Swedish National Audit Office (RiR)
1 Costs allocated with different keys
Lower comparability of data

Overheads at central municipal level have increased faster than other municipal costs. Overheads also arise in municipal specialist administrations but are not visible in RS and their size is therefore unknown. Regardless of whether overheads arise at central or specialist administration level, they must be allocated to the activities. This can be done either with the allocation key offered by SCB (the SCB-key) or with allocation keys designed by the municipalities themselves.

SCB does not offer any allocation key to allocate overheads at specialist administration level, which means that the municipalities must design their own allocation policy at this level. The Swedish NAO considers that this creates a risk of unwarranted differences in the accounts. It also means that the municipalities have an unnecessarily heavy accounting burden.

The Swedish NAO considers that overheads at specialist administration level should be separately disclosed and allocated using a national allocation key that reflects the design of the SCB-key.

2 Opting out of standard taxonomy
Need of more targeted control

Central government has created an equalisation system for municipal costs associated with LSS. The equalisation system means that municipalities with lower costs associated with the Act partly compensate municipalities with higher costs. A municipality may, intentionally or unintentionally, influence its outcomes in this equalisation through allocation of overheads in the RS.

There is a risk that municipalities will report unreasonably high overheads for their obligations under the Act LSS with a view to achieving a better outcome in the equalisation. As long as municipalities can opt out of the SCB-key, the Swedish NAO considers that SCB can take certain measures to reduce this risk. However, if all municipalities use the SCB-key the need for such measures will decrease.

Since overheads at specialist administration levels are not visible in the RS it is difficult for SCB to follow up how they are allocated. If the overheads at administration level are made visible and allocated using a national SCB-key, the possibility of intentional or unintentional incorrect reporting of these overheads will be eliminated. If this does not happen, the Swedish NAO emphasise that more targeted control of overheads at administration level must be considered. In that case, the Government should work to ensure that the municipalities’ auditors are given a more active role in reviewing the submission of data to the RS.

3 Insufficiently flexible norm
Reduced ability to compare various entities

It is in the interest of both central and local government to be able to compare cost efficiency between services performed by the municipality itself and other providers. However, municipalities cannot report overheads so that it is clear what type of provider has given rise to them without going against some part of SCB’s norm. SCB should consider a change in the forms that enables such disclosure.


Every year, every Swedish municipality downloads a large Excel form from Statistics Sweden's (SCB) website. This data is called the Annual Municipal Accounts (RS) and constitutes the State's most important source of information about the financial situation and development of the municipalities.

The role of RS has gradually evolved from mainly forming a basis for the national accounts and related product, to also providing the financial components of key figures for municipal comparisons. If the data is to serve this purpose, the policies for reporting to RS must be fair even if the municipalities are differently organised. Accounting for common costs may constitute a considerable source of error when comparing municipalities.


The purpose of the audit is to investigate whether central government has created the conditions for municipalities to account for overheads [i.e. costs required to run a business, but which cannot be directly attributed to any specific business activity, product, or service] so that RS forms a reliable basis for comparison of municipalities.

The audit focuses on three areas:

1. Municipalities' general framework for allocating overheads,

2. Municipalities' framework for accounting for overheads for measures regulated by the Act concerning Support and Service for Persons with Certain Functional Impairments (1993:387), referred to below as LSS, and

3. Municipalities' framework for allocating overheads so that comparisons between municipalities are reliable, regardless of how the activities are allocated between public and private providers.

The items above were selected and named by the e-Government Subgroup of the EUROSAI IT Working Group on the basis of publicly available report of the author Supreme Audit Institutions (SAI). In the same way, the Subgroup prepared the analytical assumptions and headings. All readers are encouraged to consult the original texts by the author SAIs (linked).