health, safety and the environment in the petroleum sector, processing time in the courts, and the authorities’ initiatives against serious breaches of the Animal Welfare Act.

We have also been working to modernise, streamline and digitalise work in our own organisation. One of the projects we are working on aims to streamline the financial auditing process. We audit the Norwegian Agency for Public and Financial Management (DFØ), which is the central accounting office for many state organisations, and have thereby streamlined the auditing process for individual organisations. This measure is important because it improves the quality of audits and reduces the time spent on them by ourselves in the Office of the Auditor General and by central government.

Our objective is not to find errors, but to prevent serious errors from being made. That is why we must advise the public administration. We do this through ongoing dialogue, and we find that most accounting errors are corrected during the audit. Of the 232 organisations’ accounts that we audited, 227 had no major errors or omissions. These are extremely good figures and show that the advisory role is working. I believe that this will become increasingly important in the years ahead, because it is a constructive and cost-effective way of working.

In 2019, both the press and the Norwegian Labour Inspection Authority were critical in their scrutiny of our compliance with the provisions of the Working Environment Act regarding working hours. I believe that it is a good thing that regulatory bodies like the Office of the Auditor General are also supervised. It gives us the opportunity to develop and improve. What we learnt from 2019 is that we must find a better balance between ambitions and resources. As the Storting’s regulatory body, it is particularly important for us to comply with the laws passed by the Storting, and to lead the way by acting as a good example.

Security is on everyone’s agenda, including ours at the Office of the Auditor General. This applies particularly to security of information. Our risk assessments and requirements regarding the handling of classified information will require attention and investment in the years ahead.

The Office of the Auditor General has a national regulatory responsibility. We are represented all over the country – from Tromsø to Kristiansand. We appointed more staff to our regional offices in 2019. Our aim is to have robust specialist teams. With the exception of corporate control, all audit types are represented at the regional offices. To ensure that our offices work together well and effectively, we operate user-friendly and robust video-conference systems and other methods of digital collaboration.

The work of the Office of the Auditor General ensures that there is transparency. There has also been debate in 2019 about the classified status of some of our reports. The basic principle is that our investigations must be accessible to the public once we have delivered them to the Storting, but other factors must sometimes be taken into consideration. Transparency is important if we are to build trust between the general public and the public authorities, trust which is vital if a democracy is to work. I am proud of the work invested in this every day by the 471 staff of the Office of the Auditor General.

Auditor General Per-Kristian Foss

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2 A little about us

2.1 Role and duties

The Office of the Auditor General of Norway (OAGN) is the regulatory body of the Norwegian parliament (Storting). We conduct controls and investigations of the ministries, other state organisations and state interests in companies. The Office of the Auditor General is the only institution that can provide the Storting with a comprehensive and independent audit of the state. Our controls and investigations are based on measures that have been decided by the Storting, such as laws and adopted budgets. We

 Audit central government accounts  Check that acts, rules and adopted budgets are being complied with  Investigate finance, productivity, achievement of goals and effects Inspect the management of the state's interests in companies  Prevent and detect irregularities and errors  Advise the public administration in order to prevent future errors and omissions

Acts and instructions regarding the Office of the Auditor General define the general limits of our work. We use INTOSAI’s1 international framework and standards for public audits, which contain basic principles and quality requirements for government audits.

Within this framework we operate independently of the Storting and central government. Our investigations are objective and are intended to provide the Storting with an expert basis from which to perform its supervisory function of the government. In the main, we decide what we will investigate, but in plenary session, the Storting may instruct us to perform special investigations. In 2019, the Storting decided that we should investigate how the authorities have assumed their responsibility before and after the Alexander Kjelland accident.

2.2 How we work

We are instructed to perform regular annual audit assignments such as financial audits and corporate control. We also decide what we should audit, on the basis of assessments of risk and significance. Our objective is always to provide the Storting with up-to-date, relevant information.

2.2.1 Financial audits and control of central government accounts Financial audits are the foundation of the Office of the Auditor General’s work and are conducted annually.

We audit central government accounts and all the accounts of state organisations, including the ministries and the Prime Minister’s office. We also audit the accounts of the Storting, Sámi Parliament and five other organisations located in Norway. Through our financial audits, we aim to provide reassurance that the state accounts do not contain major errors or omissions, and that the accounts have been prepared in line with applicable regulations and the financial framework2.

Audits of an organisation’s accounts include a financial audit of the annual accounts and checks against the administrative regulations for public sector financial management if we have identified a risk that these may not have been complied with. The results are reported annually in the form of an auditor’s report for each organisation. We also prepare a declaration on the central government accounts. The most important findings are reported to the Storting in Document 1.

Guidance and dialogue We guide the organisations to help ensure that they prepare their accounts without major errors or omissions. Auditors provide guidance through the annual audit programme, both when the audit is being planned and conducted, and when the audit report is issued. This guidance is provided in dialogue with the organisation being audited, and concerns both its accounts and its internal control procedures.

1 International Organization of Supreme Audit Institutions 2 In central government, this includes the appropriation regulations, regulations for public sector financial management (financial management regulations) and associated circulars, and the state accounting standards for the organisations that submit periodised accounts.

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We aim to provide guidance in a way that does not jeopardise the independence and objectivity of the Office of the Auditor General in the subsequent audit. We assume that the organisations being audited ensure that they have systems in place at all times to address quality control needs. They have an independent responsibility for accounting and internal control, irrespective of our guidance.

2.2.2 Performance audits and compliance audits Risk and significance normally decide what we investigate. When we choose an area to audit, we always base this on what it is important for the Storting to be informed about. Relevant questions are whether the area being considered is of major financial, social or fundamental importance. We also assess whether there is a likelihood of errors, non-compliance with decisions, or non-achievement of targets. We also look at whether these will have negative consequences.

Every year, we perform a process in which we identify potential new audit assignments. We monitor key social areas and also use information from financial audits and other audit work. In addition, we obtain information from a range of external sources, such as research communities, academia, the media and our own external tip-off channel.

We then decide which investigations we should prioritise. The length of an audit operation varies, but the process is relatively similar. In the various phases, we re-evaluate whether we should stop or continue with the investigation, based on significance and risk.

The Board of Auditors General makes a final decision as to which investigations we will perform.

