4.4 Year 1: Building the new authority (2003/2004)

4.4.2 Negative media

RiR had considerable negative publicity in the media during its first year. It first concerned expensive dismissals of competent personnel, then limping accounting routines and expenditure in general during this phase. RIR employees became angry with the 3AG for being unable to avoid this type of criticism, and unable to respond to it in a professional, decisive way, as they saw it. The 3AG, not knowing this, assumed that personnel felt guilty for not living up to expectations, and tried to comfort them in meetings, saying that they should not be take it personally and explaining that they did a great job. Personnel were surprised by this, because they had assumed that the 3AG felt guilty - the blame was “obviously” on them, they argued.

The fact that no manager had been recruited from PA continued to be highlighted in the media. On the day of the merger, a headline in a newspaper (Svenska Dagbladet, 1 July 2003) said “Big fight at the new RiR”, referring to this. It was mentioned in the article that Rachel and

Luke knew each other since before, and in this context the journalist asked Luke if RRV had been favoured over PA. “It was managers at PA who audited and criticized the generous deals at RRV. Has this had any influence?”, asked the journalist. Luke certified that managerial recruitments had been handled in a strictly professional process.

In an article in a major Swedish newspaper (Dagens Nyheter, 3 July, 2003), the recruitment of managers to RiR was highlighted again.

There was a lack of experience from auditing the Government, among the new RiR managers, it was argued – an experience that managers from PA would have had. A member of the independent board also expressed criticism of the lack of auditing experience among the 3AG.

Furthermore, this article reported on liaisons between some RiR managers and the Government. For an authority whose independence was perceived as key, this was hardly appropriate. Members of the RiR board issued this criticism, according to the article, but auditors had also reacted strongly in this matter, arguing that it was embarrassing and wrong. The article also reported on connections between one of the 3AG and the Government office;46

One of the three Auditor-Generals, Sophie, was recruited directly from the Ministry of Finance, where she was a Budget Manager. She has now recruited and taken with her the Assistant Undersecretary NN from the same budget department. As new manager of performance audit, NN will audit the Government office and her former colleagues.

But her new department shall also audit her common-law spouse, who has become the new Budget Manager, after Sophie.

An Auditor-General (Sophie, 20 November, 2003) explained that she was happy with the recruitment of managers, despite of the debate in the media.

In the article, it was mentioned that Luke had taken assignments from the Government office during the past years. For a decade, until the elections in 2006, there had been a left-wing Government in Sweden led by the Social Democrats. During the years from when RiR was formed, there were auditors who argued that the 3AG shared the same political preference. These speculations increased after the general

46Sophie’s real name has been replaced with her code name in this quotation, and the manager’s name with NN.

election, but they were only expressed anonymously, in interviews, never out-loud.

In a television news broadcast (Aktuellt) in Swedish Television on 8 October, 2003, the costs of dismissals following the merger, were highlighted. “Dubious agreements at RiR”, was the title.

The new RiR, that is responsible for the audit of state affairs, is now accused of themselves having drawn up dubious agreements with people who have been given notice by the authority. These people will cost the state more than SEK 20 million during the years to come – although these people were no longer working.

It was explained in the broadcast that those who had been given notice had been paid their salaries for up to 20 months in severance packages, and that some of them would thereafter be transferred to a retirement programme (Swedish: avtalspension). However, as concerned for example Rose, she explained in an interview that she had had more than four years with full salary, after which she would retire.

Auditors explained that at the same time as they were embarrassed over the negative media attention, they felt that it “served the 3AG right” to be criticized.

Resistance increased rapidly, but the 3AG claimed that it was mainly a small group of individuals who were dissatisfied. In the newspaper Dagens Nyheter, on 5 November, 2003, RiR was described as “almost paralyzed by internal fights”. It was highlighted that RiR had not yet issued a single (performance audit) report (but this soon changed);

The work has been paralyzed by, among other things, widespread discontent among personnel concerning both the physical and social-psychological work environment.

