Presentation by Kjell Larsson from Sweden on risk mapping during the workshop on The role of the Court of Accounts in preventing and fighting fraud and corruption. This workshop was jointly organised by SIGMA and the Algerian Court of Accounts in Algiers 8-9 April 2015. Further information, please contact bianca.breteche@oecd.org.

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
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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.
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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)
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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)
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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)
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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)
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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.
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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.
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