The audit process can be summarised as follows:

Planning During the planning phase, we carry out a more detailed risk analysis to clarify whether there is sufficient risk in the area to justify an investigation. We also obtain more information in order to ensure that we have a good understanding of administration in the area, and we use this as a basis on which to develop an implementation plan for the investigation. In this plan, we decide on the aim of the investigation, problems, audit criteria and the method of gathering and analysing information. During the planning phase, we are also in dialogue with the organisation or ministry to be audited about how tasks will be performed and which specialist norms and rules apply to the area (audit criteria).

Implementation If we consider that an investigation could detect major weaknesses and thereby contribute to improvements, we perform the audit. During the implementation phase, we obtain the information we require and perform the analyses needed to address the goals and problems of the investigation. In the report, we summarise the findings and present a conclusion in relation to the audit criteria. A draft of the report is sent to the audited ministry or organisation for review, and they have the opportunity to submit feedback.

Reporting Based on the audit findings and the ministry’s feedback, we assess whether the case should be reported to the Storting. Final processing is undertaken by the Board. Reports which are to be sent to the Storting are submitted to the minister responsible for comment. The minister’s response is attached to the report. The reports are made public after they have been delivered to the Storting.

Follow-up When the Storting has received the reports, they are considered by the Standing Committee on Scrutiny and Constitutional Affairs and then by the Storting. We normally follow up on the reports in order to provide the Storting with information about what the administration has done in the time since the investigation was reported.

2.2.3 Annual corporate controls Through annual corporate controls, we investigate whether the administration of state interests in companies is in line with the Storting’s prerequisites. We focus particularly on whether the administration is in compliance with acts and regulations. We also follow up to ensure that we are receiving statutory information from the companies.

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2.3 Organisation and leadership

The Office of the Auditor General is run by a Board made up of five auditors general who have been selected by the Storting. The Storting selects the members of the Board every four years after the parliamentary election. The Board determines which investigations we will perform and processes the audit reports before they are presented to the Storting. Per-Kristian Foss is the Chairman of the Board and is the Managing Director of the Office of the Auditor General.

Board of Auditors General 2018-2021

Auditors General Role Deputies

Per-Kristian Foss Chairman Martin Engeset

Helga Pedersen Vice-chair Per Rune Henriksen

Gunn Karin Gjul Beate Heieren Hundhammer

Arve Lønnum Kenneth Svendsen

Anne Tingelstad Wøien Heidi Grande Røys

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The Secretary General is the senior administrative and technical manager, and assists the Audit Council In the day-to-day management of the organisation. The Secretary General is also the secretary of the Board.

The Office of the Auditor General is organised into seven departments, each of which is led by a Director General. The auditing departments are divided by type of auditing and the ministries that they audit.

2.4 Employees and geographical distribution

As of 31 December 2019, the Office of the Auditor General had 471 employees. They are mainly economists, auditors, lawyers and social scientists.

In 2019, we performed work corresponding to 420 full-time equivalents. Since 2014, we have reduced the total number of full-time equivalents by just over 7 per cent.

Our head office is in Oslo, and we have regional offices in Bergen, Bodø, Hamar, Kristiansand, Tromsø and Trondheim. As of 31 December 2019, 68 of our employees worked outside of Oslo. Our strategy is to have a clear regional presence. In 2019 we appointed more staff to several regional offices. Most of the regional offices now have between 10 and 15 staff.

For more details, see sections 3, 4 and 6.

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3 This year’s activities and results

3.1 Results within the strategic goals

The Office of the Auditor General’s strategic plan covers the 2018–2024 period. Our vision is to deliver “auditing to benefit the society of tomorrow”, and we work towards three main goals. We will

 Be society’s foremost provider of current and relevant public auditing  Conduct audits and high-quality controls  Be an efficient organisation

3.1.1 Goal 1: The Office of the Auditor General will be society’s foremost provider of current and relevant public auditing Contribute to the Storting’s supervision of the public administration The Office of the Auditor General provides an important contribution to the Storting’s supervision of the public administration through financial audits, performance audits, compliance audits and corporate controls. In addition to its standard consideration of our reports in 2019, the Storting also used 44 of the Office of the Auditor General’s various cases in its work, according to our review of the Storting’s operations. That is about the same level as in 2018. Our investigations were used in committee recommendations, written questions, Question Time questions, private members’ bills and debates. The most frequently discussed issues include health and care for the elderly, child welfare, object security, petroleum activity in the High North and the Petroleum Safety Authority Norway’s follow-up of HSE.

Contribute to improving the public administration We send user surveys to the people we audit. The surveys show that the public administration perceive our audits to be relevant and useful, and that they are used to make specific improvements. Once again, the feedback in 2019 was consistently good. In financial audits, the feedback shows that audits and guidance lead to better financial reporting, financial management and internal control in the public administration.

Our follow-up of previous reports shows that the public administration has implemented numerous substantial changes and improvements following our investigations. Furthermore, in most cases, the public administration’s follow-up of the Storting’s comments and the Office of the Auditor General’s recommendations was such that our follow-up was no longer necessary. In some cases, it is too early to assess whether the changes implemented have yielded improved results.

It is our assessment that the Office of the Auditor General delivers a significant contribution to improving the public administration, but that there are still opportunities to increase the use of the results of our audits.

Offer benefit, credibility and relevance to the general public Our investigations examine topics that affect anyone among Norway’s general public. Our findings are an important contribution to the public debate. The media are our most important channel in communicating the results of our investigations to the public.

In 2019 we had over 3500 instances of media coverage, which corresponds to a normal year. There were fewer instances of media coverage compared to 2018 and 2017. This is primarily because the investigations of object security and the Storting’s construction project received a great deal of attention in 2018 and 2017, but also because we performed fewer investigations in 2019.

The media coverage is generally neutral. This means that the results of our investigations are used as the basis for media topics. In 2019, these reports received the greatest media coverage:

 The Petroleum Safety Authority Norway’s follow-up of health, safety and environment issues  The authorities' work on safeguarding the environment and fisheries in relation to activities in the High North  Case processing time and efficiency in the district courts and courts of appeal  Predator management

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 Annual audits and controls, fiscal year 2018 (Document 1 (2018–2019)), particularly the investigations of attacks on the police’s3 ICT systems, protection against cyber attacks on the Norwegian Petroleum Directorate, and the authorities’ initiatives against serious breaches of the Animal Welfare Act

In January 2019, we relaunched our website, riksrevisjonen.no. The objective was to improve the quality of our external communication and help to increase the use of the results of our audits. The main principle was for our website to be easy to use and the content easy to understand.

