Accountancy firm KPMG has published two reports about technical errors which took place at Norsk Tipping, one of Norway’s two state owned lottery firms, earlier this year.
The company has recommended some serious changes to Norsk Tipping’s risk management, organisation, leadership standards, and how it manages relationships with third party suppliers.
This stems from incidents earlier this year which led to regulatory penalties issued to Norsk Tipping by Lottstift, Norway’s Lotteries and Foundation Authority. The firm was charged NOK 25m (€2.1m) for errors around a Super Draw in April and NOK 10m (€851,443) for ones around a Eurojackpot draw in June.
In both cases, ticket holders were mistakenly informed that they had won when they hadn’t, or that they had won far more than they actually had – in some cases ticketholders were told they had won life changing multi-million sums. Norsk Tipping subsequently commissioned a KPMG report into its business.
Sylvia Brustad, Chairwoman of Norsk Tipping, said: “We are well underway in following up on most of the measures recommended by KPMG.”
She added: “The shortcomings are numerous and serious, and the board will be an active party in the work to implement the measures KPMG has recommended. Many of them we are already working on, since PWC pointed out many of the same weaknesses.”
KPMG recommends sweeping changes
The London-based accountancy firm, one of the Big Four auditing agencies, has made several recommendations across two reports for how Norsk Tipping’s organisational model, culture, and the way it develops and tests products, can be improved.
This comes just a couple of months after the PwC report into Norsk Tipping’s business referenced by Brustad was published, delving into similar issues. PwC found that Norsk Tipping was focusing too much on innovation and not enough on quality control.
In its two reports, KPMG has followed this up with recommendations for a new system for supplier management including stricter requirements. It has also argued for new mandatory guidelines around development, testing and operation of the firm’s products, topped up with mechanisms to ensure compliance with these standards.
There are also recommendations around senior management and leadership – clearer requirements and expectations for leadership roles, and a general strengthening of senior management.
Vegar Strand, CEO of Norsk Tipping, said: “There is no doubt that the report hits us hard as a company. We are now working purposefully to put the problems behind us, and we are on the right track.
“Of the 25 measures that KPMG has proposed, we are currently implementing 22. It will be demanding for the entire organization, but it is absolutely necessary to strengthen quality and rebuild trust.
“We have not waited for the final report to initiate measures, and no one here is in doubt that the work has the highest priority. We must have high quality and avoid mistakes to earn the trust of our customers. We are well underway with the job, but we still have a lot to do.”