Contingent Liabilities in Norwegian Local Government Accounting Redress Programs Relating to Institutional Child Abuse telemarksforsking.no Telemarksforsking
What is Redress Programs Relating to Institutional Child Abuse? Equitable or constructive obligations Compensation to those individuals who have suffered from institutional child abuse Both symbolic and financial compensation Single payments usually from 100-750.000 NOK Formål formulert etter Stavangermodellen: Deltakerkommunene ønsker med denne oppreisningsordningen å ta et moralsk ansvar for, og gi en uforbeholden unnskyldning til, personer som har vært utsatt for overgrep eller omsorgssvikt i institusjon eller fosterhjem under plassering av deltakerkommunenes barnevern i perioden før 01.01.1993. telemarksforsking.no Telemarksforsking 2
Municipalities with Redress Program 204 municipalities and counties established or enacted to establish Redress Program About half of them have not yet made payments In total local government had paid 1,3 billion NOK by December 31, 2009. telemarksforsking.no Telemarksforsking 3
Relevant today. Relevant tomorrow? Kommune må stenge biblioteket etter millionerstatning til barnehjemsofre www.tv2.no/nyheter/innenriks Publised 23.10.2011 22.15 Gamvik kommune brukte seks millioner av et samlet årsbudsjett på hundre, på erstatning til barnehjemsofre. Nå må de stenge barnehager, svømmebasseng, bibliotek og SFO. 52 barnevernsbarn utsatt for massive overgrep Kommunal rapport 8. desember 2011 Fra år 2000 og fram til i dag har 52 barnevernsbarn blitt utsatt for massive overgrep mens de skulle ha fått en trygg oppvekst under barnevernets beskyttelse, viser kartlegging. telemarksforsking.no Telemarksforsking 4
Hypothesis and Methods Hypothesis Diverse accounting practice contingent liabilities Method web-based survey including all municipalities who have this kind of compensation program (204 in total). Response rate: 83,8% (85,8 %) Yes/no questions supplemented with comment field telemarksforsking.no Telemarksforsking 5
Findings Accounting practices? Each compensation is accounted separately 46,8% Accounted as a contingent liability 6,5% Other, explain: 45,4% -Not decided yet -Invoice date telemarksforsking.no Telemarksforsking 6
Findings When is the redress program recorded in the accounting records? When the council enact to establish redress program Already Not yet Total paid paid 13,1% 12,5% 13,4% When application is received 6,0% 5,0% 5,5% When financial award decided 23,8% 30,0% 25,2% The appeal period closed 4,8% 5,0% 4,7% Payment 57,1% 12,5% 42,5% Other, explain: 15,5% 40,0% 23,6% Total 84 40 127 telemarksforsking.no Telemarksforsking 7
Findings What is the basis of accounting? Respondents Percent Interpretation of the accounting principle 48 60,0 anordningsprinsippet KRS 7(F) Provisions, contingent liabilities and contingent assets 8 10,0 Memo from GKRS; guidance to accrual accounting in local 6 7,5 government accounting (utgiftsnotat) Recommendation from the auditor 13 16,2 Instructions. From whom? 5 6,2 Other, explain: 11 13,8 Total 80 100,0 telemarksforsking.no Telemarksforsking 8
Discussion and conclusions Accounting practice today Modified Cash Basis of Accounting Payment or invoice day Limited accrual accounting Conservative practice? GKRS (Standard Board) Fails to guide the municipalities? Towards less accrual accounting? telemarksforsking.no Telemarksforsking 9
Further research? Document analysis of some of the municipalities in question? Interviews of key personnel in the municipalities? Map out accounting practices in general? Compare with other countries? Identify further the foundation and motivation for the accounting practice? Will local governments in a weak financial condition be more likely to withhold bad news, than local governments in a better financial condition? Other research questions? telemarksforsking.no Telemarksforsking 10
Thank you for your attention! Ailin Aastvedt Telemarksforsking aastvedt@tmforsk.no 957 06 121 Presentasjonen kan lastes ned fra www.telemarksforsking.no under publiseringer telemarksforsking.no Telemarksforsking