We receive a number of requests from ministries, audited organisations and other stakeholders to present the findings of our audits. We regard this as positive and try to accommodate such requests.

Every two years we participate in the PR Barometer, which measures our media work and provides an indication of the leadership’s reputation with the media according to several different criteria. On the whole, the 2019 results show an increase in several areas. The leadership has a high level of visibility and a good reputation, although there has also been negative media coverage of the Office of the Auditor General.

3.1.2 Goal 2: The Office of the Auditor General will carry out audits and high-quality controls We assess the quality of the work in our audits on the basis of professional quality (product quality) and the quality of the process and the communication we have with the people we are auditing (process quality).

Product quality Various quality reviews show that our audits are generally of a high professional quality. The Office of the Auditor General has a comprehensive apparatus for ensuring that an audit satisfies the relevant international standards and meets the specified requirements regarding independence, objectivity and the professional discretionary assessment of findings and conclusions.

We have worked throughout 2019 on updating our audit guidelines, in line with international standards.

We carry out quality controls on completed audits. In 2019, several financial assignments underwent quality control to ensure that they were conducted in accordance with professional auditing standards and guidelines. The controls showed that the quality was consistently high. Areas for improvement include ensuring that there is consistency through all the phases of the audit process, and appropriate use of the organisations’ internal control processes as a basis for the structure of the audit. We use these findings for internal training and improvement of our financial audits.

The last external evaluation of our performance audits was in 2017, and we plan to follow up on this with a new evaluation.

Process quality We want to be open and user-oriented in our communication. In the user surveys, we ask audited organisations about their perception of the audit process, including communication with us and whether the audit was conducted in a professional manner. We receive consistently good feedback, and the public administration finds that the auditing process is good.

3.1.3 Goal 3: The Office of the Auditor General will be an efficient organisation The Office of the Auditor General will be a well-managed organisation that delivers controls and audits effectively. Several measures have been implemented to streamline our operations. We work continuously in order to benefit from our development projects, within both audit and support functions. The benefits involve financial savings and reductions in time and/or resources. The number of full-time equivalents has reduced since 2014, and we anticipate further reductions in the years ahead.

The development projects are presented in more detail in section 4.2.3.

To be able to continue to fulfil our social mission in the future, we carry out extensive and complex work to develop the Office of the Auditor General. Our staff are our most important resource. Alongside our development projects,

3 The report is classified and exempt from public disclosure

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we facilitate various skills development measures for staff, in order to ensure that our expertise is in line with future needs.

Over the course of several years, we have reduced the number of printed reports. New websites and other development work have contributed to more digital communication, one of the effects of which has been to reduce printing costs significantly in the 2016–2019 period. These costs will probably disappear altogether in 2020, since our reports will only be published digitally from now on.

This year’s results and activities are described in more detail in sections 3.2–3.4 and 4.2.

3.2 Audit-related activities and results

We performed audit work corresponding to 274 full-time equivalents in 2019. This represents more than 65 per cent of our total resources. The percentage has been stable over time. Financial audits and control of central government accounts represent the area using the most resources.

Human resources used for audits

Full-time equivalents Full-time equivalents Type of audit 2019 2018

Financial audits and control of central government accounts 113 116

Performance audits of public administration organisations and 85 76 companies

Compliance audits 20 21

Annual corporate controls 5 5

Other audit-related activities4 51 52

Total 274 270

3.2.1 Financial audits and control of central government accounts In 2019, we audited the accounts of 232 organisations for the 2018 financial year.

A total of 227 accounts received an unmodified opinion in the audit report, which means that the accounts were without major errors or omissions.

A total of five accounts received a modified opinion in the audit report. For three of these, this was because the accounts contained major errors or omissions. For two of the organisations, we were unable to give an opinion because the accounts were prepared according to different principles than anticipated.

A total of nine organisations received a modified opinion because they failed to comply with the administrative regulations for public sector financial management.

The State Accounts are a composite of all central government accounts. The supervision of the State Accounts is based on financial audits of the ministries and their subordinate agencies, and audit processes covering the State Accounts themselves. In the declaration for 2018, we consider the State Accounts to be essentially correctly prepared and presented. This means that the principles of the Appropriation Regulations have been essentially complied with.

4 Activities across the various types of audits, such as work on identifying new audit assignments, audit-related management work and quality assurance.

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3.2.2 Performance audits, compliance audits and corporate controls Audits across ministry areas The Office of the Auditor General has unique access to information, and we have the opportunity to perform investigations across ministry areas. Many of our investigations are either cross-sectoral, in the sense that several ministries have roles and duties within the area we are investigating, or are cross-ministerial, in the sense that the topic of the investigation focuses on several ministries.

Most recently in its consideration of Document 2 (2018–2019), the Storting emphasised the importance of the fact that the Office of the Auditor General performs investigations and evaluates significance and risk across the ministry areas.

In 2019 we reported on the following investigations across the Storting’s ministries:

 The ministries’ management information and reporting to the Storting on the area of child poverty  The authorities’ work on integrating immigrants by making them eligible for work  Predator management  The authorities' work on safeguarding the environment and fisheries in relation to petroleum activities in the High North

The latter two reports were among the cases which received the most media attention in 2019.

As we enter 2020, we are working on the following investigations across the ministries:

 Management and reporting on the national follow-up of the UN’s Sustainable Development Goals  Initiatives against violence in close relationships  The work of adapting buildings and infrastructure to a changing climate  Export control of military material and dual-use items  Assistance for children and young people with disabilities and their families

Performance audits Performance audits enable us to perform major, systematic investigations, the aim of which is to show how the government and public administration are implementing the measures adopted by the Storting, and what results and effects public initiatives have had. These investigations study in depth the relevant problems within a defined field and cover extended periods of time. Our investigations of how an administration is fulfilling its duties can include evaluations of whether results are being achieved in terms of cost and efficiency.

