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The Born Free Foundation, led by Shabana Rehman, has squandered public funds for spa stays, Apple products and travel, researchers say. The control must be adjusted.
This is a comment. It is the attitude of the writer that is expressed.
This week it became known that the Born Free Foundation, which since 2017 has received more than 15 million in state support, is said to have used funds against the purpose.
It is the audit firm Ernst & Young (EY) that has carried out an investigation of the Født Fri foundation which concludes that the funds have been used against the purpose. The investigation was carried out on behalf of the Directorate for Integration and Diversity (Imdi).
You can find the link to the EY report here.
The abuse consists of expensive trips abroad, spa visits, restaurant bills, and large sums of money for cell phones and more. The investigation report states that this is private. In addition, close relatives of the management must have worked summer jobs at the foundation.
Also read: Shabana Rehman says the report is full of errors
Imdi believes this is such a serious abuse that state aid has been stopped with immediate effect. In the investigation report, Imdi is advised to report the conditions that have been disclosed to the police.
Unowned foundations very vulnerable to abuse
Born Free is organized as a foundation. One factor that makes foundations more vulnerable to abuse is that there are no owners to care for. Foundations have no owner.
Therefore, there is basically no one near the foundation who has a financial interest in taking over the use of the money.
Those who need to be cared for according to the purpose of the foundation are usually far from the foundation, with no opportunity to verify that things are going well.
Apartment makes thief is called. In a foundation, it will be tempting for management and board to stock up on cash when control is weak. Stocking up can mean everything from too high a salary and benefits for work done to outright embezzlement. Such actions will cover an axis from the reprehensible to the criminal.
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This problem will not only apply to foundations, but also to voluntary organizations in general. Also for organizations that are organized as member organizations, in practice there will be no controlling ownership, although in principle it is the members who have that power.
One of several scandals
The Born Free Foundation scandal is far from the only one in which the management of a foundation or organization is accused of providing the funds.
Another current case is how the former peace broker Terje Rød Larsen is accused of having used funds allocated to the group of experts he leads: International Institute of Peace.
It is Dagens Næringsliv who through a series of articles over the past year has discovered conditions regarding the use of money there. This is now being investigated by the Office of the Auditor General.
Former peace broker Terje Rød Larsen has a bad time spending money on the International Peace Institute, which he runs.
Photo: Heiko Junge (NTB)
Even in a large organization like the UN, control over money spending can be weak. As is well known, former SV leader Erik Solheim had to resign as director of the United Nations Environment Program (UNEP) in 2018 for having spent large sums of money on trips of a partially private nature.
Here you can read more posts from Kjell-Magne Rystad.
There have also been major scandals with more embezzlement at more private foundations.
The foundation Lise and Arnfinn Hejes Foundation went bankrupt in 2016. The foundation, which originally had a capital of several hundred million crowns, went bankrupt after irresponsible investments and alleged irregularities.
This scandal was also revealed through various posts on Dagens Næringsliv (behind the paywall).
The auditor must have slept for hours
Foundations must present accounts that must be audited by an auditor. However, when scandals are discovered, it is rare for an auditor to discover them.
The same goes for the recent scandal at the Born Free foundation.
The auditor has not disclosed any of the issues that have arisen. In contrast, the state-certified public accountant Frode Ludviksen of the auditing firm BDO has issued a completely pure audit report for the financial year 2019.
Extracts from the audit report The BDO auditor has presented the 2019 accounts to the board of Født Fri.
In the auditor’s opinion, the accounts on Born Free should be in their most beautiful order.
In addition to spending money of a private nature, contrary to the purpose of the foundation, the auditor has also failed to disclose that the accountant of the foundation is a related party and, consequently, may have an interest in covering matters worthy of criticism.
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Has Stiftelsestilsynet done its job?
The review is clearly not enough. To improve control of foundations, Norway has had a public inspection of foundations since 2005. The website of the Lottery and Foundation Authority states:
“The Foundations Inspectorate was created on January 1, 2005 and took over the responsibility previously held by the county governor for foundations. According to the Foundations Act, the Foundations Inspectorate is responsible for the supervision and control of all foundations in Norway. “
Nor does the Norwegian Lottery and Foundations Authority appear to have discovered anything reprehensible about the Born Free Foundation. Rather, it was a warning that prompted Imdi to launch the investigation, which has now revealed the conditions worthy of criticism.
Has Stiftelsestilsynet done its job well enough?
It is necessary to improve control
The numerous scandals show that the control of public funds that go to volunteering, whether volunteering is organized in foundations or not, is not good enough.
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On paper, the control regime looks good. The foundations will have a board with responsibility for controlling the administration. The accounts must be audited and approved by an independent auditor.
Furthermore, the Norwegian Lottery and Foundation Authority controls the foundations. Does foundation oversight have good enough control? It does not seem.
So we see that it fails in several stages. Those who must perform the control tasks don’t seem to do their job well enough either.
It is worrying.
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