Loan agreement violates the Constitution – NSM and the Ministry of Justice receive criticism from the National Audit Office

– This is a very special case. The National Audit Office has never come across anything like this, says Auditor General Karl Eirik Schjøtt-Pedersen.

In addition to the fact that the National Security Authority (NSM) went far beyond its powers, the Ministry of Justice and Emergency Preparedness failed to follow up the situation in the NSM well enough, he adds.

– Both parts are worthy of criticism, states the National Audit Office.

Was informed a year and a half later

In December last year, it became known that NSM had taken out an illegal private loan in connection with renting a new building at Fornebu in Bærum.

On 11 December, a year and a half following the loan was entered into, the National Audit Office was formally informed of the case by the Ministry of Justice and Emergency Preparedness.

– The ministry had then known regarding the loan for over a month, says Schjøtt-Pedersen.

The National Audit Office approved NSM’s budget in spring 2023, but had then been told that the move should be covered within the ordinary budget. Information regarding the loan also did not appear in the governance dialogue between the ministry and NSM.

– NSM never informed us that they had entered into a loan agreement, despite the fact that they are obliged to inform the auditor regarding matters that are significant for the accounts, says Schjøtt-Pedersen.

Violates the Constitution

The National Audit Office concludes that it is objectionable that NSM entered into an illegal loan agreement to finance a future need for premises.

– It violates both the Constitution and the appropriations regulations, states the National Audit Office.

In addition, the Ministry of Justice and Emergency Preparedness is criticized for not following up NSM’s move and the loan agreement to a sufficient extent.

– I would like to emphasize that the ministry also has a responsibility in this matter. They have not followed up NSM well enough. When an underlying business is in a demanding financial situation, the ministry must get involved. And they must inform the National Audit Office regarding matters that are important to our mission, emphasizes Schjøtt-Pedersen.

Public agencies are not allowed to take out loans, and operations must be financed with appropriations from the Storting. Only the Storting can decide that the state should take out loans, according to the Constitution.

NSM director Sofie Nystrøm resigned the same day the agreement was announced.

The ministry agrees

The Ministry of Justice and Emergency Preparedness writes to NTB that they note that the National Audit Office’s assessments correspond with Justice Minister Emilie Enger Mehl’s (Sp) account of the case.

The ministry is now in the process of following up on the recommendations from the Gjedrem committee rapport which among other things recommends an external review of the NSM.

– Monthly agency management meetings are held with NSM on the development of internal control and financial management. The National Audit Office receives minutes from these meetings on an ongoing basis, writes the ministry.

Furthermore, the Ministry of Justice points out that they agree with the National Audit Office that NSM will benefit significantly from adopting the standards for accrual business accounts in the state (SRS).

– This work will be started by the turn of the year 2024/2025 at the latest with the aim of introducing SRS as quickly as possible.

– Deserved criticism

Leader Peter Frølich (H) in the Storting’s control and constitution committee believes the criticism in the NSM case is deserved.

– The Conservative Party believes this deserves criticism from the National Audit Office. The Ministry of Justice and Emergency Management has not had good enough control over NSM, he says.

– We expect the Minister of Justice to take the criticism to heart and follow up on the National Audit Office’s conclusions, continues Frølich.

Rødt’s Seher Aydar, who also sits on the control committee, thinks the same.

– Once once more, it is emphasized how serious this matter is, and how extremely important it is that ministries follow up their underlying agencies and especially the secret services. The Ministry of Justice and Emergency Preparedness also has a responsibility in this case, because they have not done their job, says Aydar.

Venstre also believes that the criticism is justified.

– It amazes me that Mehl has not kept her hand firmly on the steering wheel here, and I am excited to see how she explains that the ministry did not follow up, says Storting representative Ingvild Wetrhus Thorsvik.

In the reply letter to the National Audit Office, Mehl writes that she will follow up on their recommendations.