We submitted 21 performance audits to the Storting in 2019:

Report to Storting The authorities’ work on integrating immigrants by making them eligible for work Document 3:4 (2019–2020), 26 Ministry of Labour and Social Affairs, Ministry of Education and Research and Ministry of November 2019 Justice and Public Security

The Petroleum Safety Authority Norway’s follow-up of health, safety and environment issues in the petroleum industry Document 3:6 (2018–2019), 15 January 2019 Ministry of Labour and Social Affairs

The ministries’ management information and reporting to the Storting on the area of child poverty Document 1 (2019–2020), 8 October 2019 Ministry of Finance

Infrastructure and support functions for the fighter aircraft’s operational 5 capacity Document 3:11 (2018–2019), 7 May 2019 Ministry of Defence

5 The report is classified and exempt from public disclosure

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Staffing level challenges in the health authorities Document 3:2 (2019–2020), Ministry of Health and Care Services 26 November 2019

Restructuring of the area of procurements for enterprises reporting to the Ministry of Health and Care Services Document 1 (2019–2020), 8 Ministry of Health and Care Services October 2019

Causes of variation in the consumption of health services Document 3:2 (2019–2020), Ministry of Health and Care Services 26 November 2019

Case processing time and efficiency in the district courts and courts of appeal Document 3:3 (2019–2020), 22 Ministry of Justice and Public Security October 2019

The Norwegian-Russian bilateral environmental cooperation – parallel audit with the Russian Federation's Supreme Audit Institution Document 3:8 (2018–2019), 26 March 2019 Ministry of Climate and Environment

Predator management Document 3:13 (2018–2019), 18 Ministry of Climate and Environment and Ministry of Agriculture and Food June 2019

Consideration of objections in planning matters Document 3:7 (2018–2019), 15 Ministry of Local Government and Modernisation January 2019

The use of digital solutions when establishing restaurants Document 1 (2019–2020), 8 Ministry of Local Government and Modernisation October 2019

Approval of education and vocational qualifications from abroad Document 3:12 (2018–2019), 18 Ministry of Education and Research June 2019

Sámi students’ right to education in and about the Sámi language Document 3:5 (2019–2020), 26 Ministry of Education and Research November 2019

The authorities’ initiatives against serious breaches of the Animal Welfare Act in agriculture Document 1 (2019–2020), 8 October 2019 Ministry of Agriculture and Food

Agency and organisational management of the Institute of Marine Research Document 1 (2019–2020), 8 Ministry of Trade, Industry and Fisheries October 2019

Statkraft’s profitability and foreign investments Document 3:2 (2019–2020), Ministry of Trade, Industry and Fisheries 26 November 2019

The authorities' work on safeguarding the environment and fisheries in relation to petroleum activities in the High North Document 3:9 (2018–2019), 26 Ministry of Petroleum and Energy, Ministry of Climate and Environment and Ministry of March 2019 Labour and Social Affairs

Agency and organisational management of the Civil Aviation Authority Norway Document 1 (2019–2020), 8 Ministry of Transport and Communications October 2019

Information on the results of education aid Document 3:10 (2018–2019), 7 Ministry of Foreign Affairs May 2019

Information on auditing of the Sámi Parliamentary Council’s management system for the achievement of goals Document 1 (2019–2020), 8 October 2019

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The Sámi Parliament of Norway

We have also published an administrative report on an analysis of the operations of the Norwegian Seafood Council6. Administrative reports are not submitted to the Storting as separate cases, but are sent to the Standing Committee on Scrutiny and Constitutional Affairs, the relevant standing committee and the relevant ministries for information. They are also published on our website.

As we enter 2020, we are working on 24 investigations which we are planning to report to the Storting:

Processing of complaints and appeals in NAV and the National Insurance Court

Ministry of Labour and Social Affairs

State child welfare authorities’ safeguarding of the child’s best interests in placements and follow-up of children in child welfare institutions

Ministry of Children and Family Affairs

The Norwegian Armed Forces’ logistics organisation’s ability to support the Armed Forces in peace, crisis and war

Ministry of Defence

Communication and information sharing between the Norwegian Armed Forces’ command and control Information systems

Ministry of Defence

Treatment and follow-up of people with psychiatric disorders and mental problems

Ministry of Health and Care Services

Clinical treatment studies in the health authorities

Ministry of Health and Care Services

Assistance for children and young people with disabilities and their families

Ministry of Health and Care Services

Efficiency of the processing of compensation claims in the area of patient injuries

Ministry of Health and Care Services

Prevention of attacks on ICT systems in the health authorities

Ministry of Health and Care Services

The Ministry of Health and Care Services’ control of ICT development in the health sector

Ministry of Health and Care Services

Investments in the health authorities’ buildings and technical medical equipment

Ministry of Health and Care Services

Police initiatives against cybercrime

Ministry of Justice and Public Security

The authorities’ initiatives against violence in close relationships

Ministry of Justice and Public Security, Ministry of Health and Care Services, Ministry of Labour and Social Affairs and Ministry of Children and Family Affairs

6 Administrative report 1 2019, published on 22 November 2019.

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The authorities’ work on adapting buildings and infrastructure to a changing climate

Ministry of Climate and Environment

Management and reporting on the national follow-up of the UN’s Sustainable Development Goals

Ministry of Local Government and Modernisation

Agency and organisational management of the Norwegian Institute of Bioeconomy Research (NIBIO)

Ministry of Agriculture and Food

Quota system for coastal and deep-sea fishing

Ministry of Trade, Industry and Fisheries

Control and follow-up of operations and targets achieved in Space Norway AS

Ministry of Trade, Industry and Fisheries

The authorities’ handling of their responsibility in relation to the Alexander Kjelland accident

Ministry of Labour and Social Affairs, Ministry of Justice and Public Security, Ministry of Health and Care Services, Ministry of Trade, Industry and Fisheries, Ministry of Petroleum and Energy

The Norwegian Water Resources and Energy Directorate’s work on security in the power supply

Ministry of Petroleum and Energy

Operation, maintenance and investments in Bane NOR SF

Ministry of Transport and Communications

Causes of conflict between construction clients and contractors in public road development projects

Ministry of Transport and Communications

The authorities’ export control of military material and dual-use items

Ministry of Foreign Affairs

Norwegian support for World Bank funds

Ministry of Foreign Affairs

Compliance audits Compliance audits enable us to check that state organisations are spending money in the manner decided by the Storting, and that they are complying with acts and regulations.

