Risk mapping - Practical example in 5 steps, Kjell Larsson, Algiers 8-9 April 2015
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The document outlines a five-step approach utilized by a court of accounts to prevent and combat fraud and corruption within government sectors. It emphasizes the importance of transparency, informed audit strategy, and systematic risk mapping while detailing the process of selecting auditees and reporting findings. Conclusions highlight weaknesses in current protections against fraud, unclear government regulations, and the necessity for ongoing oversight and refinement of the approach.
Risk mapping - Practical example in 5 steps, Kjell Larsson, Algiers 8-9 April 2015
- 1. © OECD AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU The role of the Court of Accounts in preventing and fighting fraud and corruption Risk mapping - Practical example in 5 steps Kjell Larsson, Sweden Algiers, 8-9 April 2015
- 2. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU 1 A risk map in 5 steps - Outline • Brief background (more tomorrow) • The 5 steps • Pluses and minuses of the approach
- 3. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Background in short • Why at all focus fraud and corruption? - From NO! to YES please, urgently! • Our audit strategy - Get maximum value out of our resources. Quickly! - Prevention or detection? A mix! - Avoid for now the most difficult audit areas! - Help auditees to do better! - Be extremely transparent. - Make good examples known. 2
- 4. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Step 1. Sum up what is known about fraud and corruption in Gvt. sector • How? Sum up information from all known sources the last 5 years! All public sector - SAI findings - Court cases and prosecutor “non-cases” - Media reporting last 5 years - Typical patterns according to international organisations (TI, OLAF, BKA, SFO etc.) - Interviews with former ministers, head of agencies, economic crime bureau, researches, accountants. (2 months) 3
- 5. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Step 2. Build selection-criteria from what is typical • How? Analyses by management and audit team • Conclusion. Criteria to be used to select auditees A) Entities 10+ milj € and only link between business and customers (eg Pharmacies, Alcohol monopoly) B) Procuring goods or services. 50+ milj Eur. dominating customer. Decentralised (eg Railway). C) Issuing permits of very high value for businesses (eg Phamaceuticals, Energy). D) Issuing permits of very high value for persons (eg insurances, building, citizenship, licenses) (3weeks) 4
- 6. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Step 3. Identify entities meeting at least one criteria • 20 entities found out of about 300. - examples of entities Police, International Development Agency, Agency for development and procurement of weapon systems, Health care insurance, Pharmacies, Agency permitting sales of medical substances, Lottery inspection, Railway, Road construction, Postal service, Telecommunication permits, Training of unemployed, Labour-market Agency. (1week) 5
- 7. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Step 4. Select and inform auditees • Restrictions. - A) Audits finalised and reported in one years time - B) Selection to provide conclusions at auditee as well as government level - C) Extra efforts to disseminate results and assist auditees to be done within the year. • Final selection. 3 performance audits + 10 of the financial audits strengthened on internal control + interviews on protection aspects with top management in 5 additional entities. (2 weeks) 6
- 8. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Step 5. Reporting conclusions, • Public summary report to Parliament. Individual public reports to auditees. • Conclusion; protection against fraud and corruption is too weak in most audited entities. However, top management finds it to be good. • Conclusion; Government regulations and instructions on responsibility of management in entities and ministries are unclear or lacking. • Coverage by most media. Many interviews • Most auditees (and interviewees) asks SAI for help to take actions. • Parliament asks Government to take action. 7
- 9. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Pluses and minuses • Approach raising considerable awareness and actions taken. However, for how long? Needs probably regular follow-up by the SAI • Cost effective. However, will the way to identify risks give to much focus on rather trivial but not the most essential f/c problems? • Overall conclusion. An effective way to kick- start but the approach must be refined and tested more. THANK YOU FOR YOUR ATTENTION. 8