1 Incomplete risk analysis
Problems unnoticed by financial audit
The audit shows that the Swedish Transport Administration has not carried out a risk analysis specifically for research and innovation activities or made regular follow ups in compliance with the requirements of the Ordinance on Internal Control (2007:603). The agency’s internal regulations on risk management are not applied in the research and innovation activities. The Swedish NAO wishes at the same time to emphasise that the financial audit has regularly made the assessment that the Swedish Transport Administration’s overall internal control process is satisfactory and that the requirements of the Ordinance on Internal Control are met.
2 Lack of clear guidance on risks processing
Risk: incoherent processing
The audit shows that there is an overall process for the preparation and decision-making on research and innovation support. A procedure for portfolio management describes the process and how the procedures for processing research and innovation support should be designed. Information about projects on which decisions about support are based is gathered in a project specification. The Swedish NAO’s audit shows, However, that policy documents are weak as regards assessment and follow-up of financial administration procedures for processing individual research and innovation projects, such as assessment of budget and cost levels. The policy documents are not considered to regulate sufficiently clearly how risks should be assessed and managed. The lack of clear guidelines increases the risk that the processing will be inconsistent and that important aspects will not be taken into account.
3 Lack of documented assessment
Incompliance with agreed conditions
Apart from risk analysis and established processing procedures the Swedish NAO has audited decision support data, agreements and follow-ups for a sample of research projects that have received research and innovation support from the Swedish Transport Administration. The sample refers to 15 projects started and 15 projects completed since 1 January 2017. The audit shows that there are several deficiencies in how the projects have been dealt with. These mainly refer to the follow-up of whether grants paid out comply with agreed conditions. All 15 completed projects audited lack any documented assessment of compliance with conditions for research and innovation support and no final financial reports have been submitted by the projects concerned. Despite this the Swedish Transport Administration has made final payments to the projects. In addition, in most of the audited projects, invoicing has been carried out in accordance with a payment plan and not on the basis of accrued expenses. In other words, there is no documented material for accrued expenses in the majority of the research projects audited.
The Swedish NAO has also highlighted two projects where it may be questioned whether the support is compatible with the conditions of the Swedish Transport Administration’s research appropriation, since the projects have in part had other purposes than research and innovation.
Background
One of the responsibilities of the Swedish Transport Administration is for research and innovation in the field of transport.
The agency has about SEK 520 million at its disposal annually for this purpose.
In autumn 2017 the Swedish NAO's annual audit drew attention to deficiencies in a specific project that had received research grants after consultation between the Swedish Transport Administration and the Swedish Maritime Administration.
In all the Swedish Maritime Administration paid out SEK 44 million to the project in 2013-2016.
Objectives
The purpose of the audit was to examine the Swedish Transport Administration's risk assessments and established procedures for processing research grants. The audit focuses on research and innovation support from the perspective of financial administration and does not address the benefit of the research that has received support.