We reported eight compliance audits through Document 1 (2019–2020), which was submitted to the Storting on 8 October 2019:

Procurements and follow-up of labour market measures in the Norwegian Labour and Welfare Administration

Ministry of Labour and Social Affairs

The right aids for housing adaptation for persons with disabilities

Ministry of Labour and Social Affairs

Attacks on ICT systems in the Norwegian Police Service7

Ministry of Justice and Public Security

Unspent budget funds at universities and colleges

7 The report is classified and exempt from public disclosure

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Ministry of Education and Research

The authorities’ processing and control of production subsidies and farm subsidies in agriculture

Ministry of Agriculture and Food

Protection against cyber attacks in the Norwegian Petroleum Directorate

Ministry of Petroleum and Energy

Ministry of Foreign Affairs’ compliance with the procurement regulations

Ministry of Foreign Affairs

Protection against cyber attacks in the Ministry of Foreign Affairs8

Ministry of Foreign Affairs

We have also published a report on the management of grants to national minorities. The grant scheme is administered by the Ministry of Local Government and Modernisation. The report was not submitted to the Storting as a separate case. The report was published on our website.

In 2019, we also reported on an investigation of the Sámi Parliament of Norway regarding processing of grants in the Sámi Parliamentary Council and the Board of Appeal. The report was published on our website.

As we enter 2020, we are working on nine investigations which we are planning to report to the Storting in Document 1 in 2020:

Analysis of the accounts of pre-approved suppliers of labour market measures

Ministry of Labour and Social Affairs

The Storting’s prerequisites for the fee systems in R-112

Ministry of Finance, Ministry of Justice and Public Security, Ministry of Local Government and Modernisation, Ministry of Trade, Industry and Fisheries, Ministry of Transport and Communications

Civil protection and preparedness in state organisations reporting to the Ministry of Education and Research

Ministry of Education and Research

The university and college sector’s financial involvement in peripheral companies

Ministry of Education and Research

Public Art Norway (KORO), administration of state art

Ministry of Culture

Grant scheme for the employment of seafarers

Ministry of Trade, Industry and Fisheries

Norwegian Water Resources and Energy Directorate’s supervision of watercourse facilities

Ministry of Petroleum and Energy

Norwegian Public Roads Administration’s inspection and follow-up of landslide and avalanche protection

Ministry of Transport and Communications

Document security and archive management in Norwegian diplomatic missions

Ministry of Foreign Affairs

8 The report is exempt from public disclosure

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We are also working on an investigation focusing on basic security of objects, which we are planning to report to the Storting in Document 1 in autumn 2021.

Corporate control In 2019, we inspected the ministerial exercise of authority in 12 owner ministries. The state has ownership interests in 49 wholly owned private limited companies, 29 partly owned limited companies, 1 joint-stock liability company, 7 public limited companies, 8 state enterprises, 4 regional health authorities, 14 student welfare organisations and a further 6 companies covered by special legislation. The annual inspection for the 2018 financial year gave no grounds for comments.

3.3 International involvement

The Office of the Auditor General’s international involvement includes the development of public auditing, professional support for Supreme Audit Institutions in developing countries, joint audits and audits of international organisations. In 2019 we performed work corresponding to just over 16 full-time equivalents on international projects, compared to 15 full-time equivalents in 2018. As a percentage of total resources, this represents almost 4 per cent.

3.3.1 Development and collaboration on public auditing On an international basis, development work on public auditing is mainly through INTOSAI. They develop auditing standards and a common international framework for public auditing. Throughout 2019, the Office of the Auditor General chaired the Forum for INTOSAI Professional Pronouncements, which aims to ensure quality and consistency between the standards. We also chair the committee responsible for professional development in the field of performance audits, and are represented on several other expert committees.

The Nordic auditors general meet annually and have agreed to strengthen Nordic collaboration in order to ensure that the Supreme Audit Institutions are relevant, identify new risks and social trends and satisfactorily analyse complicated cross-sectoral contexts. In 2019, robotisation and the use of artificial intelligence in audits was a major topic.

We work with Supreme Audit Institutions which are at the forefront of the modernisation of public audits, through techniques such as data analysis, visualisation and automation. We also collaborate with other Supreme Audit Institutions to address the shared challenges involved in auditing the acquisition of F-35 fighter jets and the Joint Strike Fighter programme. We have also exchanged experiences on state control of the public transport sector in Scandinavia, which has resulted in suggestions for risk assessments and the choice of topics and methods for future audits of the sector.

In 2019, we worked alongside the Russian Supreme Audit Institution to perform a parallel audit on Norwegian- Russian environmental collaboration, Document 3:8 (2018–2019). We have also taken part in a cross-Nordic parallel audit on digitalisation and how to make it easier to start a company. The Norwegian investigation was published in Document 1 (2019–2020).

3.3.2 Professional support for Supreme Audit Institutions in developing countries Supreme Audit Institutions perform an important role in functioning democracies. The goal of our aid work is to increase the Supreme Audit Institutions’ impact on improving the administration of community resources, and to help combat corruption in developing countries.

The Office of the Auditor General has been responsible for the INTOSAI Development Initiative (IDI), which is a development body for Supreme Audit Institutions. The IDI helps to increase capacity in more than 140 Supreme Audit Institutions through a range of development programmes. Further information on the IDI can be found in Appendix 3.

In 2019 we provided professional support to AFROSAI-E9 and the Supreme Audit Institutions in Myanmar, Uganda, Zambia and Sierra Leone. We use our own staff on both short-term and long-term assignments.

9 The English language sub-group of the African Organisation of Supreme Audit Institutions.

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The extraction of minerals, oil and gas can generate huge revenues, but also brings with it a high risk of corruption in the sector. In regions with large petroleum and mineral deposits, better public audits can be of enormous significance. We have established a programme intended to ensure that there are systematic, knowledge-based and consistent audits of petroleum and mineral resources. We also support the INTOSAI international Working Group on the Audit of Extractive Industries (WGEI). In this context, we have assisted with the work of the Extractive Industries Transparency Initiative (EITI), which promotes transparency in the extraction sector. We have also played a key role in the development of AFROSAI-E’s first guidelines for audits of the extraction sector.

We have contributed to the performance of good and relevant audits of the extraction sector in Uganda, which provides inspiration for Supreme Audit Institutions in our other partnership countries. In Zambia we have supported the first compliance audit to be reported to the parliament. It showed serious flaws in the authorities’ system for awarding mining licences, and has helped towards the implementation of several measures by the President and Minister of Mines and Minerals Development. Our support for the Office of the Auditor General in Myanmar has contributed to the delivery of their first compliance audit to parliament, and to the establishment of a dedicated performance audit unit. Two performance audits have been carried out. In our support to Sierra Leone, we have assisted with audits of risk associated with the internal pricing and award of mining licences, and contributed to the establishment of a dedicated ICT audit unit.

