To ensure that the funding made available by Iceland, Liechtenstein and Norway delivers value for money and contributes to relevant outcomes, it is crucial to strike the right balance between risk taking and application of control measures.
Achieving results, avoiding the pitfalls
Results, transparency and accountability are vital aspects of the grant schemes. With a large number of programmes and numerous institutions involved, the structure of the grant schemes is complex, challenging and vulnerable to many types of risk.
Together with results-based management, effective identification and handling of risks is therefore a cornerstone to ensuring maximum impact of the funding from the EEA and Norway Grants. Risk management is given due attention in the planning, decision and implementation stages of the grant cycle. It is a great advantage that the grant schemes can benefit from substantial experience gained through the participation of competent partners in the donor and beneficiary countries.
A mid-term review of the EEA and Norway Grants pointed to the comprehensive control schemes in place. However, the report recommended that risk assessments take into account the wide differences between the individual beneficiary countries, both in terms of the degree and type of risk.
In its review of the donor side administration of the Grants, Statskonsult (The Norwegian Directorate for Communication and Public Management) found that although comprehensive measures had been taken to reduce the risk of corruption and fraud, these had used up considerable administrative resources.
Cooperation with Transparency International
To help improve risk management, in 2011 the EEA and Norway Grants entered into a partnership with Transparency International. Transparency International (TI) is a global civil society organisation that promotes transparency and fights corruption. The cooperation draws in particular on TI’s country-specific expertise to assess corruption and fraud risks. TI has designed a Corruption Risk Assessment Tool to identify and assess risks for every programme receiving support through the Grants. The agreement also supports TI’s work in carrying out assessments of the National Integrity Systems in 25 European Countries.
This cooperation with Transparency International enables the donor countries to concentrate their resources for follow-up and control on areas where the risks are greatest. The analyses also make the beneficiary countries more aware of the strengths and weaknesses of their institutions.
National Focal Points and Programme Operators are working hard to identify and mitigate corruption risk. Together with Transparency International, an overview of risk mitigation measures has been developed, for use at national, programme or project level.
Pursuing a dynamic risk strategy
Iceland, Liechtenstein and Norway have developed a risk management strategy for the grant schemes based on advice from an international firm of auditors (Ernst & Young). This aims to make sure that risks are continually assessed in each country and for every programme. A number of measures to mitigate the risks and to minimise the effect of abuse are set out. The implementation of the strategy will be approached as a learning process with guidelines continuously being refined.
Since 2011 annual seminars on risk management have been organised for the donor states and beneficiary state institutions involved in the management of the grants.
Zero-tolerance for corruption
Iceland, Liechtenstein and Norway operate a zero-tolerance policy towards corruption, fraud and other mismanagement of funds in the EEA and Norway Grants.
Whilst mismanagement of funds may be related to deliberate corrupt or criminal behaviour, shortcomings in the planning of programmes and implementation mechanisms may create undesirable consequences as well. Emphasis is therefore given to robust organisation, active mismanagement and adherence to rules and regulations. The implementation involves numerous actors with wide experience and insight in the use of public funds, including the audit and control entities in the beneficiary states and the European Commission. In addition, since 2011 Transparency International has provided professional advice on how to manage corruption risks in several ways.
As part of our commitment to transparency and openness, we also make available key documents on the web, including case lists where irregular use of the funding has been identified, and of the remedial actions taken.