According to the article, personnel were also critical since it felt completely disregarded by management, as it was “not allowed to participate in the establishment of operations”. Auditor-General Sophie (20 November, 2003) explained that she became angry when she read this article;

I do not recognize it at all, I was pissed off when I saw it, when you think about how hard people struggle, how loyal personnel are and so

on. So I do not at all recognize that things should be paralyzed and characterized by internal fights. I do not know if you have seen anything like that. Of course this is an organization where people discuss, analyze, criticize, have opinions, this is what we want it to be, we want this to be an organization where people have opinions. [...]

Then there can be single individuals who think that ‘yes, there are internal struggles and they seem to disagree with them’ and so on, but this is not characteristic for how we experience the organization, it is not anything that I have heard.

On 6 November, 2003, a headline in Dagens Nyheter (DN) said

“Eight managers were bought out by RiR” (Swedish: Åtta chefer köptes ut från Riksrevisionen). It was explained that RiR had paid 15 million SEK to be rid of some former managers. The article continued:

Criticism of the new authority RiR now comes from more directions.

The work is described as paralyzed by internal struggles and discontent.

Critics argue that operations are ticking over. Furthermore, new information reveals that the authority, that should make sure that other state authorities and departments do not waste our tax money, itself does not practice what it preaches. Only since the start the three Auditors-General have authorized generous compensation for eight managers, fully fit for work, to leave. In total 20 people have been given notice with costly redundancy payments as a consequence.

In the article, it is stated that all of the RRV managers who were appointed to managerial positions with RiR, had a general 15 per cent rise in salary when they started at RiR.

In the spring of 2004, RiR continued to have bad publicity. In a news broadcast (Aktuellt, April 6, 2004), it was described how RiR had violated legislation on representation in their book-keeping. It was reported that the authority had spent 1.7 million SEK on representation only for the first six months, equal to SEK 5 800 per employee. Apart from this, several employees have “let the state pay also for family members to participate in representation abroad” (Svenska Dagbladet, 7 April, 2004). RiR issued a press release, saying that the internal control would be improved and that it was carelessness, rather than deliberate cheating, that was the reason. Because RiR was in charge of auditing other authorities’ expenditures on representation, this was considered especially grave.

In a news broadcast two weeks later (Aktuellt, 22 April, 2004), new issues with book-keeping were reported. It started:

RiR let money for development assistance in the third world finance an exclusive internal language course, Aktuellt reveals tonight. Not until Aktuellt has audited the matter, RiR has returned the money to SIDA.

In the broadcast, it was explained that RiR had let a former manager, who had been made redundant after the merger, take a language course in Portuguese in Portugal. This education had cost more than SEK 80 000. The broadcast continued:

But, the expense was not entered under the account changeover costs, as it should have been, but instead it was hidden in the book-keeping, under an account for international operations. Furthermore, Aktuellt’s audit reveals, a bill for the full amount was sent to the development assistance organization SIDA. Aid money thus paid for the employee’s language education. Monday, RiR decided to refund the full amount to SIDA, 80 976 SEK. But when Aktuellt today interviewed Auditor-General Matthew, he claimed not to know anything about it.

Following the disclosure by the media, the 3AG were interrogated in Parliament on April 27, 2004. They admitted that there had been lacking routines for control and book-keeping, and ensured that these would be improved immediately. (Svenska Dagbladet, April 27, 2004.) Personnel described how they were embarrassed to visit authorities after this negative publicity, and claimed that RiR had lost a great deal of its credibility, especially concerning audits on representation. Many auditors now felt ashamed to work at RiR. At the same time, many of them experienced that media’s criticism was correct (see e.g. employee attitude survey May 2004) and an auditor (Carrie, 16 October, 2003) described the feeling as “a bit like -Yes! Let them have it!”. According to her, many auditors shared this feeling towards the 3AG.

In document Personnel Resistance in Public Professional Service Mergers: The Merging of Two National Audit Organizations Bringselius, Louise (Page 119-123)