The increased use of electronic tools and large, complex ICT systems in the public administration in developing countries has resulted in improved efficiency. However, it has also brought an increased risk and vulnerability to misuse and manipulation. Through AFROSAI-E, we have supported Supreme Audit Institutions in developing countries in the construction and implementation of a programme to improve skills in ICT audits in southern Africa. The first phase of the programme was implemented in 2019.

We reported NOK 15 million to the OECD in 2019. This is a composite of our development collaboration costs. The figure includes the direct costs of providing assistance and the payroll costs of the staff who are involved.

3.3.3 Auditing of international organisations We chair the EFTA Board of Auditors. We also sit on the audit boards of

 European Patent Office  European Space Agency  Organisation for Economic Co-operation and Development  EUROCONTROL

When we accept international audit assignments, we work to contribute to good administration and maximum transparency. We are the external auditor for the European Centre for Medium Range Weather Forecasts. We also perform audits on seven programmes as a control member of the EU’s Interreg programme, which aims to promote social and economic integration across national borders through regional cooperation.

3.4 Support functions and administration

Our administrative support functions deliver services to the entire organisation. They are organised into staff and support units which play a vital role in allowing us to perform our core duties effectively, and also ensure that we comply with the requirements for good administration. The functions attend to tasks such as running and developing our systems and delivering services within HR, payroll, finance, archiving, security, operations, communication, operations management and management support. In 2019, these functions performed work corresponding to 45 full-time equivalents.

Other administration and HSE-related activities corresponded to 38 full-time equivalents in 2019. These included administrative management, secretarial functions, welfare measures and participation on councils and committees for employers, employee representatives and safety representatives.

The percentage of combined resources used for support functions and administration has remained stable over time.

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4 Management and control of the organisation

4.1 The Office of the Auditor General’s quality assurance system

The Office of the Auditor General’s quality assurance system is based on international standards for quality control (ISSAI 140). The system covers leadership, ethics, skills, performance of tasks and monitoring of the organisation. The Office of the Auditor General’s governing documents must be easily accessible, and we maintain a strong focus on ensuring that we have

 Clear requirements and criteria for work  An overview of which factors affect our ability and opportunity to carry out the work in line with set requirements and criteria  Systematic processes for the planning, implementation, quality control and reporting of all auditing and controls  A systematic approach to monitoring, learning and improvement

We work on continuing to develop the quality assurance system. Key elements include guidelines for auditing and control work, code of conduct, responsibility and authority structures, risk management, management of portfolio of auditing and development tasks, auditing and support systems and organisational culture.

4.2 Periodic planning and follow-up

4.2.1 Strategic plan In 2018, the Board of Auditors General approved the strategic plan for the 2018–2024 period (Strategic Plan). The vision “Auditing to benefit the society of tomorrow” serves as a guide to our three main goals (described in Section 3) and other strategies.

4.2.2 Annual performance plan The strategic plan is operationalised through the annual performance plan, which is based around the organisation’s resources and framework. Within this framework, we set overall prioritisations for the auditing work, international work, development work and professional and administrative support.

The plan is based on analysis work performed to identify and prioritise new auditing tasks. Annual evaluations are also conducted to assess which are the most important risk areas internally within the Office of the Auditor General. These are used as a basis for prioritising which development measures are included in the modernisation programme (4.2.3) and which of the other measures and criteria will be included in the annual performance plan.

The annual performance plan is then translated into specific terms through departmental plans and management contracts.

In accordance with good governance practice, we evaluate our own results and goal achievement. We do this on the basis of a defined set of information sources which together are intended to enable the Office of the Auditor General’s management and board to assess whether the organisation’s results are satisfactory, or whether measures are necessary to improve goal achievement. These performance assessments are conducted annually and form the basis of the Office of the Auditor General’s annual evaluations of operational risk.

4.2.3 Development work – Modernisation programme Our development work includes audit-related development, system development, management development and organisational development. In 2019, we performed development work corresponding to 24 full-time equivalents, compared to 23 full-time equivalents in 2018.

The Office of the Auditor General has established a modernisation programme that aims to ensure that the development measures are managed systematically during the strategy period. The programme is an important instrument in helping to achieve the goals of the strategic plan. In that connection, development projects that focus on digitalisation and process optimisation are key. The main objective of the programme is to help ensure that the gains from current and future development projects are realised, which is then expected to contribute to achieving

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our strategic goals. Around half of our development resources were used for projects in the modernisation programme.

Several of the development measures in the modernisation programme ended in the first half of 2019. The responsibility for follow-up was transferred to relevant parts of the line organisation. This includes the deliveries from the project intended to improve the work of identifying risk areas in operations.

In order to attain the strategic goals, it is vital for us to have good oversight and expertise in the various operational areas and sectors. This is achieved through sector supervision. We must also have a good process for evaluating and prioritising new proposals for audits.

Based on the project work, from 2020 we are introducing a new model for sector supervision and the choice of topics for audit. The model is dynamic in that the entire portfolio of audit and development tasks is evaluated systematically several times a year. This means that proposals for audit topics can be put forward more often throughout the planning year.

This change has been made in order to ensure that we achieve our strategic goal of delivering current and relevant audits. Introducing this new model is intended to make our internal use of resources more effective through faster case processing. The resources that have been freed up will be used to develop new audit topics.

The modernisation programme has six key development measures. Thematically, these are divided into the following focus areas for development work in the Office of the Auditor General: social mission, organisation and management, infrastructure and technology, professional expertise and communication. They are prioritised because individually and in combination they form key prerequisites for developing the Office of the Auditor General in accordance with the strategic plan.

The ongoing development measures in the modernisation programme:

Reporting of an audit The purpose is to help streamline the production process for the annual Document 1 and improve the communication of the auditing results in the document. The goal is for the Storting, public administration and other relevant parties to want to use the document to a greater degree than at present. The project will mainly help to improve the way auditing results are communicated.

Digitalisation of reports The purpose is to develop our reports in a digital format that is better communicated across the target groups. The solutions developed will be used for all our reports. Development and implementation will be ongoing for several years. From 2020 we will only publish our reports digitally. The project will mainly help to improve the way auditing results are communicated.

Streamlining financial audits of organisations that are clients of the DFØ The purpose is to streamline and help improve the quality of the financial audits of state organisations that are clients of the Norwegian Agency for Public and Financial Management (DFØ). This concerns approximately 150 organisations involved in accounting and approximately 170 organisations involved in payroll. In practice, we achieve this by performing audit activities on the DFØ that cover all their clients, obtaining more data and making more analyses during the audit. The project aims to strengthen the focus area of professional expertise.

