Statutory Auditors Highlight Significant Irregularities in Danish Government Accounts

The Statutory Auditors (Statsrevisorerne) have identified substantial irregularities in the financial statements from three specific ministries, leading to the state’s auditor, the National Audit Office (Rigsrevisionen), issuing a reservation on their portion of the total state accounts for 2023. The ministries in question are the Ministry of Business (Erhvervsministeriet), the Ministry of Social Affairs, Housing, and Elderly (Social-, Bolig- og Ældreministeriet), and the Ministry of Justice (Justitsministeriet).

In a statement from the Statutory Auditors, there is expressed dissatisfaction with the situation: “The Statutory Auditors find it unsatisfactory that the National Audit Office has had to issue reservations regarding the accounts.”

A review has revealed that the Ministry of Business has budgeted 1.1 billion Danish kroner (approximately 162 million USD) more than necessary related to the phasing out of oil and gas activities in the North Sea. Additionally, the Ministry of Social Affairs, Housing, and Elderly has underestimated its receivables in the housing sector by 138 million kroner, which positively affects the state’s surplus by 550 million kroner more than reported. Furthermore, the Ministry of Justice has recorded income from fines worth 587 million kroner in the incorrect accounting year.

While the accounts of other ministries are free from significant errors, the National Audit Office has also highlighted concerns in two additional ministries. In the Ministry of Taxation’s (Skatteministeriet) overview of debt from citizens and businesses, there is considerable uncertainty, mainly because some debtors lack the ability to pay. Additionally, there is uncertainty within the Ministry of Food, Agriculture, and Fisheries (Ministeriet for Fødevarer, Landbrug og Fiskeri) concerning provisions related to compensation for mink breeders due to industry-related issues.

Reports also indicate issues in the Ministry of Defence’s (Forsvarsministeriet) financial management, which has been found to be weak. Moreover, four ministries are facing deficiencies in IT-security for critical business systems, further complicating the situation.

Although this year shows some improvements, the audit demonstrates that there are still areas where the ministries’ accounting practices can be enhanced. These improvements are essential to ensure that the state accounts can be more accurate and reliable in the future.