Programme for information management The programme will contain measures that enable us to build a new foundation for information management in the Office of the Auditor General. This will affect all our work processes. The information management programme coordinates the implementation and follow-up of measures that have a related purpose and that are clearly dependent on each other. In 2020, we documented three new development measures of this type. One of these involves testing and implementing new technology aimed at improving security in the exchange of data with audited organisations. We will also develop a strategy for the future use of cloud services to process and store data, and set up a preliminary project whereby we will study opportunities for automating parts of the financial audit. The measures in the programme will help to strengthen most of our strategic focus areas.

Handling classified information A project has been set up to evaluate alternative technical and building infrastructure solutions that will allow the Office of the Auditor General to continue to satisfy the need to handle classified information in accordance with the

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requirements of the Security Act and Corporate Security Regulations. The purpose is also to streamline the performance of audits in which we handle classified information. The project will mainly help to strengthen the focus area of infrastructure and technology. Better communication between the Office of the Auditor General’s head office in Oslo and its regional offices A project has been set up to optimise the use of video-conference equipment to ensure effective and seamless communication between our geographic locations. From now on, this technology will be used to a greater degree for communication with the organisations we audit and with other external parties. This is expected to result in reduced travel activity and lower travel costs. The project will mainly help to strengthen the focus area of infrastructure and technology.

4.3 Operational management

Operational management is particularly focused on ensuring sound implementation and good ongoing prioritisation. Operational management is achieved mainly through systems for portfolio management that provide a collective basis upon which to evaluate whether there is appropriate progress, staffing levels and implementation of risk management for the tasks. Evaluations also look at whether the overall available resources are being prioritised appropriately.

The Office of the Auditor General uses an electronic management information system to allocate and report the use of resources on both auditing and administrative tasks on an annual basis. Previous figures from this system also provide a basis for more accurate resource estimates for the planning of similar tasks in the future.

Furthermore, operational management aims to ensure that, in our ongoing work, we manage resources and tasks in a sound and prudent manner and comply with the relevant laws and regulations.

4.4 Expertise, working environment and equality

The Office of the Auditor General is an organisation of skilled experts, in which our employees are our most important resource. One of our priorities is ensuring that staff are able to participate in a range of skills development measures. Grant funding is made available and leave is granted for employees to participate in full- time or part-time studies that are relevant to ensuring that the Office of the Auditor General’s staff are qualified in line with future needs. Staff also attend a range of courses as part of their skills development. In 2019, we devoted a total of 23 full-time equivalents to such skills development measures, compared to 21 full-time equivalents in 2018.

A good working environment is one of our priorities, and we ensure that employee representatives and safety representatives are able to attend to their duties satisfactorily. This contributes to improving processes and providing a better decision-making basis.

The civil service organisations and employers meet regularly on the Information, Discussion and Negotiation Committee, where we discuss issues in accordance with the Basic Agreement and Basic Collective Agreement within the state. We consider that cooperation with the staff and their organisations has been extremely good.

We have an active Working Environment Committee that helps to ensure that the Office of the Auditor General will have a good working environment. The local safety representatives safeguard the interests of employees on issues concerning the working environment in each department.

Our life phase policy is part of our HR policy and is based on state employer guidelines and the objectives in the central agreement concerning an inclusive workplace. The Office of the Auditor General aims to be an attractive workplace for employees in all phases of their professional career, and we make every effort to ensure that more people can remain at work longer. The life phase policy focuses on individually tailored measures adapted to suit each person’s circumstances or life phase, and targets employees’ opportunities rather than their limitations. We accommodate the needs of members of staff requiring physical adaptation of the workplace.

The Office of the Auditor General wants to be a diverse organisation. We have an online application tool that gives applicants with an immigrant background or disability the opportunity to request a special assessment of their application. We have good experiences of taking on apprentices. In 2019 an apprentice became a permanent employee after completing their course of education. We would like to continue the apprenticeship scheme.

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In 2019, sickness leave represented 4.5 per cent of the total amount of full-time equivalents. In 2018, sickness leave represented 4.8 per cent. Management, the HR division, the working environment committee, the safety representatives and the company health service are important players in the follow-up of sickness leave and the work on prevention and facilitation within the area of Health, Safety and Environment (HSE).

The use of overtime has also been the subject of particular attention in 2019. During the first six months, the Norwegian Labour Inspection Authority performed an inspection during which, among other things, they checked compliance with the working hours provisions in the Working Environment Act. The Authority discovered breaches of some of the provisions. We are working systematically to improve internal control, enhance training and develop better systems to support and ensure compliance with the provisions of the Act.

Pursuant to the Working Environment Act, we have guidelines for reporting censurable matters. The guidelines were reviewed in 2019.

A total of 60 per cent of the employees in the Office of the Auditor General are women. In the middle management category, the target of at least 40 per cent representation of both genders has been satisfied, while less than 40 per cent in the senior management category are women. In the other position categories, the percentage of men is less than 40 per cent.

Gender percentage in the various position categories

Position category

(Position codes taken from the Women (%) Men (%) government’s pay level booklet)

Senior managers: 9146 – Director General 37.5 62.5 9208 – Secretary General Middle managers: 46.2 53.8 1218 – Deputy Director General Senior case processing positions: 1217 – Assistant Director 1220 – Special Adviser 60.2 39.8 1364 – Senior Adviser 1515 – Senior Librarian Other case processing positions: 1363 – Senior Consultant 68.5 31.5 1408 – Higher Executive Officer 1436 – Adviser Other position: 1065 – Consultant 1130 – Cleaner 62.5 37.5 1136 – Operating technician 1203 – Skilled worker with trade certification

There are no gender-based wage differences between men and women in the Office of the Auditor General.

At senior management level (Director General), the average pay for women is marginally lower than for men, but at the middle management level (Deputy Director General), women earn marginally more than men.

In senior case processing positions, the wage difference between women and men is less than one per cent across all position codes, with the exception of Special Adviser. For other case processing positions, the wage difference is between one and two per cent within each position code. For some position codes, there are too few employees for a relevant comparison, or there are only women or only men in the position.

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All our positions are advertised as full-time positions, but we facilitate part-time work when a member of staff so requires. As of 1 December 2019, 37 staff were on partial leave or were working reduced hours. Of these, 35 were women. There were also five women and one man taking parental leave as of 1 December 2019.

4.5 Sustainability

The Office of the Auditor General is working to ensure that it has the minimum negative impact on the natural environment. This is applicable in areas such as energy consumption, procurement, waste management and travel.

The head office in Oslo has environmental certification of “very good” in accordance with the BREEAM NOR standard. The building is in energy class A and has systems that regulate heating and ventilation 24 hours a day, and that turn off lights in rooms where there is no activity. We use energy-efficient IT equipment labelled as energy- saving.

In all our procurements, we assess whether it is relevant to stipulate environmental requirements. For example, office furniture that we purchase has been manufactured in an environmentally friendly way, and stationery bears the Nordic Swan label. Our canteen in Oslo provides locally produced food, 15 per cent organic fruit and vegetables, and certified fish.

We separate cardboard and paper, plastic and organic waste for recycling, and electrical and hazardous waste for safe disposal. In recent years, we have significantly reduced our consumption of paper. In 2019, we digitalised the processing of travel claims, and we further reduced the number of printed audit reports. From 2020 onward, these reports will only be published digitally.

In 2019, we improved the communication systems between our head office, regional offices and external parties in order to make more efficient use of time and ensure more seamless communication. We are working on further improvements, and one of our aims is to reduce travel activity. However, audits of organisations all over the country, combined with our own regional presence, make a certain amount of travel necessary.

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5 Future outlook

The Office of the Auditor General has been the Storting’s audit and regulatory body since 1816. Our mandate, authority and independence are secured through the Constitution, the Office of the Auditor General Act and the 2004 Instructions relating to the activities of the Office of the Auditor General.

We have

 Access to audit and control the administration  Independence in choosing which cases we audit, and how the audit will be performed  Unique access to information and the authority to demand all the information and documents we need from those we are investigating

The Storting and general public show us a high degree of trust. This provides a solid foundation on which to achieve our social mission, but also gives us considerable responsibility for delivering the audits and controls that will benefit the society of tomorrow. Our investigations are intended to give the Storting a good basis from which to supervise the government, to help to ensure a better administration, and give the general public insight into how elected representatives are supervised and how public money is administered. It is not in itself an objective to find errors, but to contribute to enhanced administration. One of the ways we achieve this is through guidance.

The broader community also has expectations of us. Society is facing major change. Tighter budgets and new technology require adaptation and efficiency measures. The Office of the Auditor General also has to adapt, so that in the future it will be able to deliver in line with its social mission. That is why we maintain a high level in our development activities, in which automation and digitalisation play a key role.

The Office of the Auditor General must meet these expectations by continuing to deliver current and relevant audits in response to the task set for us by society. This requires considerable insight into development trends in society. Using new technology will enable us to process and use information from a range of sources more effectively than at present. This could achieve more transparency and give the Storting and the general public better insight into complex problems and contexts in society.

The topics that the Office of the Auditor General chooses to investigate must be important and relevant if they are to enable the Storting to perform its democratic supervisory function. The matters must be of material social significance and not contribute to increased micromanagement. It is for this reason that we continuously improve our internal processes for the selection of relevant audit topics.

Our talented staff are proud of their workplace and invest significant effort in fulfilling our social mission. As a knowledge-based organisation, the Office of the Auditor General depends on having staff with a high level of relevant skills in order to meet the challenges of tomorrow. Change and transition mean that we need new skills. We continue to invest in skills improvement measures for our staff, as well as recruiting new expertise. We also use a range of instruments to ensure that the Office of the Auditor General continues to be a preferred employer.

We believe that we have the necessary prerequisites to meet the expectations of both the Storting and the general public. The Office of the Auditor General intends to continue delivering current and relevant audits, while also making essential adaptations. Overall, these are important contributions towards achieving our vision: Auditing to benefit the society of tomorrow.

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6 Budget and accounting 2019

The Office of the Auditor General's accounting is audited by PwC, which is appointed by the Presidium of the Storting. We received a clean report from the auditor for the accounting for 2019. The accounting, with notes and audit report, has been submitted to the Presidium of the Storting.

Budget and cash accounts for 2019 (in NOK 1000s)

Section Item Accounting 2018 Budget 2019 Accounting 2019 0051 Office of the Auditor General 01 Operating revenues 515,782 561,331 558,631 Grants, international 75 25,800 26,200 26,200 org. and networks Total expensed 541,582 587,531 584,831

3051 Office of the Auditor General 01 Refunds 1948 2000 1948 02 Refunds, international 850 300 976 Total recognised as 2798 2300 2924 income

In 2019, the Office of the Auditor General spent NOK 558.6 million performing its tasks. Of this amount, personnel and payroll costs represent around NOK 424.5 million (about 76 per cent).

The DFØ has developed a formula for calculating full-time equivalent hours worked, in order to compare state organisations in terms of resources used. The trend in full-time equivalent hours worked in the Office of the Auditor General in the 2014–2019 period: 2014 2015 2016 2017 2018 2019 453 445 436 423 412 420

Since 2014, we have seen a steady decrease in full-time equivalent hours worked. The increase from 2018 to 2019 was expected, since staff were appointed to positions that had been vacant for some time. The increase has been allocated to audits, international involvement, skills development and development tasks.

6.1 Managerial salaries

The salary of the Chairman of the Board of Auditors General is determined by the Storting and amounts to NOK 1,580,010. The salaries of the Secretary General and Directors General are in line with the government’s executive salary system. The system is intended to promote goal achievement, boost results and completion rates and facilitate good leadership.

The Office of the Auditor General uses the system’s salary band E for the Secretary General, which covers the salary range NOK 1.2 million to NOK 2 million. In 2019, the annual salary of the Secretary General was NOK 1,761,087.

With regard to the Directors General, the Office of the Auditor General uses salary band C, which covers the range NOK 1 million to NOK 1.6 million. The annual salary of the Directors General in 2019 was in the range of NOK 1,412,000 to NOK 1,479,932. The average salary was NOK 1,445,571.

6.2 Underspend

The central government accounts expenditure page for Section 0051 shows an underspend of NOK 2.7 million in 2019. The main reason was because payroll costs were lower than budgeted. We have applied for the underspend to be transferred to 2020. The funds will be used to cover the costs of several development projects.

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Appendix 1: Management commentary to annual accounts for 2019

Appendix 2: Annual accounts 2019

Appendix 3: Auditor’s report

Appendix 4: Briefing on the INTOSAI Development Initiative (IDI)

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